This Report focuses, on an important 'Topic of Interest' to most in the Aviation Industry.
Where and how 'Customer Related Management' is used within Industries will be the main area of discussion.
The Industry that will be focused upon is the 'Aviation'Industry' with particular reference to Competing UK Airlines, British Airways, and Virgin.
In Discussing the Implementation of CRM Within the Aviation Industry, the following areas will be analysed and reviewed;
- 'Customer Related Management' in the Aviation industries
- The Impact of Leadership in Aviation Industry
- How both areas function within an organisation
- How leadership roles play a part in 'Customer Related Management'
An Integral area of Review will be the Importance of 'Customer Related Management 'within Aviation Industries, and how new approaches in CRM are adopted regularly as the Aviation Industry continuously changes as society evolves.Areas of Review will be:
- Customer Related Management Strategies
- Existing Leadership Strategies
- The Emergence of CRM into Leadership
- The 21st Century paradigm 'Customer Related Leadership'
- The Importance of fundamental Innovation in the area of Management
At the end of this review, possible future directions for the initial industry will be discussed. These will include;
- Future Investments In new management techniques
- Improvements within Aviation hierarchical structure and the overall basis of why is it that Organisation must always use Research and Development methods when innovating on original Strategies
- Finally the new concept of 'Customer Related Leadership'
This report shall be focused on the integration of CRM into Leadership strategies. Specifically discussed will be the benefits of applying the CRM theories and practices into Leadership Techniques within the Aviation Industry, and the success factors achieved by doing so.
Through the use of Relevant Models, and Up to date Statistical data, The Examined evidence will argue that CRM is an innovatively changing Framework which is continuously being implemented into 21st century Processes within Firms'.
Adapting Leadership methods into areas of Customer Management and Hierarchical characteristics is the new paradigm.
These areas are known to strengthen investment within the aviation industry, by focusing on an organisations internal structure, improving use of feedback from customers, providing effective management in the organisations hierarchy, and delegating correct responsibility.
Explanation of 'Customer Related Management'History
'Customer Related Management' Known as CRM is used to gather information about customer needs and behaviours, in order to establish a good relationship between collectors of the information and the customers themselves.
The concept of CRM became apparent from the 1980's onwards, it was the practice of setting up all of the customer's data, and managing it in a way that became more accessible and efficient for the companies. Customer Relationship Management (CRM) interacted with its customers though a variety of different ways by tracking information that was presented by the customers, and allowing companies to use the information as required for the benefit of the customers.
Although CRM was a new founded concept, it still had areas that need to grow, and be updated, and this was mainly down to technology in society growing faster and wider. By the 1990's CRM concepts had been globalised, and become part of a new world order where 'database marketing' was essential for growing successful organisation.
The vastly improved capabilities of CRM provided major benefits for organisations and thus through this 'Customers, Clients, Consumers'were now held as being the most valued element for an Organisations success. If the customers were happy, then business would essentially grow, through reputational methods.
Having a good customer relationship enables business success, and the technological component for this is to think of CRM as a strategic process that allows an Organisation to understand its customers' needs and to develop and enhance on the feedback given by the customers. This strategy however does depend on the input and collection of information relating to the customers and market trends so that products and services can operate in a more efficient manner.
The insight into CRM is to help businesses use technology and the resources by having an effective CRM strategy that enables revenue increase through the following manner;
- Providing the right products and services for customers
- Better customer service
- Retention of Existing customers and creation of new ones
- Databases or Important Information which can be used as feedback
After Studying the History of CRM , and how it developed, The importance of Customer Relationship Management, and whether it is key area in any business, can only be sought by addressing the following key inhibitors, when making CRM Tools correctly;
- Culture -companies that are alerted by culture changes Make consideration for their customers, by making the customers a priority to never feel frustrated, mistreated, and to minimise a negative experience for the customer.
- Economic - CRM requires investment spending. Investment can now allow increased Productivity to become an advantage over competitors in the near future, by the increase of market share, and increased percentage of Recognition within a niche.
- Linguistic - It is essential for employees to understand the jargon and acronyms thrown towards them by managers who are unwilling to define or explain new terminology into plain English.
Here are a selection of ways of Presenting the Importance of the Implementation and establishment of Customer Relationship Management' within Organisation, in the 21st century,
- To respect the customers
- Ethical neutrality promoting the best products
- Using media forcefully and understanding medium is the key message
- Difference between bribery and loyalty
- Be aware of marketing "scientism, "so called market research
- Critical client on all CRM products and services
- Privacy advocate
- Let go of intrusive and obnoxious ways of contacting consumers
- That brand in 21st century is stress reduction for consumers
- Technology controls us, we don't control it
The following are viewed as beneficial factors when using CRM;
- The development of better relations with your existing customers
- Increased sales revenue
- Identifying the needs and requirements of the individual customers
- Cross selling of other products which means the selection of alternative or enhancements
- To identify the key customers i.e. profitable and non profitable
A better marketing of products or services by effective methods of communication to market products or services to customer implement real-time approach of the development of new and improved products and services.
Penultimately this would lead to;
- Satisfied customers
- Increased status of existing customers which will reduce the costs associated with them
- Improved profitability from profitable customers
The benefits available for using CRM for convenience in firms, and collecting data, also the collection of feedback in general is quite vast. Regularly new concepts and software are presented and promoted, and 'database management' is an up a coming field in 21st century 'World of Business'.
One Industry that requires new and upgraded versions of 'Customer related Management' is the aviation industry. CRM is frequently used, and the need for development in this area is always welcomed.
'Customer Related Management' approaches that Airlines Use Within the Aviation industry
The overall strategic business objective of CRM is to build loyal customer Relationships, where companies can anticipate their customers' needs and use
Information to personalize relationships, providing customers with confidence
And trust in their dealings with the organization. The benefits of implementing effective customer relationship management practices and solutions are dramatic. CRM initiatives can result in reduced costs and increased profits.
Comparing two Airlines within the Industry allows for a better understanding of CRM, and how it works in the Aviation industry. The two Airline that will be examined from a CRM strategic approach are British Airways and Virgin.
When examining the CRM tools used in British Airways, It is important to know which tool is favoured. British Airways uses a new CRM solution called 'Teradata'. This new approach helped BA improve analysis and implementation of marketing campaigns. The new system worked by replacing an existing system, called the 'Chordiant' solution, in order to compete against its rivals. British Airways strengthen its customer relationships based on a complete, integrated and shared understanding of all interactions.
The award of the contract given to Teradata was carried out on the full evaluation and the prospect of the high ROI (Return on Investment) that they would achieve with the implementation of the system. Consolidating its current data-mart onto a single enterprise wide platform on which the program will perform on, British Airways will use the Campaign Management solution to analyze, understand, and then drive personalized, relevant and timely communication to Executive Club members through e-mail and direct mail.
The second Airline to be examined is Virgin Airlines formed in 1984, Owned by the Successful Entrepreneur Sir Richard Branson. Virgin Airlines success is down to the Variety of approaches it applies, and constantly innovates. Virgin Airlines commissions quarterly customer satisfaction studies that are conducted by the prominent market research organisation NOP.
Results of the surveys are fed back to managers globally, providing the airline with the valuable opportunity to review and improve its services wherever it can.
The extensive customer database used at Virgin, holds a wide range of information including details provided by customers who register their interest in Virgin Atlantic when visiting its' web site. As well as being used to run precisely targeted campaigns and promotions, the database is also used to produce management reports on the behaviour of the customers and to track the mileage of the airlines frequent flyers.
CFM is Customer flow management and is a type of customer related management techniques used in Virgin Atlantic airlines. It allows Virgin to manage the flow of their customers and how they have experience their flight, and services, amongst other areas of Virgin services. Employees take the feedback from customers and provide solutions to the areas of interest.The five key areas CFM covers are:
- Pre-Arrival Activities
- Arrival and Queue Entry
- Queuing Linear and Virtual
- Service Delivery
- After Service
The development of this new technique allows Virgins 'sales, productivity to increase' as well as reduces the cost by ensuring that customer queries and complaints are dealt with. It is data that helps improve business processes as well as raising customer service standards. All things considered the idiom of "If you look everywhere to find something, or try everything to achieve something, you leave no stone unturned", can be articulated for this area.Importance of 'Customer Related Management' Within the Aviation Industry
CRM (UK) Ltd , describe CRM As a "Customer Relationship Management that is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between consumers and organizations". CRM is the maintaining of long-term customer relationships. The relationship delivers value to customers, and profits to companies. CRM from a business strategy approach is based upon the recruitment, retention and extension of products, services, solutions or experiences to customers.
Customer related management is a strategic necessity if airlines want to obtain and retain loyal travellers. In the aviation industry CRM is looked upon to be essentially the one of the frameworks for "Managing Customer Expectations". Areas that fall into Customer related Management are Customer Loyalty, Customer Satisfaction and Customer Relationships.
Nicholls, Gilbert & Roslow, [1998, pp239-253] describe "Customer satisfaction as a key aspect in organizational survival and may thus represent the lifeblood of any organization". Building the relationships between customer satisfaction and leadership has been known to increase leadership, and has come to be known to develop into "the service profit chain" technique.
Carpenter & Lehman, [1985 pp ] define Customer loyalty as "a deeply held commitment to re-buy or re-patronize a preferred product or service consistently in the future despite situational influences and marketing efforts having the potential to cause switching behaviour"
In this highly competitive industry, while operational efficiency helps reduce costs, customer satisfaction is the key to market leadership and sustained profitability in the long term. Airlines have now begin to realise how important customer relationship is and focusing on the Customer Relationship Management (CRM).
Airlines have to change the way they manage their CRM by doing the following;
- Customer segmentation - mileage based is not appropriate and should think more in the areas of value and needs which will help guide investment decisions.
- CRM initiative development - differentiate from competition and abandon "fast follower" approach and investing in initiatives with high returns that favour needs and desires of their customers.
- Organizational design and management - having a service mentality in their employees and manage the complete view of the customers so that they can articulate themselves in the role of CRM strategy.
Key elements for implementing a successful CRM initiative;
- CRM Value Case for Change - helps develop a business case that expands multiple customer touch points.
- CRM Value Proposition - in-depth strategies around the initiative by using analysis proven tools.
- CRM Operating Model - operational end state blueprint of the CRM structure.
- Multi-Generation Roadmap - prioritised blueprints so that the airline can handle and manage successfully.
- Sponsorship, Change Management and Governance - It seeks to build support for CRM initiatives to ensure that projects and transformations are measured and directed towards their goals.
A Customer Related Management (CRM) system has the ability to create competitive advantages: by creating value for the customers, reducing costs associated with customer processes and creating time advantages.
In order to achieve these Profits a company needs to invest in a CRM solution that provides a relevant, easy to use system, a rapid implementation life cycle and the ability to adapt to ongoing change. The understanding of the benefits and measurement of these results over time allows a corporation to formulate a plan for implementing a successful, long-term CRM strategy.
Do Enhancements of 'Customer Related Management' Tools maximise Profits in the Aviation Industry?
Following on from 'The importance of Customer Related Management' in the Aviation Industry, the next area of examination is whether the implementation of new tools the aviation industry increases profit.
There are many strategies implemented within CRM, and Success depends on a customer-focused strategy that is implemented by often re-engineering current customer interaction processes and sometimes designing entirely new processes.
The keys to profit enhancement however are processes that maximize the opportunity for increasing customer-generated cash flows at every customer contact. This is done by invoking decision rules that recommend specific customer treatments at each contact. Customer segmentation and customer value scorecards (CVS) are discussed as key tools in understanding customers and identifying opportunities for increasing customer-generated cash flows.
An example that discusses how the introduction of a CVS in a company resulted in the company embracing CRM is also presented. CRM does require managing customer interactions, but more importantly, to be successful, it requires senior executives to be involved in creating the environment, culture and processes that will help it succeed. Organizational readiness, careful planning, the deployment of the right analytic tools and technology, as well as flawless execution are all needed for CRM to provide significant bottom-line results.
Focusing on British Airways and Virgin Airlines, it is apparent that the CRM Strategies adopted by these Airlines are a form of enhancing productivity, thereby increasing sales and the amount of profit that is made, careful analysis and tools, as mentioned above, had been researched then applied in order to provide the best method of CRM.
This clearly provides sufficient evidence that these Key tools work best, when examining 'enhancements of profits' within the aviation industry.
Leadership can be defined as the process of understanding situations, the ability to influence others towards goals as individuals and as a group, the ability to rationalise and emotionalise considerations when attempting to influence others, and the ability to take responsibility and delegate it effectively throughout the workforce. A leader has to be successful for the purpose of their self and to show others to have the ability to doing the same thing.
Leadership is a multi-purpose position that is present in all organisations, leadership is related to high motivation, with reference to some motivational scientific theories and the stages in motivation; (Hertzberg, Maslow, Taylor, and McGregor) this indicates that employees have different motivational factors and interpersonal behaviour at work.
Leaders help in the effective process of delegation of responsibilities. This is the process of employees knowing their duties in an organisation. When a leader successfully carries out these processes, a leader-follower relationship is built; this helps to influence both individual and organisational performance, because the feeling of being important in an organisation promotes work satisfaction, according to Herzberg's "Hygiene" and Maintenances" factors which is needed in the work environment.
Buchanan, D., Huczynski, A [2004, pp 692-730], argue "a leader is someone who exercises influence over other people". P.F Drucker, (1986), former management consultant and professor at New York University holds that "leadership is the lifting of people's vision to a higher sight, the raising of their performance to a higher standard, the building of their personality beyond its normal limitations".
Peters and Austin, [1985, pp111] believes that a leader is 'cheerleader, enthusiast, nurturer of champions, hero finder, wanderer, dramatist, coach, facilitator and builder'. Despite different opinions on the concept of leadership, there is a unique three key correlation with most study of leadership. According to James McGregor Burns [1978 pp ], he established the three key factors as; "purpose, followers and interaction", these are the foundation to a positive organisation and there is a leader that holds this together.Different Approaches of an Effective 'Leader'
There are several frameworks of analysing different leadership approaches.
These frameworks are as follows:Qualities or Traits Approach
This approach assumes that leaders are born and not made. It identifies leadership characteristics as inherited or personality traits, which differentiates leaders from followers. According to Great Person theory of leadership, Mullins, [2002, p264] argues that the "quality approach" focuses attention "on the person in the job, and not the job itself, it suggests that attention is given to the selection of leaders and not the training process of leadership" For example, Drucker.P [1955, pp70-72] states that; "Leadership is of utmost importance. Indeed there is no substitute for it. But leadership cannot be created or promoted. It cannot be taught or learned."
The above example states that, leadership traits and characteristics has undergone through many research studies, which indicates that there has been little success in identifying common personalities and characteristics. Also further investigation collected states that there is overlapping and little correlation with the leadership traits' features.
The most common leadership traits: 'individuality' or 'originality' is a constant feature in the leadership list of traits. However, this was tested and found little in common with leader's specific personality traits. Anyone in any field would be able to mention the characteristics of leadership abilities as; self - confidence, initiative, intelligence and belief in one's actions, but research into this area has revealed little more than the mentioned features.
Behavioural / Style Approach, this approach addresses on the kind of behaviour of leaders in situations. There were two projects that investigate on behavioural approach; the Michigan study (1940) and the Ohio State study (1950). The Michigan study identified two dimensions of leadership behaviour;
Employee-centred behaviour; this focuses on the relationship between a leader and his/her subordinate and their needs.
Job-centred behaviour; this explains the behaviour that get the job done efficiently
The Michigan study worked alongside with the influential studies of Edwin Fleishman and Ralf Stogdill at the Bureau of Business Research at Ohio State University (Fleishman, 1953a 1953b; Fleishman and Harris, 1962; Stogdill, 1948; 1950; Stogdill and Coons, 1951).
The Ohio state study research brings to light the argument that a considerate, participative, democratic and involving leadership style is more effective than an impersonal, autocratic and directive style. One of the extensive research studies on leadership style is the Ohio State Leadership study (1950) carried out by the Bureau of Business Research at Ohio State University. It addresses the effects of leadership styles on group performances.
The method of research was; questionnaires - it was designed to give a list of descriptive items, each dealing with a precise aspect of leadership behaviour. The questionnaire was well known for its in formativeness and was used repeatedly. It was used by different organisations in situations like; leader-group member situation. After the analyses of the questionnaire, the Ohio Study reveals the two major dimensions of leadership behaviour; 'Consideration' and 'initiating structure'
Consideration: Is a pattern of leadership behaviour that demonstrates sensitivity to relationships (trust, mutual respect and rapport) and to the social needs (support) of employees.
Structure: Is a pattern of leadership behaviour that emphasizes performance of the work in hand and the achievement of the product and service - goals.
Consideration and initiating structure dimensions are independent of each other, but they can be seen as the same as maintenance function (building and maintaining the group as a working unit and relationships among group members) and task function (accomplishment of specific tasks of the groups and achievement of goals) [Mullins 2002 pp264]
Successful Approaches of 'Leadership'
In the Business World
Cameron. S. [2007, pp 392-394] states "Success depends on the following factors";
- Clarity of goals& acceptance among team members
- Agreement over ways of working towards these goals
- Effective communication between team members
- Support and Co-operation rather than competition
- Arrangements for monitoring progress, & taking corrective action if necessary
Leadership as a behavioural aspect has drawn attention to the importance of leadership styles. In present organisations, leaders cannot exercise their power to get the best result from their subordinate; instead leaders will have to encourage high morale, a spirit of involvement and co-operation at work. This introduces the styles in leadership, and analyses in leadership behaviour.
Mullins, [2002, pp264-266] "Leadership style is the way in which the functions of leadership are carried out, the way in which the manager typically behaves towards members of the group" There are various ways of classifying leadership styles; dictionary, unitary, charismatic etc. However, the style of managerial leadership towards employees and the focus of their power can be classified into three kinds.
The first style is the Autocratic / authoritarian style; this style describes the position of the leader as supreme, the leader makes the decision. The second is the democratic style; the focus of the power is in the group, as they all interact with one another. The group members have a great say in the decision making. The Third is the laissez -fair / genuine style; this is where the manager observes that the groups are working well on their own, and passes the authority of decision making to the group members.
Hooper and Potter, explains that the importance of leadership in time of change and uncertainty. The ideal behind this is employees' biggest fear is change and fear of the unknown, when a new leader is brought to an organisation or when a new system is adopted. Hence, an effective leader is the key to changing employees' perceptions from seeing change as a threat to seeing it as an exciting challenge.'Leadership' Strategies used within The Aviation Industry
Within the Aviation industries there are several types of leadership initiatives undertaken by various airlines. BA is generally seen as a bureaucratic organisation which possesses a standard leadership style and structure.
On other hand Virgin is characterised by its charismatic leader Sir Richard Branson who is seen as something as a maverick, whose style is seen to be endless creativities.
Leadership strategies within these two airlines are examined as follows; British Airway Regularly Invest in the following areas of Leadership
- New leadership training;
- Implementing clear communication programmes, they are quite mainstream in their standards
- Improving the way we manage performance in all areas of our business
Through training and systems solutions;
- Re-enforcing the new organisation structure with clear accountabilities
Linked to our overall Company goals; and
- Innovating and improving our ways of working, using e-tools
They regularly improve their operational performance, and they measure performance across the business by making their managers Accountable for delivery of targets
The Virgin Group, known for record labels, cellular phones, airlines, and many other business ventures is led by Sir Richard Branson, a leader who is known for his unique character and leadership styles, one who is not afraid to take risks, and believes that people are the foundation to his company's success, his leadership style can be said to be a democratic leader. Richard Branson at Virgin emphasised the importance of peoples input and listening to what people have to say. He believes that the "Virgin Group is an organization driven on informality and information, one that is bottom heavy rather then strangled by top level management"
At Virgin Atlantic Airlines synergies are created from hierarchical relationships and the interaction of the corporate head office with individual business units adds to the quality of individual leadership matters.
In conclusion, both Customers related management and Leadership are majorly important areas in the internal frame working for any organisation within the Aviation industry.
Customer related management is crucial in today's airline business as a result of globalisation, increased competition and rivals, market saturation and now the rapid advances in technology. Utilizing 'Customer related management' systems and approaches , businesses have been able to improve vastly in better decision making, enhanced customer relations , quality of services, and most importantly the underpinning of the customer orientated management concept , of identification ,satisfaction of customers that lead to improve customer retention , which is based on corporate profitability.
Leadership is equally crucial in today's airline business, because organizations and society at large are constantly changing. Because of these changes, approaches and methods are constantly being adapted innovated and implemented. Over time, 'Leadership' capabilities shape team's qualities and the capabilities of organisations as a whole. A strong leader has the ability to shape the future directions of his organisation, by constantly seeking improved and innovative management techniques of which Customer Related Management is at the forefront in today's globalised economy.
As a final point in this report, there are many key areas in any successful businesses, no one particular area is less important than the other. In Regards to the Aviation industry the two key areas that are regarded when it comes to Profitability are CRM and leadership. Enhancements and re-development of these areas provides a more sustainable profit allowing for expansion, growth and a variety of future investment.
The Discoveries made in the area of CRM and Leadership is the Evolution of CRL from the Overall, by merging Two Important areas of an Organisation, which is the integration of CRM and Leadership, continuous Improvement, Innovation can only developed these areas of success to strengthen them further.
The integration of CRM and Leadership, a new Paradigm for the 21st Century, can only be the beginning to stronger, enhanced developed internal frame working for organisations in this forthcoming business world.
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