Case Study: Delta Air Lines How Delta Uses Microsoft Dynamics and Avanade to Create Next- Generation Customer Experiences Deeper Insights Provide More Personalized Customer Experiences via Mobile, In-Flight POS System By Dr. Natalie L. Petouhoff Vice President and Principal Analyst Content Editor: R Ray Wang Copy Editor: Maria Shao June 11, 2014
Problems Improve in-flight experience for customers Improve in-flight effectiveness/productivity of flight attendants Reduce revenue losses from in-flight transactions Solution Integrated solution of Wi-Fi-enabled handsets (Nokia s Lumia 820 devices) connected via Microsoft Dynamics and Avanade s Retail Mobile Point-of-Sales Platform Benefits Near real-time credit card processing for onboard purchases Increased transactions per flight and less revenue loss More personalized customer experiences More time for flight attendants to serve customers Convenient e-receipts delivered by email to customers Delta Air Lines flies more than 165 million customers a year, including 90 million frequent flyers 1 in over 700 aircraft serving more than 322 destinations in 57 countries on six continents 2. Delta participates in the industry's leading trans-atlantic joint venture with Air France-KLM. It also is a founding member of the SkyTeam Global alliance, a partnership of 20 airlines. Through this worldwide alliance 3, Delta offers 588 million customers a year 15,700 daily flights to 1,064 destination in 178 countries, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris Charles De Gaulle, Salt Lake City and Tokyo Narita. Company: Delta Air Lines Headquarters: Atlanta, Ga. No. Employees: 80,000 worldwide Industry: Travel Customers: 165 million worldwide; 90 million frequent flyers Transactions: As part of an ongoing effort to innovate in travel, Delta is investing more than $3 billion in airport facilities and global products, services and technology to enhance inflight and on-the-ground customer experiences. For example, Delta launched a new version of its website delta.com and revamped its self-service kiosks. Delta also has focused on mobile customer experiences by providing the Fly Delta app for the iphone, Windows Phone, Android and Blackberry smartphones and the ipad. In addition, Delta also offers in-flight Wi-Fi on more than 700 aircraft. Offers 15,000 flights daily Provides service to 322 destinations in 57 countries on six continents 2014 Constellation Research, Inc. All rights reserved 2
This continuous emphasis on enhancing the customer experience has gained Delta honors many times, including 4 : Fortune Magazine s Most Admired Airline Worldwide in 2013 The Cannes Lions International Festival of Creativity: Bronze Lion for Fly Delta app Stevie Awards for Sales & Customer Service: o Gold, Silver and Bronze Stevies for Delta Reservations in Frontline Customer Service Professional of the Year -Transportation o Gold Stevie for @DeltaAssist in the ecommerce Customer Service Award o Gold Stevie for Delta Sales Support o Silver Stevie for Reservations o Customer Care in Customer Service Department of the Year Airlines, Distribution & Transportation Air Transport World 2014 Airline of the Year Award 5 the first time the honor has gone to a U.S. carrier in a decade Three Gold ADDY Awards for the Delta Kiosk Five-Star Diamond Award for the new Terminal 4 at New York JFK Air Transport Rating Agency: No. 1 ranking in the Holistic World Safety Awards Business Traveller Magazine s Best North American Airline Dow Jones Sustainability Index (DJSI), named for the third consecutive year by DJSI for North America, recognizing commitment to integrate sustainable practices into the workplace. As more and more people have real-time information at their fingertips, especially on handheld devices, customers are now more savvy and demanding than ever. Travelers want the best deal and the best customer experience. They want to know their favorite airline has their best interest at heart. The airline industry is operating in an environment where the competitor is one click away. We are helping Delta to drive a customercentric culture;; that s especially important because consumers have more options at their fingertips than ever before. Kirill Tatarinov Executive Vice President Microsoft Business Solutions In this highly competitive and commoditized industry, Airlines without top notch customer experience find it difficult to differentiate from their competition. Airlines not focused on enhancing customer experience are at risk for not being able to attract and retain loyal customers, especially those with a high customer lifetime value. As a forward-looking airline, Delta invested in transforming the in-flight experience with significant technology-based strategies, innovations and upgrades to the in-cabin equipment. However, Delta realized its in-flight, legacy point-of-sale system (POS) system could only provide very basic transaction data for things like travelers purchases of food, headphones and duty-free items. And because the in-flight POS system could not reconcile whether a credit card purchase had been approved in real 2014 Constellation Research, Inc. All rights reserved 3
time, the airline had no idea if the credit card transaction was approved or declined. This meant the airline was losing revenue from in-flight purchases. The challenge for Delta was discovering how to provide a real-time, in-flight, wireless POS system to reduce lost revenue, while enhancing both the customer experience and flight attendant efficiency and effectiveness. Improving Efficiency and Effectiveness In-Flight for Beverage, Food and Duty-Free Purchase System In addition to assuring Delta s customers safety during a flight and offering the traditional free drink and snack, Delta s flight attendants were also given the additional responsibility of offering for sale food, beverages and duty-free items. As flight attendants pushed carts up and down the aisle offering in-flight services, when a customer wanted to purchase something, Delta s legacy transaction/customer data system required the flight attendant to enter the in-flight customer transaction data into his or her device by hand. Because the legacy, hand-held system was so clunky, the additional duty of offering in-flight purchases took extra time and thus increased flight attendants stress as they hurried to serve all the customers. In addition, the POS systems had to stay on the plane and were costly to maintain. In essence, the old POS system was reducing the quality of the service that flight attendants could provide customers. Managing In-Flight Data at Headquarters: Power of Near Real- Time Data to Improve Customer Experience and Revenue Companies in all industries need to enable an end-toend customer experience across multiple channels. And Delta wanted to enable its employees with new ways of working that can drive greater productivity and better engagement with customers. In addition, the in-flight legacy system was not integrated with the back-end Customer Relationship Management (CRM) platform at headquarters in Atlanta, Ga. Because of this lack of integration along with the lack of high-speed, wireless connectivity, Delta had no way of knowing in real time, for instance, whether a customer s credit card had been approved or declined. It was not until after a plane had landed and the data was transferred to the CRM system that Delta knew which transactions were valid and which were not approved. And after passengers had disembarked, it was too late to try Dan O' Hara to recover those lost revenues. As a result, instead of Mobility Vice President increasing revenue from these additional in-flight services, Avanade the airline was in jeopardy of losing revenue. All of these factors added up to a decrease in flight attendant efficiency and effectiveness in providing great customer experiences and boosting revenue. 2014 Constellation Research, Inc. All rights reserved 4
Analyst Bio: Dr. Natalie L. Petouhoff Dr. Natalie L. Petouhoff can be reached at Natalie@ConstellationR.com. Dr. Natalie, whose research focuses on Digital Marketing Transformation, Next-Generation Customer Experience and Data to Decisions, expands Constellation s ability to provide practical business and leadership transformation research/solutions to its early adopter clients worldwide. She provides companies with solutions that drive increased customer lifetime value and social return on investment (ROI) and a commitment to provide the most comprehensive analysis of disruptive technologies that drive real business results. Dr. Natalie will work with Fortune 100 and 500 companies senior leadership teams to create strategic marketing and customer experience solutions along with the Big Data insights to inform programs to engage customers, build brands and grow businesses. She leverages her diverse roles in Marketing/PR, Sales, Customer Service, Customer Experience and Product Innovation to provide down-to-earth guidance, with a strong cross-functional point of view for clients looking to integrate and leverage their people, process and technology. Combining her experience as a chief strategist for a social and digital marketing agency, Forrester software analyst, PWC software systems integrator and change management consultant, Dr. Natalie will guide executive think tanks in discussion about how the C-suite can take ownership of technology decisions and transform them into initiatives to increase ROI from customer and social media engagement. Dr. Natalie provides clients with insights and analysis as well as much-needed training and education. Her cross-functional expertise helps clients dominate digital disruption. Twitter: @drnatalie Blog: https://www.constellationr.com/users/nataliepetouhoff LinkedIn: www.linkedin.com/in/drnataliepetouhoff/ 2014 Constellation Research, Inc. All rights reserved 10
About Constellation Research Constellation Research is a research and advisory firm that helps organizations navigate the challenges of digital disruption through business models transformation and the judicious application of disruptive technologies. This renowned group of experienced analysts, led by R Ray Wang, focuses on business-themed research, including Digital Marketing Transformation; Future of Work; Next-Generation Customer Experience; Data to Decisions; Matrix Commerce; Technology Optimization and Innovation; and Consumerization of IT and the New C-Suite. Unlike the legacy analyst firms, Constellation Research is disrupting how research is accessed, what topics are covered and how clients can partner with a research firm to achieve success. Over 225 clients have joined from an ecosystem of buyers, partners, solution providers, C-suite, boards of directors and vendor clients. Our mission is to identify, validate and share insights with our clients. Most of our clients share a common trait - the passion for learning, innovating and delivering impactful results. Organizational Highlights Founded and headquartered in the San Francisco Bay Area, United States, in 2010. Named Institute of Industry Analyst Relations (IIAR) New Analyst Firm of the Year in 2011. Serving over 225 buy-side and sell-side clients around the globe. Experienced research team with an average of 21 years of practitioner, management and industry experience. Creators of the Constellation Supernova Awards the industry s first and largest recognition of innovators, pioneers and teams who apply emerging and disruptive technology to drive business value. Organizers of the Constellation Connected Enterprise an innovation summit and best practices knowledge-sharing retreat for business leaders. Founders of Constellation Academy, experiential workshops in applying disruptive technology to disruptive business models. Website: www.constellationr.com Contact: info@constellationr.com Twitter: @ConstellationRG Sales: sales@constellationr.com Unauthorized reproduction or distribution in whole or in part in any form, including photocopying, faxing, image scanning, e-mailing, digitization, or making available for electronic downloading is prohibited without written permission from Constellation Research, Inc. Prior to photocopying, scanning, and digitizing items for internal or personal use, please contact Constellation Research, Inc. All trade names, trademarks, or registered trademarks are trade names, trademarks, or registered trademarks of their respective owners. Information contained in this publication has been compiled from sources believed to be reliable, but the accuracy of this information is not guaranteed. Constellation Research, Inc. disclaims all warranties and conditions with regard to the content, express or implied, including warranties of merchantability and fitness for a particular purpose, nor assumes any legal liability for the accuracy, completeness, or usefulness of any information contained herein. Any reference to a commercial product, process, or service does not imply or constitute an endorsement of the same by Constellation Research, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold or distributed with the understanding that Constellation Research, Inc. is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Constellation Research, Inc. assumes no liability for how this information is used or applied nor makes any express warranties on outcomes. (Modified from the Declaration of Principles jointly adopted by the American Bar Association and a Committee of San Francisco Andalucia Austin Belfast Boston Chicago Colorado Springs Denver London Los Angeles Monta Vista New York Pune Sacramento San Diego Santa Monica Sedona Sydney Tokyo Toronto Washington D.C. 2014 Constellation Research, Inc. All rights reserved 11
Endnotes 1 http://www.cbsnews.com/news/delta-to-change-how-it-calculates-frequent-flyerprogram/ 2 http://news.delta.com/index.php?s=18&cat=47 3 http://www.skyteam.com/general-information/faq/general-alliance-questions/ 4 http://news.delta.com/index.php?s=18&cat=43 5 http://atwonline.com/airlines/delta-air-lines-2014-atw-airline-year 2014 Constellation Research, Inc. All rights reserved 12