On-the-Go Customer Experience Management: Insights and Opportunities for Travel Operators
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1 On-the-Go Customer Experience Management: Insights and Opportunities for Travel Operators
2 Executive Summary Customer expectations are changing in every industry and the travel sector is not immune to these challenges. Customers can now reach a company using many different channels, some of them online channels, face-to-face, or via the phone. They are currently able to communicate at any time from mobile devices and have an expectation that service will be provided 24/7. They increasingly want to decide how and when to engage with travel companies, thus increasing the complexity of customer experience management. This call for better services and engagement puts significant pressure on travel operators to become more demanddriven in order to satisfy the needs of customers. Executives understand the importance of having a variety of channels available that customers can use to communicate with their travel service providers; however, they are faced with a range of issues in a constantly changing market, such as tight budgets, technological innovations, and shifting customer sentiment and preferences. This white paper will explore changes in the market today as well as provide information on how a multichannel approach to customer experience management can build brand advocacy and generate new revenues. Research Reveals Weak Areas in Customer Satisfaction Although the global economy continues to improve from the Great Recession, travel and tourism companies remain cautious with their CRM budgets. According to a recent survey on the travel industry, 50% of respondents in this sector indicated that their in-house CRM budgets will stay flat or shrink over the next 18 months. 1 With global tourist arrivals and inbound spending anticipated to continue to be essential through 2017, helped by expanding interest from emerging markets, 2 it s perhaps easy to recognize 1. Ovum, Travel and tourism offers new frontier for CRM outsourcing, May 9, World Travel Market and Euromonitor International, World Travel Market Global Trends Report that improving customer experience is an important initiative to help capture new revenues related to this activity; however, finding solutions that are within budgets for customer service programs is a constant concern. Another issue for many leaders in the travel industry is that they are paralyzed when it comes to organizing and implementing a successful, seamless, and consistent customer experience across all channels for travelers. A review of recent satisfaction studies for the travel industry reveals that there is room for improvement. 2
3 Airlines The American Customer Satisfaction Index (ACSI) reports that although the level of satisfaction with airlines is flat from 2013 to 2014 (see figure 1), a closer look at customer experience benchmarks within the study shows that in-flight services and seat comfort take the biggest hit in terms of customer satisfaction, with 2014 scores of 67 and 63 on a scale of 100, respectively. 3 The ACSI concluded that the flight experience is the most important in terms of customer satisfaction. 3. ACSI, American Customer Satisfaction Index Travel Report Figure 1: Travel Industry Customer Satisfaction Index Scores, Year Comparisons (Source: American Customer Satisfaction Index Travel Report 2014, and ACSI Benchmarks by Industry for Hotels and Airlines) Indexes are reported on a 0 to 100 scale. Hotels Internet Travel Airlines N/A % Change 0% -3% +1% Only 34% of respondents said they would recommend an airline... based on their last contact. 3 Figure 2: Customer Satisfaction toward Specific Areas (Source: Teleperformance Worldwide Multichannel CX Survey 2014, US Airlines) The loyalty / frequent flyer programs Trustworthiness / reliability of the company The clearness and transparency of the information The extensiveness of available destinations In-flight service quality Dissatisfied Passives Satisfied Don t know 17.2% 25.6% 41.1% 16.2% 14.4% 30.2% 52.4% 3.0% 15.7% 31.4% 48.8% 4.2% 14.8% 31.1% 49.5% 4.6% 18.4% 30.0% 49.8% 1.7% Additionally, the Teleperformance Worldwide Multichannel Customer Experience Survey 2014 (CX Survey) for US airlines confirms that customer service is the most relevant attribute driving customer recommendations. In particular, US customers have high expectations for the quality of the in-flight service, and, as figure 2 shows, 48% of survey respondents were either dissatisfied or indifferent with their experience in this area. Further, on average only 34% of respondents said they would recommend an airline to a friend or relative based on their experience during their last contact. 4 Baggage service quality 18.4% 29.9% 45.9% 5.7% The range of prices The changes and cancellation policy 23.1% 34.5% 40.5% 1.9% 22.8% 25.5% 38.0% 13.7% 4. Teleperformance, Teleperformance Worldwide Multichannel Customer Experience Survey 2014, US Airlines.
4 Hotels Rental Cars 44% of respondents would not purchase from the same Internet travel site again. For hotels, according to the ACSI report, the customer experience benchmarks having the most negative effect on satisfaction are related to quality after check-in and reached a consistent score of 77 in 2013, specifically in-room Internet service, amenities, entertainment, and food services. This score dropped to 75 in 2014 (see figure 1). 5 Internet Travel Sites The Internet travel sites segment captured a 1% increase in its overall ACSI score from 2013 to 2014 (see figure 1). Analysis of the customer experience benchmarks for this area shows a need for improvement with customer support (via live chat, help pages, and call center), usefulness of sitegenerated recommendations of other travel services, and travel promotions and package deals. Within the same segment, Teleperformance Multichannel CX Survey research shows some substantial results. An average of only 43% of respondents would recommend an Internet travel site to family or friends based on their last service experience, and 44% would not purchase from the same agency again. 6 This clearly demonstrates a need for these sites to differentiate themselves from competitors. In the rental car segment, good customer service is more important to satisfaction than price. This is according to the J.D. Power 2013 North America Rental Car Satisfaction Study, which analyzed 12,000+ evaluations from people who rented cars from airport locations. Based on a 1,000-point scale, price scored 756 versus a customer service score of 828. Further, expediency during the pick-up process also outranked price as an important element impacting satisfaction. 7 Cruise Lines In its 2013 report measuring customer satisfaction among approximately 3,000 customers for the cruise line segment, J.D. Power found that while customer service, stateroom and food comprise more than 50% of the contribution to overall satisfaction, the number of problems passengers experience during their cruise also has a significant impact on loyalty and advocacy. 8 Based on this market research, it stands to reason that a focus on improving these weak areas can enhance customer experience and therefore produce positive brand advocacy from customers. This support can in turn translate into additional revenues from a customer retention and acquisition perspective J.D. Power, J.D. Power 2013 North America Rental Car Satisfaction Study. 8. J.D. Power, J.D. Power 2013 Cruise Line Satisfaction Report. 5. ACSI, American Customer Satisfaction Index Travel Report Teleperformance, Teleperformance Worldwide Multichannel Customer Experience Survey 2014, US Internet Travel Sites.
5 Are Travel Operators Meeting Expectations of Multigenerational Travelers? Understanding what customers want is one of the most important elements in creating a successful and memorable experience for them. As multigenerational vacations continue to be a top trend within the industry, channel flexibility will play a key role in offering a customer experience that will appeal to different generations. Although many travel operators offer customers a variety of channels for contact, they may not clearly understand their customers preferences and expectations for interaction, especially from a multigenerational viewpoint. There should be a focus on understanding what traditional as well as emerging channels are preferred. 5
6 Figure 3: Preferred Channels Airlines (Source: Teleperformance Worldwide Multichannel CX Survey 2014, US Airlines) 60% 65% 55% 54% Voice 28% 29% 30% 28% /Web form 8% Baby Boomers Generation X Generation Y TT% Sample 2% 1% 1% 0.4% 0.4% 0.5% 5% 8% 12% 3% 3% 1% 2% 1% 1% 1% 1% 0% 1% 1% 0% 0% Chat with live agent Social media Mobile app Skype SMS In person Other Figure 4: Preferred Channels Internet Travel Sites (Source: Teleperformance Worldwide Multichannel CX Survey 2014, US Internet Travel Sites) 56% 62% 51% 52% 24% 26% 29% 27% 13% 10% 14% 14% Baby Boomers Generation X Generation Y TT% Sample 2% 1.5% 0.7% 0.4% 0.4% 1% 2% 3% 1% 2% 2% 1% 1% 0% 1% 2% 0% Recent Multichannel CX Survey research for the airline and Internet travel site segments offers an observation of channels preferred by generation. There is overwhelming preference for the voice channel for airlines and Internet travel sites, at 60% and 56%, respectively (see figures 3 and 4). Rounding out the top three channel preferences for both segments are /web form and live agent chat. Continued growth is expected for social media and mobile app channels, and it s recommended that travel operators diversify their channel mix for greater flexibility and ability to better service multiple generations. The survey also shows that 20% of the respondents who traveled with an airline in the last twelve months utilized three or more channels to interact with customer service. For respondents who used Internet travel sites, this percentage slightly increases to 22%. Taking a closer look at the younger age group represented by Generation Y, these percentages jumped to 35% for airlines and 29% for Internet travel sites Teleperformance, Teleperformance Worldwide Multichannel Customer Experience Survey 2014, US Airlines and US Internet Travel Sites. 6 Voice /Web form Chat with live agent Social media Mobile app Skype SMS In person Age groups definition: Baby Boomers: Generation X: Generation Y:
7 Challenges with Technology 32% expect a response within 30 minutes... and 24% expect a reply within 30 minutes regardless of when the contact was made. Despite the fact that many companies within the travel industry are using technology to improve customer service, such as through optimized websites and mobile apps, they lack the ability to collect customer data across all touch points in order to deliver a truly personalized customer experience that s customized and seamless across channels. For example, what if a customer begins communication with a service agent but has to continue the conversation at a later time? If a customer begins contact via a company s social media page and then switches to a voice channel for private communication, and later wants to continue the transaction or communication via click-to-chat on a smart device, service agents should be able to pick up where the conversation left off. Social Media Over the last few years, the social media platforms of travel companies have become more popular places for customers seeking help. An important point to remember is that customers reaching out to a company on social media whether it s to ask a question, complain, or give praise expect a quick response from service agents, possibly quicker than they do in other channels. Recent research shares that among respondents who have ever attempted to contact a brand, product, or company through social media for customer support, 32% expect a response within 30 minutes... and 24% expect a reply within 30 minutes regardless of when the contact was made. 10 When customer questions go unanswered in posts, it s the same as ignoring them, which can negatively affect customer trust and advocacy. Connectivity As customers across all generations become increasingly tech-savvy, they expect to have further connectivity with travel companies not only during booking and reservation processes but also while traveling. This expectation has been more challenging for some segments of the travel industry than others. Cruise line customers, for example, have grown accustomed to being disconnected while at sea, which is problematic given the popularity of social media and the propensity for people to share their travel experiences. In an effort to better serve multigenerational travelers, and Gen-Yers in particular, cruise lines are looking for new technologies that will allow connectivity via smart devices and social media, and therefore improve the customer experience. For example, Royal Caribbean International is investing in technology called O3B, which uses a satellite constellation designed to deliver improved connectivity to areas that are not effectively served with broadband Internet access Sprout Social, #Be Present: Why Responding Quickly to Customers on Social Is Critical, March 21, Reiss, Robert, The Keys to Exceptional Customer Experience, from Visionary CMOs of Travel, Forbes.com, August 19,
8 Negative Sentiment and Trust Issues Surcharges are present within many segments of the travel industry, including hoteliers. This year, hotels will take in a record $2.25 billion in revenue from... add-ons, 6% more than in 2013 and nearly double that of a decade ago. 12 Travelers are becoming increasingly sensitive to these extra charges not only because they feel the fees are hidden in the fine print, but also because it s difficult to accurately anticipate and budget the cost of a vacation or business trip. Such issues can negatively impact levels of customer trust and satisfaction, and this can affect brand advocacy. Although some travel operators are trying to reestablish trust with customers through improved communication about billing, there are many companies still struggling to find the right blueprint for success. In order to be a preferred travel operator today, companies need to be proactive in building a positive brand image and overcoming the perceptual disadvantage of additional fees. 12. Jernigan, Joy, Beyond the Minibar: Hotels Up the Ante on Fees, Today.com, August 25,
9 5 Fundamentals for Improving Customer Experience The ability to deliver a door-to-door customer experience to an individual that s complementary to their preferences, travel interests, and activities can distinguish a company from its competitors. This can build brand advocacy, which can result in repeat business from loyal customers. 1. Collate Customer Insight A company can use a variety of ways to collate customer insight surveying customer preferences, reviewing analytics, employing predictive modeling, and tracking channel usage, to name a few. This data will allow companies to see gaps in service as well as understand how customers are moving between channels. With US economic improvement and longer life expectancies, the popularity of multigenerational travel will likely continue to grow. By analyzing data of Baby Boomers, Generation X, and Generation Y customers, travel companies can create a multichannel strategy that will help deliver an excellent customer experience to travelers in these different groups. Travel operators should work with a company that has the capability to gather research data and analytics across channels. 2. Invest in Technology Leverage technology that will strengthen overall service levels by partnering with an outsourcer who invests in state-of-the-art customer experience management software and platforms that meet stringent security protocols. The additional technology and services that an outsourcer can provide, for example, can help companies eliminate capital expenditures, transitioning fixed costs into variable costs. 3. Offer More Than a Social Media Channel Provide Social Care Travel companies should be where their customers are, and today that s on social media. Social media is an essential part of doing business. Companies should actively participate with customers and provide exemplary and attentive customer care (i.e., social care ) on the platforms customers prefer to use. They will be better positioned to capture additional revenue associated with customers using this channel. Companies should build customer advocacy by leveraging a Listen, Engage, and Support approach. Quickly answering questions and fixing issues will go a long way in pleasing unhappy customers. 4. Know What Drives Positive Customer Sentiment Improving customer sentiment will help increase levels of brand advocacy. Know what drives positive results, such as: Professionalism of the team Clear and effective communication with customers about extra fees and surcharges Timeliness of responses Ability to quickly solve issues Agents empathy 5. Invest in Talent One message is clear: Having a dedicated, experienced customer care team in place to deliver a holistic customer experience is absolutely necessary for success. Hiring the right talent for specific customer contact and/or support roles is key. But it s not just about hiring the right people; ongoing coaching, mentoring, and training for employees are also vital. Focusing on employee satisfaction is an important component to providing an excellent customer experience. 9
10 Closing Thoughts There is little doubt that customer experience management will continue to be demand-driven by consumers. To gain a strategic advantage, travel operators should provide a successful, seamless, and consistent customer experience across all channels, being mindful to offer a suite of channels that appeals to multiple generations. In the current travel industry environment, this should include online and digital solutions such as click-to-chat, social media, and mobile apps. Implementing a multichannel approach can build brand advocacy and generate new revenues. As online and digital channels for service continue to evolve, it will be imperative for companies to gather solid intelligence via research data and analytics for a clear understanding of what customers are doing, especially across different generations. This strategy can illuminate opportunities for travel operators to tailor channels, products, and services not only to customers in general but also to multigenerational travelers. A partnership with Teleperformance can help you deliver an exceptional customer experience. Working together as a team, we can discover solutions that are key for your company to succeed in the travel and tourism landscape of today as well as tomorrow. 10
11 About Teleperformance Experts in Outstanding Customer Experience We are a people company with a people-centric strategy, interacting with people all over the world. It s all about people. They are part of who we are and what we do. We analyze their behaviors. We understand their wants and needs. That s why we deliver outstanding customer experiences through integrated multichannel solutions to enhance customer experience results for our clients. About Teleperformance Customer Experience Lab Teleperformance Customer Experience Lab (CX Lab) is an innovative center for the research of specific issues related to changing customer behaviors with a focus on major drivers of satisfaction across geographies and sectors. The Lab combines multidisciplinary skills, including industry research, analytics, social media, Internet interactions, and mobile services. The Group operates more than 135,000 computerized workstations with close to 175,000 employees across 270 contact centers in 62 countries and serves more than 150 markets. It manages programs in 63 languages and dialects on behalf of major international companies operating in a wide variety of industries. For more information, please visit Millrock Drive Holladay, UT info@teleperformance.com The Worldwide Multichannel CX Survey is our global market research developed by the CX Lab that provides meaningful insights about how customers relate to brands, their attitudes, and preferences. In the 2014 edition, Teleperformance interviewed more than 100,000 end-consumers from 15 industries (including airlines and Internet travel sites) across 8 markets (Brazil, China, Colombia, France, Germany, Mexico, United Kingdom, and United States). To learn more about the CX Lab, please send a message to CXLab@teleperformance.com. 11 This paper is part of a wide range of analysis created by Teleperformance to provide relevant information to guide better decisions for the future.
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