What is customer recovery? It’s the airline credit you receive for a bad experience (for example, a lost bag). This credit is the salve that is supposed to neutralize the negative experience and bring you back for future business. Yet, customer recovery is treated as an operational concern, where the focus is on controlling the issuance and redemption of credit, at the expense of recovering the customer.
The customer recovery process is mostly managed offline, via the call center, as ’another’ customer service function. Issuing a service credit can take up to 1-2 minutes, and walking a customer through redemption of a credit can be as high as 20-30 minutes. At a generous $2 a minute call center cost rate, that’s $60 cost per recovery voucher. The operational costs of recovery are quickly becoming an operation focus to manage down. Which impacts the opportunity to recover the customer.
Consumers who have had these credit issued and have tried to redeem know the pain. The process is complex, difficult and typically leads to frustration and abandonment. If you can redeem a credit for a new ticket you will find that the ticket itself is a fragile thing, best not to test it with any successive changes as it’s not like other bookings. It’s non-refundable, non-transferable and plain old nonsensical as a customer recovery vehicle.
We think there is a better way to treat recovery, requiring the airline to focus on the recovery mechanism as a new channel to market, as a vehicle to drive repeat business, to get the consumer to fly one more time and give the airline a second chance at winning their loyalty.
We’ve developed new capability for our airline customers in promotion and credit management that can be applied here. Let’s treat customer recovery as a ‘value voucher’, where the consumer derives tangible benefit and we manage it as a sales campaign.
The recover credits/ value vouchers can be automated in the same way the airline automates calls-to-action for fare promotions: “Hey, we are sorry you had a bad experience on your last trip and we want to make it better. Here’s a $20 voucher off your next trip, book by the end of June to enjoy this offer.”
The value vouchers are treated as forms of payment credits, so can easily be applied to any booking. We don’t want to limit or restrict usage, we want to drive new bookings and drive recovery.
The airline can now start to build campaigns around each customer recovery type, monitoring the conversion funnel for lost bag vouchers, delayed flight credits and using their new digital marketing capabilities to tune the vouchers to drive greater conversion.
So what does the future of customer recovery look like? We see it transforming from an operational process to a valuable new channel to market, where the airline can engage the consumer and potentially delight and drive loyalty through service.
The adoption of a flexible currency mechanism develops the concept of the customer’s airline wallet. As a consumer, knowing I have $20 in easily redeemable credit at an airline has greater impact on my choice to travel than trying to win against every other airline in a fare shopping display.
Product Line Manager at Datalex
Vice President of Product and General Manager of Datalex Americas