WELCOME TO CLUB 2000: DELIVERING CUSTOMER CARE THE AIR FRANCE-KLM WAY
PROBLEM:
Dr. Jaeger is not just any Air France traveler – he is a privileged member of the airline’s most elite loyalty program: Club 2000. By virtue of this membership, he is to expect the utmost in superior service quality standards from Air France. But after a horrible experience with the airline that left him “standing in the rain,” literally, he is not only incensed from his travels gone awry, but even more from the inferior service encounters he faces after the fact. After several months of frustrating, useless attempts to secure compensation for his lost luggage, and after having been ignored and given the “run-around” by many Air France service employees, Dr. Jaeger is obviously no longer an Air France customer. Yet the question remains: Who is responsible, and what should be done?
ISSUES / ANALYSIS:
Based on the Inséad case study, the following are some of the problem areas which are contaminating the Air France-KLM customers’ vision of “best service” and which need to be addressed:
1) Leadership: A company’s philosophy is undoubtedly shaped by its leaders. Sincere leaders who lead with integrity truly inspire employees to do the same. Thus, in order for a leader to come across as genuine or “authentic,” that leader needs to lead his/her organization with purpose, meaning and personal values which are not only communicated verbally, but also communicated through the leader’s own actions. The authentic leader needs to “walk the talk.” With this value-driven leadership also comes the ability to build enduring relationships with people – first, with his/her own employees and, secondly, with his/her customers. Unfortunately, Jean-Cyril Spinetta’s (CEO, Air France) behavior in the case study is not an exemplary model of leadership. If Spinetta will not respect and respond to his best customers, then why should his employees?
2) Corporate Culture: It is no secret that with regard to Air France’s marketing efforts, service-related issues have historically been underemphasized, most notably those dealing with service quality. In this area, Air France’s endeavors have noticeably lagged behind those of other comparable traditional airlines. What Air France has been slow to realize is that, due to the deregulation of the airline industry in Europe, their battle for competitive advantage can longer be fought on either price (because price moves are too easily copied) nor on “loyalty” based on company legacy, since these levers will no longer be enough to keep customers coming back.
Saha, G. C., & Theingi. (2009). Service quality, satisfaction, and behavioural intentions: A study of low-cost airline carriers in Thailand. Managing Service Quality , 19 (3), 350-372.
Leaders who treat their employees with fairness, honesty, and provide frequent, accurate information are seen as more effective. According to Robbins and Judge (2014), “trust is a primary attribute associated with leadership and followers who trust a leader are confident their rights and interest will not be abused” (p.193). The old General Motor Corporation had eleven different CEO’s from 1923 until 2009 each with their own unique leadership style, which directed employees toward the organization goals. Unfortunately, many of the top level managers under the CEO’s had the tendency of filtering out information that did not match up with their pre-conceived notions about a particular issue and they lacked upward communication. One consumer goal of General Motors was to build trust in the company so people would be repeat customers, but building trust between employees and establishing an ethical culture was not a top priority of the organization. Goal directed leadership alone is important, but differs from a structure of leadership based on ethics. It is important to note, that effective leadership may not be the same as leadership founded on ethical principles. Business competence must exist, along with personal leadership accountability in ethical decisions. Within the General Motors organization, ethics and leadership did not interconnect; there were misalignment between the
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Spirit Airlines has long been considered an unorthodox airline. They, of course, address all four P’s in their marketing strategy; however, they focus a large amount of their effort on price and promotion. They focus on cutting price through “unbundling”. They focus on promotion through taking advantage of social issues and breaking news. Many advertisements and deals promoted by Spirit have given the public a definite shock-factor. Spirit has made two objectives very clear: they are furious at getting the customer the lowest fare possible by any means necessary, and they will similarly use any means necessary to get those potential customers to notice those fares. Such a blatant marketing strategy works. Even going up against some big competition, Spirit finds ways to be competitive and successful in flagrant fashion.
Sociocultural factors embody the various culture aspects in which a business functions. It is of great significance that a firm has the ability to appeal to the culture that they are working within as it reflects their customer knowledge, determining their performance (David & Fahey 2000, pg. 113). One central issue in regards to sociocultural factors playing an important role in a business’ marketing mix is firm’s ability to adapt marketing strategies in regards to demographics. The universal aging population is a clear indicator of marketing strategies for airlines companies to evolve so that it caters to the needs of the population as a whole. In addition, with Qantas operating as a global company and multiculturalism as a universal force, it is crucial to cultivate innovative marketing plans to accommodate the diverse preferences and needs of other cultures (Teo 1994). As cultures differ in their forms of attitudes and behaviours, consumers coming from these diverse cultures, backgrounds and countries are susceptible to dissimilar intensities of service anticipations (Donthu & Yoo 1998).
“Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.” William Pollard’s, a 20th century physicist, words show us the power of being proactive, and igniting change to strengthen a company’s productive climate (Sellers, Boone, Harper, 2011). Acme Airlines flight attendants lacked incentive to improve the quality of their work, as a result of distrustful management and overall frustration within the company. Acme took successful steps to rebuild their FA program into a more relationship oriented work environment. Through an understanding of effective leadership, we will use the
The Southwest Airlines company and its culture is one that is often cited in today 's business classes. The airline is widely known to be “different” compared to many of its competitors, a result of its founding values and strong corporate culture. This culture developed early in Southwest’s history and was deeply entrenched due to the competitiveness of the airline industry, as well as due to some of the pressures experienced as a result regulatory issues and stiff competition.
The emphasis on leaders being not just executives and managers, and that not all executives and managers are leaders, is extremely vital. Anyone can strive to be a leader in whatever organization in which they are involved. Bennis and Nanus claim that leadership is about character, setting the example for how team members treat one other (and in a corporate setting, their clients as well), being truthful and sustaining organizational trust, and encouraging themselves and others to learn. On one hand, it can be easy to see how many people in leadership positions do no match up to these standards of leadership. On the other, it seems a bit like common sense to be truthful to others and to effectively communicate with people who work together everyday. Leaders is an effective tool for summarizing and inspiring leadership not in that it teaches tough strategies and manipulations, but that when looking at an overview of its content, Bennis and Nanus are essentially teaching human relations and human decency. All in all, this book highlights strategies for us all to be better in our lives and our everyday
Phil Carroll, former CEO of U.S. Shell (SOC, the American arm of Royal Dutch Shell) believed in the importance of the servant-leader model of leadership. In the early 1990’s, when this new leadership model was introduced, it shook the foundations of a company that had known success for many years using a more traditional authoritarian model of leadership. He wanted to completely transform the company into an organization that could continue to expand, and make a profit doing so. The company needed to tap into the resource it had (and still does) right under its nose – its employees! Mr. Carroll wanted the culture of the company to be transformed into a model of self-directed leaders who share knowledge amongst each other, creating an environment of continuos improvement. According to the American Management Association “Phil Carroll has led Shell Oil Company toward a significant transformation of its corporate culture. It is comprised of a new vision, a new business model, a new system of governance, a new concept of leadership, and the use of learning...
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When a business aims to be as successful as possible in selling its products and services, it must examine in detail whether or not the products will be attractive and necessary; if the price is optimal; if the product is being distributed in the best locations; and finally, how interest and awareness can be created for the products. In order for a business to target all of these elements to the right people at the right time, it must employ the right type of marketing mix: Product, Price, Place and Promotion. In a dysfunctional time for the airline industry, most airlines, especially major carriers, are adapting the concept of "doing less with more." One low-cost carrier, JetBlue, is changing the domestic aviation landscape in this regard and is defying the odds. Here is a company that has examined each marketing mix elements carefully, has adapted them to its customer’s needs, and is succeeding because of this approach.
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