Crm In Traffic Business

Customer Relationship Management in the traffic business Daniel Leitner 5BT Subject: Verkehr und Reisebüro Teacher: Prof. Sonja Schusteritsch Date: May 2009

Customer Relationship Management in the traffic business

2009

I. Preface In our Century the tourism business is facing a high market competition. Now, in the aftermath of the financial crisis in the year 2008 our whole economy has to struggle with severe economical problems and we don’t know what is coming in the future. However, the tourism business and the traffic business are less affected at the moment but in future the branch has to cope with the impacts of the economical development. In addition, in the traffic business there are fewer innovations which underlie the high market competition. In future, only these companies will survive which offer the best customer service and customer friendliness. Due to my opinion, the solution for the market problems in the tourism and traffic business will be to reorganize the company customer-oriented. Tourism companies, which cultivate sustainable customer relationships, process collected customer data and use the data at the right place to the right time, will gain immense advantages against competitors. For me personally, the reason why I’ve chosen this topic for my skilled work is that the CRM combines marketing, IT-knowledge, and even psychology together. CRM is for me a very interesting and thrilling topic and I think the ideas and background knowledge behind the CRM will be very helpful for me in my further lifetime. I pursued to provide a general overview about the topic and with the aid of the Verkehrsbüro Group case study I want to give an example how CRM is implemented into a traffic and tourism company.

Declaration of independence With these words I am declaring that I have written this skilled work on my own, that I have just used the stated records and that I have nowhere submitted this skilled work for examination purposes.

Glanegg, 02 March 2009

Daniel Leitner

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Index I.

Preface............................................................................................................................................. 2

II.

General Overview of the CRM ......................................................................................................... 4 a.

History and the development of Customer Management .......................................................... 4 i.

Chronological perspective of the Customer management ..................................................... 4

b.

What is CRM? .............................................................................................................................. 8

c.

Goals of CRM ............................................................................................................................... 8

d.

Tasks of CRM ............................................................................................................................. 11

e.

Core competences of the CRM: ................................................................................................ 12

f.

Functional Chain of CRM ........................................................................................................... 14

III.

CRM in a travel agency .............................................................................................................. 16

a.

Why is CRM so important? ........................................................................................................ 16

b.

The travel agency as a customer oriented company ................................................................ 16

c.

Implementation of CRM in a travel agency ............................................................................... 17

IV.

Case study: Österreichisches Verkehrsbüro AG ........................................................................ 23

a.

Verkehrsbüro-Ruefa Reisen Gmbh ............................................................................................ 23 i.

Mission statement:................................................................................................................ 23

ii.

History: .................................................................................................................................. 23

iii.

Concern Structure: ................................................................................................................ 24

iv.

Core Business ........................................................................................................................ 25

v.

Guiding principles: ................................................................................................................. 26

vi.

Business strategy: .................................................................................................................. 27

b.

Strategy and Implementation of CRM in the Verkehrsbüro Group .......................................... 28

c.

Technical CRM-component: ...................................................................................................... 31 i.

Software “Jack” ..................................................................................................................... 31

V.

Conclusion ..................................................................................................................................... 34

VI.

Appendix.................................................................................................................................... 35

VII.

List of literature ......................................................................................................................... 37

VIII.

Table of Figures ......................................................................................................................... 39

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Customer Relationship Management in the traffic business

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II. General Overview of the CRM a. History and the development of Customer Management1 For decades companies all over the world were focused on selling products as much as possible without making a difference who buys the product. In the last 30 years the markets have been get saturated, capacities of economical growth were reached and new seller markets have established in the world economy. The enormous pressure on global markets leads to a reorientation onto the customer needs and to a creation of new strategies and types of marketing. However, companies have to cope with many new economical and social challenges: •

• • •

•

The amount of consumer customers and business clients is decreasing due to economical and demographical developments. The consumer demand is getting saturated; there is a need for more customer liaison and support – customers getting more and more abundant. New target groups (like the youth segment in Asia) are less explored and there is less information about these new available target groups. The conscious of the customer for quality and prices is increasing rapidly because they can compare products over the internet – customers are getting cleverer! New distribution channels (online distribution...) are opening up a faster and a more direct contact with the customer – new competitors getting a faster contact with the customer. The customer behaviour is getting less predictable. Processing the knowledge about the customer is getting a major factor in the process of customer orientation2

In addition, due to these factors, all activities in the company have to be focused onto the customer. On the long term scale, only these companies which cultivate their customer relationship and learn from their clients will obtain a sustainable advantage against their competitors. i.

Chronological perspective of the Customer management3

In the early 70s revolutionary marketing campaigns “The customer is the king” or the famous Burger King commercial slogan “Have it your way” were the first some kind of customer oriented activities of bigger companies. This era is the hour of birth of the Customer Relationship management.

1

ref. (Brasch, Köder, & Rapp, 2007, p. 13) ref. (Hoffmann & Pfeiffe, 2002, pp. 4-6) 3 ref. (Lancaster & Reynolds, 2002, pp. 424-426) 2

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Over the next years the idea of customer orientation braced deep into the management of companies. As a result, we can divide the following epoch into four phases:

The 70s: The Orientation Phase At first, Business-to-Business providers started with Key account management to point out target clients and to improve the contact with them. The direct marketing was established and internationalized. For consumer customers companies have had to fit their supply on new customer demands. On the one hand the demand was split into high-class products and concepts (“Business class”) and on the other hand there were low-cost, mass oriented products (“Economy class”). Some new trends like standardisation of the products, automation and self-service have evolved in this decade. Self-service business concepts like IKEA, restaurant chains like McDonalds and self-service discounters like Aldi have established

The 80s: The Contact Phase After the orientation phase companies tried to find out how they can make a good first contact with the customer and how they can maintain that contact. A milestone therefore was the book “Der Moment der Warheit”, which describes that the contact between the employee and the customer is more important than the product itself. Afterwards, the customer value was even more defined through the interaction than through the product itself. In this Phase the focus was on the perfection of the customer satisfaction. The first Call-Centres were established. In the B-to-B business large companies set up sales offices near to clients for a better customer service. These innovations created new markets for invisibles.

The 90s: The Relationship Phase At the beginning of the 90s the target was the improvement of the present customer relationships. Nevertheless the customers feel satisfied companies tried to win them as loyal and engaged customers. Contact management systems, target group specialized communication and direct marketing activities were implemented. Customer clubs like the Dr. Oetker Back-Club or the adoption of loyalty card and bonus programs like Lufthansa Miles & More Card were efforts to satisfy customers. In the B-t-B business related programs like incentive travels and exhibitions were set up. 5|Page

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Since the middle of the 90s the theories of Customer Relationship Management (CRM) were realised. Segmentation of present customers, target group campaigns and the implementation of new Software programs like SAP for a better marketing controlling were established.

The 00s: The Value Phase In this stage companies tried to achieve higher revenue due to their efforts for the customer. The strategic controlling of customer relationships is the most important factor to reach a higher profit. They have to create a win-win situation for the customer and also for the company. The high pressure of competition forces companies to improve their customer relationship management in order to derive an advantage against the competitors.4

Orientation

Contacts

Relationships

Value

Marketing

Strategy

Customer Orientation

1970

Distribution

CRM

Customer Satisfaction

Customer Intimacy

Finances

Customer Contact

Customer Loyalty

Customer value management

1980

1990

2000

Figure 1: Chronological development of the Relationship Management

4

ref. (Brasch, Köder, & Rapp, 2007, pp. 19-22)

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The following table shows the development of CRM in the Lufthansa Company:

Deutsche Lufthansa: Installation of Customer Management5 Phase

Period

Department

Activities/ Further Developments

1975-94

Distribution

75: Installation Key Account Management 85: Own Travel agencies 90: Intensification direct marketing 94: Implementation Online marketing

Customer contact management

19801995

Service

80: Installation Call-Centres 90: Call-Centre Integration 90: Global Call-Centre System

Customer satisfaction

19802000

Quality management Service Marketing

90: Satisfaction measuring 92: Service Index 96: Service Initiative

Customer loyalty

1990today

Marketing

93: Installation Miles & More 95: Partnership concepts 98: Expansion status concept 99: M & M International

Customer strategy (Intimacy)

1995today

Business 99: Lufthansa Passage/ Team Development/Business Lufthansa advertising Leadership 00: Own Stores/Munich/New York

CRM

1995today

Customer Contact/ IT

Orientation Customer Orientation

Contact

Relationship

98: Data Warehouse System 99: CRM-Communication 00: New CRM – Systems 02: Intensification direct marketing 03: HON6 Circle installation, own buildings in Frankfurt

5

(Brasch, Köder, & Rapp, 2007, p. 23) first class terminal and lounge of Lufthansa’s frequent flyer program, access permitted with 600.000 flown miles per year 6

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b. What is CRM? In many books CRM is very often reduced to its technical components. Frequently CRM is defined just as an IT-tool for Customer Relationships. These definitions are very unilateral, because CRM used in a company has not to be simply on IT Software, it has to be integrated in the whole business cycle. On the other hand CRM is often practiced as a theoretical marketing solution without its IT components. As you can see, CRM can only be practiced by using the theological and the technical component together. There is a definition for CRM which includes both components: “CRM is a customer-oriented business strategy, with the aim to build up and to strengthen profitable customer contacts on long term with the help of modern IT solutions and holistic Marketing- Distribution- and Service concepts.” (Hippner & Wilde, 2007) In a great measure there is no exact distinction between “Relationship Marketing” and “Customer Relationship Management” in practice, but it has to be distinguished between these terms: The so called “Relationship Marketing” is principally concerned with attracting, maintaining and enhancing customer rapport, and includes all marketing types like CRM. You can use the term “Relationship Management” as a hypernym for the Relationship Marketing, but the Relationship Management concerns with all external relationships like with suppliers (vertical), business partners (horizontal), public authorities (lateral) or with internal relationships (for instance employees).7 As a component of the Relationship Marketing the CRM has developed from the Relationship Marketing. It is very similar to the Relationship Marketing, but the CRM is only concerned in the formation of customer contacts.8 Figure 2: Distinction between the terms

Relationship Management

Relationship Marketing

External Relationships Internal Relationships

Vertical Relationships

Potential customers

Customer Retention Management

Lost customers

Current Customers

Customer Relationship Management

c. Goals of CRM 7 8

ref. (Homburg & Bruhn, 2005, S. 8) ref. (Hippner & Wilde, 2007, pp. 17-19)

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The main aim of CRM is to reach a long-term economic success due to profitable customer relationships. Every single effort, which helps to built up profitable customer relationships, could be a task of CRM. That customer relationship is affected by the customer life cycle:9

Customer optimization

Customer Life Cycle

Customer Value

Customer value identification

Customer value saving

Prospect

Existing customer

New customer

Time

Lost customer

Figure 3: CRM in the Customer life cycle

Therefore there are 4 central goals of CRM10: 1. 2. 3. 4.

Identification and winning of profitable customers (Customer value identification) Realisation of higher customer revenues (Customer value optimization) Increasing of customer processing efficiency (Customer value optimization) Set-up of customer loyalty (Customer value saving)

The next illustration shows that the customer value has two main aspects for the company which are divided into their potential for the customer value11:

9

ref. (Weiber & Weber, 2000) ref. (Fried, 2004, p. 3) 11 ref. (Elsennweger, 2004) 10

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Customer Relationship Management in the traffic business

Customer Value 1. Transaction potential

a) Base potential

Intensification potential

c) Costreduction potential

b) Growth potential

Cross-selling potential

2. Relations potential

Up-selling potential

a) Reference potential

b) Information potential

c) Cooperation Potential

Potential due to sinking price elasticity

Figure 4: Potentials of the Customer value

1. Transaction potential:12 The transaction potential represents the sales success as a result of the current or future customer activities. The transaction potential consists of the base potential, the growth potential and the cost-reduction reduction potential.13 a) Base potential: The base potential stands for the previous intensity of the customer relationship. The central meaning of this indicator is that the customer is immune against competitive products and so that the company can count with stable revenues in future. For instance customers, which have a binding contract with a company can’t choose from competitive products. b) Growth potential: This indicator icator represents the expected positive or negative changes in the purchasing behaviour of the customer. • •

12 13

The intensification ntensification potential potentia stands tands for the future reduction or extension of the base potential The Cross-selling selling potential represents epresents the expected utilization of additional products or services. For instance, a customer has booked a package tour and bought as an additional service a guided desert tour.

ref. (Helm & Günter, 2001, pp. 3-35) 35) ref. (Hippner & Wilde, 2007, pp. 26-29) 26

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Customer Relationship Management in the traffic business

•

•

The Up-selling potential shows if current customers could afford high-class products in future. For instance, a current customer has always booked just a simple package tour, but now he has more money and so he bought a cruise ship tour. The last determinant shows that the longer the duration of a customer relationship, the more customers abandon discounts or bargains.

c) Cost-reduction potential: This potential is very influenced by the duration of the customer relationship. A long-term customer orientation is reducing cost, because specific needs of customers can be treated more efficient. For instance, collected customer data can be used for specific ad actions. 2. Relation potential:14 The behaviour of a customer during a business relationship could be helpful for the company. Thus the relation potential consists of: a) Reference potential: The Customers influence their friends or other customers to use services of a company. b) Information potential: The customer transmits valuable information (for example: positive or negative feedback) and this data can be used to optimize business activities. c) Cooperation potential: This potential includes all success increasing factors due to cooperation with the customer, especially in the b-t-b business.

d. Tasks of CRM As a result of the goals of CRM in connection with the Customer life cycle and the customer value, there are a few main tasks or main activities of the CRM. Every single task comprises a phase in the customer life cycle and a certain goal. You have to notice, in order that CRM works efficient, all of these tasks have to be fulfilled.

14

ref. (Diller, 2002, pp. 297-302)

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The next illustration shows the connection between the phases of the customer lifetime cycle, the goals of CRM and the tasks of the management:

Time

Initiation

Socialization

Phase

Goal

Task

Customer Value Identification

Prospect management

Growth and matureness

Customer Value Optimization

New Customer Management

Satisfaction- and Retention Management

Revitalization

Customer Value Saving

Customer Recovery Management

Figure 5: Tasks of CRM in the Phases of the Customer Relationship Cycle

The main tasks of CRM can only be fulfilled when the management has developed a specific CRM concept. This concept should contain concrete aims and facts for the future. This concept should be aiming to build up new customer relationships (Prospect management), to strengthen and to preserve present customer relationships (New Customer Management, Satisfaction Management), to stabilise inharmonious customer relationships (Complaint management), to hamper customer moving to competitors (Dismissal prevention management) or to win back lost customers (Customer Recovery Management).15

e. Core competences of the CRM16: In order to realize CRM in a company and to gain advantages three core competences have to be implemented into the whole CRM-process: The present business processes have to be altered across all departments and they have to be reorganized. Eventually new business processes have to be implemented. Information and communication technology: Modern ICT solutions are “CRM-Enabler” and providing tools for the support and optimization of customer-oriented business processes. They are increasing the efficiency on

15 16

ref. (Hippner & Wilde, 2007, p. 37) ref. (Hippner & Wilde, 2003, pp. 269-271)

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the long term scale. These solutions are divided into operational and analytical CRM Systems. The Operational Systems help to get in contact with the customer on the contact points. It is very important that the operational system includes the results of the Business process optimization. The analytical Systems processing the collected data of the business process in order to optimize the business processes. Change management: The change management accompanies the whole CRM project from the beginning onwards. It helps to motivate and to qualify all employees in the company for the project and it aims to minimize resistances. CRM-Project management: The central objective of the project management is to control all CRM processes. As we can see, CRM implementation is a complex process with long-term goals, and in order to reach these goals, the project management has to investigate very early indicators for success or defeat of the project.

CRM-Project Management

CRM Strategy

Optimization of Business processes

Implementation of CRM

Change Management

Figure 6: Core competences in the CRM process

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f. Functional Chain of CRM17 The implementation of a CRM strategy in a company is often not very unsuccessful because CRM can only work if a five phase program has been evolved by the company. Very often companies don’t care about these very important steps to a successful future with CRM. But all these steps are positively or negatively influenced by external and internal factors. General external influences of the phases by the market and the competition: • • • •

Market position and –dynamic Line of business Competition structure Competition behaviour and other

I will list subsequently the five phases and the external and internal influences of each:

Phase 1: Conception of a Customer Relationship Strategy • Verbalisation of core strategies • Customer oriented management concepts • Multi channel management There is no direct internal influence for the conception phase.

Phase 2: Customer Oriented Reorganisation • Business process optimisation • CRM-Systems • Change Management • CRM-Project management Internal Influences:
Acceptance of the employees
Support of the management
Present IT- and Organisation structure
Capital commitments

Phase 3: Alteration of the Customer Behaviour and the Customer attitude • Customer satisfaction • Customer loyalty • Customer retention

17

ref. (Hippner & Wilde, 2007, p. 22)

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External Influences:
Customer expectations
Variety seeking
Price sensitiveness
Brand feeling Internal Influences:
Quality of the CRM process
Quality of the products and services
Degree of individualization
Employee motivation Phase 4: Economical success due to • Quality of customer relationships • Quantity of customer relationships • Duration of customer relationships External factors:
Customer fluctuation
Revenue potential of customers Internal factors:
Setting up of customer fluctuation barriers
Wide program variety

Economical sucess

Customer oriented reorganisation

Alteration of customer behaviour and attidude

Conception of strategies

Figure 7: Functional Chain of CRM

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III. CRM in a travel agency a. Why is CRM so important? In the last few decades there was a change in the behaviour of the customers. More and more tourism providers (for instance tour operators, hotels, traffic companies) started to offer their products and services directly to the customer via new distribution partners like the Internet, Call centres and others. At the same time customers grasp more opportunities to use these information channels to make direct bookings. As a result a few very important strategic advantages for the travel agency have evolved: the personal contact, the interaction with the customer and the personal consulting service. Most of the travel agencies are improving their personal services in order to insure their existence. Therewith the improved services and consultation services enhance the revenue, they have to be targeted and to be customer individualized. CRM provides useful tools to offer the right customer to the right time the right service.

b. The travel agency as a customer oriented company The direct contact with the customer offers perfect opportunities for the travel agency to implement customer orientated programs. As mentioned before, in order to get a profit out of these advantages, the whole organisation has to be customer oriented. Therefore one of the tasks of a customer oriented company is to know the customer expectations for quality, costs and time and to focus the company on these expectations (Fried, 2004).

Customer expectations • •

•

Management of a travel agency

Personal and demand oriented Service Capable Quality communication partner Continual service quality

•

Appropriate priceservice relation

• •

Accessibility Fast and uncomplicated problem solutions

Costs

Time

Customer oriented organization •

Processes

People

• • • •

Advanced Education Personnel progress Staff planning

•

Process supporting Technologies Comprehensive Information/Data management

Technology

Customer oriented processes Clear rules and responsibilities

•

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That means for the company:
The processes in the Front Office and also also in the Back office have to be altered a that the customer can book trouble-free trouble and with a good feeling. For that it’s necessary to set up clear rules and responsibilities for the customer processes.
One of the major ajor success factors for CRM are the people in charge. In the past the focuss of advanced education programs was just on the product knowledge, but nowadays employees should be trained on the dealing with the customer. Also the staff planning (opening hours, availabilities) should be matching with the customer expectations.
The application plication of modern technologies, like the use of professional customer databases, the installation of modern telephone systems or the setup of an internet platform is a permanent content of CRM concepts. As mentioned before, the importance of the technology technology should not be overrated, because often if too much technology is involved in the customer relationship, the customer gets out of the focus. It is very important that the management and also the employees are committed and don’t lose fun by the implementation tation of CRM in the company.

c. Implementation of CRM in a travel agency18 The implementation of a CRM concept is a long-term, long term, never completed process. The aim is to expand and establish present and new customer relationships systematically. The following example xample shows how the intensity of relationships with valuable customers can be increased and at the same time the long term profitability of these customers maintains or even increases. The concept is divided into four phases:

2. Identify

1. Understand

18

4. Retain

3. Strengthen

4. Benefit

ref. (Fried, 2004, p. 4)

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Understand

The base of every relationship is the understanding of the situation of the other. The aim for the travel agency is to understand the present environment of the potential customer and to know his expectation and requirements for a good relationship. Information for the travel agency19: The company has to analyse internal and external information sources. The internal customer knowledge should be collected in a good structured customer database, for instance:
Contact data (address, telephone number, e-mail)
Personal data (birthday, marital status, hobbies, personal preferences)
Preferred destinations, last bookings The sustainable benefit of external information is often underestimated:
Newspapers and magazines (like “bulletin”)
Associations (Statistic Austria, ÖW)
Free accessible sources like Behaviour- and trend studies This information should be analysed and should help to predict expectations and requirements of the customer in future. It is very helpful to create customer profiles. These following attributes can be attached to the customer database:
Type of holiday (Requirement and expectations)
Holiday interests (for instance sun/beach/sea, sport, country & people)
Preferred mean of transport (plane, train, car)
Planned holiday destination
Travel participants (Family, single, couple)
Number of travels per anno
Holiday budget per anno (not exact)
Information sources (Internet...)

Figure 8: Motivations for Travelling 2007

Therefore this information could be used for customer specific direct marketing campaigns (e.g. mailings, telephone marketing). 19

ref. (Fried, 2004, pp. 4-5)

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Identify:

Resulting to the CRM-approach approach companies have to concentrate on long-term long term profitable customer segments and to handle them effectively. effective . Most of the companies generate 80 % of their revenue from 20 % of the customers but they look after all the customers like lik the same. The segmentation of the customers due to long-term long term profitability is one of the most important analyticall tasks of the management. A foretime related related and a future related analysis is the base for the recognition of valuable customers Foretime related:
Past value of the customer
Criteria for segmentation: customer revenue and gross margin Future Related: The assessment of the customer life value is future related and considers the whole duration of the relationship.
Quantitative (expected revenues revenue and costs)
Qualitative (word-of-mouth mouth distribution...) The management should d analyse the data and reckon in the customer lifetime value.

high

At the beginning of the CRM project a foretime related segmentation is enough, but new or young travel agency customers mers (present value is less, but maybe high potential) should be fairly mentioned. The result lt of the customer value analysis could be represented in a customer portfolio: Figure 9:: Customer Portfolio

low Customer Potenzial

Star customers: high present value, high igh potential Question marks: high potential but low present value ”Poor dogs”: low present value and low potential “Cash-cows”: cows”: high presentvalue but no potential low

Present customer value

high

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Strengthen

The results of the “Understand” (Customer profile) and “Identify” (Customer value) forming the base for the development of specific customer care strategies. As a first step these fundamental customer care components can be set up:20 Stars Delivery of new prospects Information, that new prospects are available Birthday present Birthday card Invitation to events Target group specific directmarketing Discount programs

Question marks Cash-cows X

Poor dogs

X

X

X

X X

X

X

X X

X

X

X X

Table 1: Services of the Travel agency

Additionally to the fundamental services offers the customer life cycle and the buy-servicecycle ideal opportunities for more individual services. Therefore it is very important to be creative and active, so that the customer has many little moments of surprise. Multichannel management in the travel agency21: In addition, the travel agency communicates with the customer over many channels. The decision, which channel the travel agency in which phase of the customer interaction offers, depends on the media, which the customer prefers to use. Moreover, the company has to deside, which media it can use, which medium is affortable and which fits to the company.

20 21

ref. (Grönroos, 2000) ref. (Fried, 2004, p. 7)

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Customer Relationship Management in the traffic business

Media

Customer process

Information

Phone call

Buy

Pre-trip

Mail

Telefax

On-trip trip

E-mail mail

Post-trip

Internet

Channel

Conversation

Decicion

2009

Travel agency Travel agency process

Information

Mobile travel agent

Offer

Booking

Telefone contact

Alterations/ cancellation

Fullfillment/ accounting

Homepage

Travel realization

Complaints/ Services

Figure 10:: Customer Related Service in the t Phases of the Customer Process

Most of the customers change the kind of media media during the relationship with the travel agency. Additionally the travel agency needs a multichannel management so that the media overreaching customer process can work efficiently. efficient . This should meet these requirements22:
Every channel has to have the same sam quality
The customer has to be identified in every channel
The employees in charge have to be qualified to perform with a certain channel (for instance not every front desk employee is suitable for the telephone sell) Retain23

Recently published studies have proven that there is a decrease of the customer loyalty to companies.. The studies have also pointed out that the winning of new customers custom is five times more expensive than to retain present customers. Nevertheless customer retention management has gained ined more and more importance for a travel agency. The company, who aims to retain a profitable customer to the travel agency in the view, view has to invest more time and even much more money (mostly the small things making the difference). It is very important ant that every employee in the travel agency gets involved with the customer and knows their requirements. The basis for that is that the customer trusts

22 23

ref. (Fried, 2004, p. 8) ref. (Bliemel & Eggert, 1998, pp. 37-45) 37

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necessary information frequently to the company. Such an information exchange between both parties needs that the customer is involved in additional contact occasions.

Examples for contact occasions24:
Events for special target groups (for instance meeting of long-haul destination travellers)
Idea competition for the design of the travel agency or shop window
Winning of customer as “Target destination experts”
Frequent message of a Newsletter (“What is new at the travel agency”)
Customer satisfaction surveys
Frequent support call
Employees’ accompany well book travels In these examples the emotional contact with the customer and is the most important aspect. The customer feels the difference to competitors because of the unique contact. Benefit25

To give customers some kind of benefits is very time and cost intensive. Hence only these customers; so called “star customers”; with a high potential of recommendation should deserve these services. Requirements for the travel agency:
The contact person should know the travel needs of the star customers
The contact person should look very frequently for suitable travel offers
Individual presents in relation to future holidays
Invitations to new and exclusive holiday tours In return these star customers advertise indirectly but very actively for the travel agency. The most successful advertising method is via word-to-mouth advertising in their close environment (family, friends, and workplace).

24 25

interview with Andrea Sussitz, Verkehrsbüro Group, February 2009 ref. (Fried, 2004, p. 10)

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IV. Case study: Österreichisches Verkehrsbüro AG In the third chapter I want to show how CRM could be implemented implemented into a tourism company. I have chosen the Verkehrsbüro Group Group as an example for my case study because the Verkehrsbüro Group is one of the largest tourism companies in Austria and expands sharply.. The Verkehrsbüro Group offers also a wide range of examples for a perfect customer oriented business strategy and a “one face to the customer” orientation for a company in the traffic business. Visible in this case study are the differences between theory and practice.

a. VerkehrsbüroVerkehrsbüro-Ruefa Reisen Gmbh

i.

Mission statement:

“The Verkehrsbüro Group is Austria’s leading Service ice enterprise in the tourism and hotel business. We want to increase our success in Austria and that implies the international growth.. We delight our customers with the highest quality standards.” (Verkehrsbüro Group, 2009) ii.

History:

The Verkehrsbüro Group is the largest and oldest tourism enterprise in Austria. It was founded in 1917, during the First World War. At the very beginning there was the ticket sale In the early 20s, the task of the Verkehrsbüro was to organize the ticket sale system of the Austrian State Railroads. In the year 1921 three million tickets were sold. The firs baggage insurances were sold. As additional services the Verkehrsbüro offered money exchange, travel cheques and travel books. The Verkehrsbüro expanded Very soon the company had agreements with all larger cruise ship companies in Europe and the first air ticket was sold. In quick succession the Verkehrsbüro was the first company which had layovers in Vienna and published the first travel newspaper. newspape 23 | P a g e

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With support of the Austrian an Mail organisation the company installed the first scheduled bus network in the Salzkammergut. Although the economy plunged down in the year 1923, the Verkehrsbüro completed its central building in front of the "Sezession", bought ught hotels and the liner shipping on the Lake Wolfgang. Financial Crisis and the World War: With the financial crisis in the 30s the good years have ended. The “Deutsches Reich” implemented the “Tausend-Mark Mark-Sperre” which led to a plunge in the tourism economy. ec Within the Anschluss on the German Empire 1938 the Verkehrsbüro was incorporated into the “Mitteleuropäischen Mitteleuropäischen Reisebüro”. Reisebüro New Start: After the Second World War the Verkehrsbüro was re-established. re established. The company offered at the first travel agency travels ls to China, Japan and India. In the early 80s the Verkehrsbüro kehrsbüro had to face again a huge crisis and enormous losses. After a few years the company was refurbished and well-established well established on the market. The Company today: In the second half of the 90s the Verkehrsbüro Verkehrsbüro Group evolved to the largest tourism fullfull service-provider provider in Austria. Many important tourism companies like the IncomingIncoming organisation Eurotours, many hotels and even camping grounds were integrated into the concern. Because of strategically reasons the concern broke up per 1.1.2008 with the culinary-branch branch and concentrates just on the core business tourism and hotel business. Since the 1.1.2009 the Verkehrsbüro Company has implemented a one-brand brand strategy for their travel agencies along with Ruefa. iii.

Concern Structure:

The Österreichische Verkehrsbüro AG is quoted on the stock exchange: Owners: AVZ Holding GmbH Wiener Städtische Allgemeine Versicherung AG Toth Privatstiftung

60, 98% 31, 58% 7, 44%

Managing Board: General Manager Mag. Harald Nograsek Nogra Board President Mag. Norbert Draskovits Board President Martin Bachlechner 24 | P a g e

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iv.

2009

Core Business26

Hotel Business: Austria Trend Hotels & Resorts – leading domestic Hotel chain • 29 Hotels and about 8600 beds in the year 2007 • Main area 4-star star hotel business and city tourism • Focus on meetings, incentives, conventions and events • dynamic expansion in Austria and CEE area Motel One – Low-budget-design design hotels • Joint venture with the German Motel one AG • unique concept of design hotels in the low-budget low segment • first motel otel one in Vienna Tourism Business: Travel agency – largest store network in Austria • number 1 in retail segment with 20 % market share • 145 stores of the brands brand “Verkehrsbüro Reisen”, „Ruefa Reisen“ und „Billige Reisen“ • Multi-channel channel distribution via Internet I and Call centres Tour operator – successful specialspecial and niche positioning • one-brand brand strategy of “Verkehrsbüro Reisen” and “Ruefa Reisen” • positioning as a quality provider for individual travels • focus on studies travel, adventure travel, cultureculture and bathing travel, city travel, cruise travel and sportsport and active travel • first provider of Fair-trade trade travels Eurotours International – largest Incoming agency in Middle Europe • Specialist for ski holidays • over 900.000 passengers per year • number 2 of thee tour operators in Austria • successful direct distribution of “Hofer Reisen” Business travels – market leader in Austria • eight business travel centres for the th best customer proximity • 24-hours service line • VIP-lounges lounges as an exclusive travel service

26

ref. (Österreichisches Verkehrsbüro AG, 2008, pp. 2-4) 2

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Conference management – one of the leading providers • successful brand “Austria Interconvention” • about 50 national and international conferences per year • pioneer in IT-solutions

Figure 11: Core business of the Verkehrsbüro Group

v.

Guiding principles27:

Customer proximity Highest quality Team spirit Paragons Target orientation

27

The customer is the centre of all business activities With friendliness, outgoingness and high amount of competence we exceeding the expectations of our customers We communicate with respect and honesty. Hence we can fulfil our tasks with joy and enthusiasm. Our executives are our paragons in team play, customer orientation and in business actions We reaching our targets with clear standards, open communication and support of all employees

ref. (Österreichisches Verkehrsbüro AG, 2008, p. 11)

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Customer Relationship Management in the traffic business Innovation and Service Growth

2009

The success of our company based on innovations, flexibility and surpassing commitment of all employees We’re aiming to increase our national and international growth and we want to be proud of our company

As you can see, all company principles are customer-oriented and targeted onto the customer.

Business strategy28:

vi.

Business travel: • • •

continued growth through the expansion of the market leadership full service provider/consulting and outsourcing access into the CEE-market

Leisure: • • •

implementation of alternative distribution channels – Online distribution, direct distribution via trade partners (Multi-Channel distribution) Flagship-stores in centres concentration on niches in the operator segment

Eurotours International: • •

new markets – especially CEE increase of online-activities

Hotel business: • • • • • •

28

leading position at the MICE-segment (Meetings, incentives, conventions, events) concentration on city hotels focus on 4-star category continued growth of the hotel portfolio and number of beds expansion to the CEE market Motel One as a position in the low-budget segment

ref. (Österreichisches Verkehrsbüro AG, 2008, pp. 20-30)

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b. Strategy and Implementation of CRM in the Verkehrsbüro Group29 The slogan “Your smile is our job” and the business principles are indicators, that the CRM philosophy is well integrated in the business strategy of the Verkehrsbüro Group. However, these simple slogans are not just marketing slogans, the CRM philosophy is well implemented in the business processes of the Verkehrsbüro Group. In the next chapter I am going to explain how the CRM-tasks are implemented in the Verkehrsbüro group and I will give an overview of the CRM-Software “Jack”. Prospect and new customer Management Targeted multi-channel distribution at the travel agencies: In order to attract prospects, the Verkehrsbüro group has optimized their access to their products in the “Ruefa Reisen” and “Verkehrsbüro Reisen” travel agencies:
Stores are the most important distribution-channel for the Verkehrsbüro. Last year all stores were modernised and reorganised to Travel – Service – Centres. One of the new stores at the “Wiener Opernring” attracts new customers on the streets via flat screens by showing the latest holiday offers. In summer 2008 a new flagship-store has opened its doors in Graz with an integrated library and innovative flat screens.
To strengthen the online distribution the Verkehrsbüro has updated their Websites with new booking tools in order to be more customers friendly. The online services are additional to the store service very important as an information channel for prospects.
“Bistro Portal”: This IT-solution in all stores of the group helps the customer to find the right offer according to his needs with the highest quality of service. Video clips supporting the customer to find the right decision.
Another distribution channel for the Verkehrsbüro are discounters. Last year, the company have won about 44.000 new customers at the SPAR discounters. There is also a successful cooperation with “Hofer Reisen”.
The company is also specialised on the sale of ÖBB-train tickets and ferry tickets for private- and business clients with a special centre at the Kärntner Ring. Tour operator “Verkehrsbüro-Ruefa Reisen”: Packages in cooperation with Fair-trade
With the help of “Fairtrade” the Verkehrsbüro is now able to offer sustainable travels. Customers with the desire of environmental- and society friendly holidays are won as new customers.

29

ref. (Sussitz, 2009)

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Major Customer Event: Verkehrsbüro Reisemesse at the Casineum in Velden
All tour operators, which are included in the program of the Verkehrsbüro Reisen (Gulet, Neckermann, Dertur...) participating on this event. They present new innovations and the customer gets information first hand.
Aviators, travel insurance companies and rental car companies like the AUA, Uniqua and AVIS also presenting their services at the “Verkehrsbüro Reisemesse”.
Parts of the program are presentations, lotteries, dance and music shows from foreign countries and much information for prospects or present customers. Advertising in the media:
TV and Radio spots of the Ruefa – “Wo Träume war werden”
advertisements in Newspapers

Satisfaction- and Retention management The Verkehrsbüro provides a wide range of services for the customer in order to treat him as well as possible: Events at the stores:
Presentations about different holiday destinations for present customers
Customer events like a Christmas punch, New Years Eve Champagne, at Easter the customer get eggs in the stores
all customers are invited personally via E-mail Customer Retention due to the service:
Every travel agency in Austria sells the same product to the same price. The quality, service, competence, flexibility, outgoingness and friendliness of the employees make the difference!
the customer retains if the service quality is very high
every employee is high skilled and trained
the company provides advanced education for every sales person: dealing with customers, analysis of requirements, dealing with complains and other important social skills
Education for special requirements: destinations, products, catalogues of the tour operators
“Agenttouren”: Tour operators inviting employees of travel agencies to participate on a travel to a new destination

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Information about news:
Registered Customers getting ge information via Newsletter, E-mail mail or posting about new packages and offers
The company aims to retain customers even when he just wants to pick up a catalogue: the sales person tries to find out information about the customer like EE mail address and to make a good impression in order that the customer comes back to make a booking. Special services:
Customers, which picking up their travel documents, receiving a small “travel bag” (little box with the shape of a travel bag with different types of goodies goodi like chewing gums, beverages, maps...)
some so called “star Customers” with a high present value and a high potential are sometimes so called “Testing travels”: The customer can participate to a travel to a new destination for free and after that he makes makes a verdict about the travel Customer Satisfaction:
24-hours hours Call centre service for business customers before the booking and during the travel
Call- back service on the website
The Verkehrsbüro invites the customer after his trip to a personal conversation convers where ere he can rate the hotel quality, his satisfaction with the trip, name na lacks and defects, he can talk about his interests and improvements for the next trip.

Figure 12: Call-back-Service Service of the Verkehrsbüro Group

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Customer Relationship Management in the traffic business

c. Technical CRMCRM-component: component: The Customer Relationship Management can only work efficient, efficient, if the management uses and receives the right customer information from the technical component of o the CRM. When a company has to choose the right CRM computer Software, Software, the company has to keep in mind that the software has to fit the requirementss of the company. It is very helpful, to be clear what services the software has to provide and what expectations have to be fulfilled. However, a wide range of CRM software is available on the market, suitable for every kind of branch. The most frequently used CRM software is mySAP, provided by the SAP concern. This software is very often used in the bank and insurance business. i.

Software “Jack”30

The Verkehrsbüro Group usess in the whole company the same software solution, Jack provided by the Bewotec Gmbh.. The software is a solution for the Front-, Front mid- and back office of the company and combines all necessary tools for the company: • CRS tasks • Customer data • Analysis, statistics and lists • Financial accountancy • Marketing campaigns Overview of the basic functions ions of Jack: Client booking and search: Customer data is collected in the software and you can search after a few types of criteria: • Name • Street • Post code • City • Pre-defined defined Type of Clients • Phone or Fax Number • Email Address • Client Number In addition, to the customer‘s personal data, you can search after other criteria like: • • • • • • 30

Booking number Ticket number Invoice number Booking Date Service Provider reference number Departure Date

Figure 13: Client and booking search

ref. (Bewotec GmbH, 2009)

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Statistics and analysis: The collected customer data can be analysed by the program and the software provides you information about the customer status: • Frequent flyers • Customer history • Backlogged orders The analysis can also show how customer attributes like: • Types ypes of holiday: city, bathing, wellness, cruises, diving, golf and so on • Preferred booking tool: internet platform, travel agency... • Types of transport: plane, train, t cruise... • Preferred referred destinations • Preferred referred tour operator By using this data, a customer portfolio for every client can be produced and used for future marketing campaigns. The advantage for the Verkehrsbüro is that every employee has access to the collected customer data and so not every customer has to explain his personal data and needs. In fact, that is very convenient for the customer! Rectification of rejects:31 The software is also very important to rework a travel.. Within this software there is the possibility to remember the travel agent when the client returns. Now, the travel agent has the possibility to invite the customer to a conversation. The customer has the possibility to give a feedback and to speak about several points like: • Hotel rating Figure 14: Chart of service providers • Satisfaction • Lacks • Interests • Recommendations ecommendations for the next holiday The results of the conversations can be collected in the software.

31

ref. (Sussitz, 2009)

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Marketing campaigns: With this software direct marketing is possible for your target group. It is possible to set up criteria for a marketing campaign fitted on your target group. For instance: • • •

All customers which haven’t booked this year Golfer or active persons want to spend more than 2000 € for a travel

A text processing tool is also integrated in the software. Additional services: SMS-Service: The Software provides a text messaging tool and for instance it is possible to wish your customers a pleasant journey. The SMS will be sent on a defined date with the suitable context. Bonus points and vouchers: Another service of the software is the automatically allocation of bonus points. The customer receives bonus points if he booked several times or paid over a certain amount of money. The Software counts automatically the bonus points and sends vouchers to the customers.

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V. Conclusion As you can see, CRM is a very complex and thrilling topic. However, the Verkehrsbüro Group case study shows a few examples how the CRM philosophy can be perfectly implemented in a traffic and tourism company. In future, we will see if the CRM philosophy really leads to market advantages in times of economical decline. Nevertheless, after I’ve done research for my skilled work, I found out that there is much literature about CRM in general, but nearly nothing specified for the traffic and tourism business. The topic is also very complex and requires advanced business knowledge, so the work wasn’t always very easy for me. After all, I think I gained a good knowledge about CRM and the topic is still very interesting for me. In addition, I have to say thank you to Mrs. Andrea Sussitz from the Verkehrsbüro Group for her information about the company, to my teacher Mag. Sonja Schusteritsch for her support and to Mathias Berger.

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VI. Appendix

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VII. List of literature Bliemel, F., & Eggert, A. (1998). Kundenbindung: Die neue Sollstrategie? Marketing-ZFP , 1, pp. 3745. Brasch, C.-M., Köder, K., & Rapp, R. (2007). Praxishandbuch Kundenmanagement. Weinheim: WILEYVCH. Diller, H. (2002). Probleme des Kundenwertes als Steuerungsgröße im Kundenmanagement. In H. Böhler, Marketing-Management und Unternehmensführung (pp. 297326). Stuttgart: Gabler. Elsennweger, T. (2004, Oktober). Ziele von CRM - Strategisches CRM zur Steigerung des Kundenwertes. Retrieved Februar 11, 2009, from Loyaltix Consulting: www.loyaltix.at/users/loyaltix/monitor10_04.pdf Fried, D. (2004). Dr. Fried & Partner. Retrieved Jänner 8, 2009, from Fernstudie CRM: http://www.fried-partner.de/media/04_CRM.pdf Gerstl, S. (2008). Special Innovation - Jeder Kundenkontakt zählt. Retrieved November 18, 2008, from economy Austria: http://economyaustria.at/zeitung Grönroos, C. (2000). Service Management and Marketing - A Customer Relationship Management Approach (2 ed.). Chichester: Wiley. Gruber, A. (2009, Januar). Geschenke für die Treue. bulletin , pp. 12-15. Helm, S., & Günter, B. (2001). Kundenwert - eine Einführung in die theoretischen und praktischen Herausforderungen der Bewertung von Kundenbeziehungen. In B. Günter, & S. Helm, Kundenwert (pp. 3-35). Wiesbaden: Gabler. Hippner, H., & Wilde, H. D. (2007). Grundlagen des CRM - Konzepte und Gestaltung. Wiesbaden: Gabler. Hippner, H., & Wilde, K. (2003). Customer Relationship Management - Strategie und Realisierung. In R. Teichmann, Customer und Relationship Management (pp. 3-52). Berlin. Hoffmann, A., & Pfeiffe, M. (2002, Juni). Kundenbeziehungsmanagement (CRM) in der Reiseindustrie. Retrieved Februar 11, 2009, from Trends und Studienergebnisse: www.05.ibm.com/de/distribution/IBM_UBG_CRM_Studie_Reisebranche .pdf Homburg, C., & Bruhn, M. (2005). Kundenbindungsmanagement - Eine Einführung in die theoretischen und praktischen Problemstellungen. In M. Bruhn, & C. Homburg, Handbuch Kundenbindungsmanagement (pp. 3-37). Wiesbaden: Gabler. 37 | P a g e

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Customer Relationship Management in the traffic business Lancaster, G., & Reynolds, P. (2002). Marketing - The one semester Introduction. Bodmin: Butterworth & Heinemann.

Österreichisches Verkehrsbüro AG. (2008, Mai). Geschäftsbericht 07. Retrieved Februar 12, 2009, from www.verkehrsbuero.at Pressey, A., & Mathews, B. (2000). Barriers to relationship marketing in consumer retailing. Journal of Services Marketing , 14 (3), pp. 272-286. Statistik Austria. (2008). Urlaubs und Geschäftsreisen. Sussitz, A. (2009). CRM in the Verkehrsbüro Group. (D. Leitner, Interviewer) Verkehrsbüro Group. (2009). Retrieved Februar 12, 2009, from http://www.verkehrsbuero.com/index.asp?b=T Weiber, R., & Weber, M. (2000). Customer Lifetime Value als Entscheidungsgröße im Customer Relationship Marketing. In R. Weiber, & M. Weber, Handbuch Electronic Business. Wiesbaden.

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VIII. Table of Figures Figure 1: Chronological development of the Relationship Management................................................................ 6 Figure 2: Distinction between the terms ................................................................................................................. 8 Figure 3: CRM in the Customer life cycle ................................................................................................................. 9 Figure 4: Potentials of the Customer value ........................................................................................................... 10 Figure 5: Tasks of CRM in the Phases of the Customer Relationship Cycle ........................................................... 12 Figure 6: Core competences in the CRM process................................................................................................... 13 Figure 7: Functional Chain of CRM ........................................................................................................................ 15 Figure 8: Motivations for Travelling 2007 ............................................................................................................. 18 Figure 9: Customer Portfolio ................................................................................................................................. 19 Figure 10: Customer Related Service in the Phases of the Customer Process ....................................................... 21 Figure 11: Core business of the Verkehrsbüro Group ............................................................................................ 26 Figure 12: Call-back-Service of the Verkehrsbüro Group....................................................................................... 30 Figure 13: Client and booking search .................................................................................................................... 31 Figure 14: Chart of service providers ..................................................................................................................... 32

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