PwC Releases Flyer-Focused, Values-Based “Customer Experience” Roadmap to Help U.S. Airlines Drive Revenue Growth and Customer Satisfaction

“Experience Radar” Identifies Six “Experience Enhancers”

To Help Airlines Deliver Exceptional Customer Service

NEW YORK, February 21, 2012 ― Airlines that adopt a flyer-focused ‘values-based’ approach—coupled with a ‘quantitative DNA’ that examines experiences with an economic filter—can provide brand-defining travel experiences that can result in higher satisfaction, lower customer churn, expanded market share, and revenue growth drivers, according to PwC’s Experience Radar 2012: Customer Insights for the US Airline Industry. The report, based on the firm’s Experience Radar methodology, includes input from more than 6,000 U.S. consumers across 11 industries.

According to PwC, airline flyers, both leisure and business travelers, are well-connected to powerful social networks and digital purchasing agents, and are seeking information transparency with personalized experiences that can dynamically shift with their needs.

“As cost management becomes less of a differentiator for airlines, carriers are seeking to create a competitive advantage by strengthening ties to consumers through an improved customer experience,” said Jonathan Kletzel, U.S. transportation and logistics advisory leader at PwC.  “Airlines that have a crystal-clear understanding of what flyers want, need and value most can be better positioned in the market, and can achieve a higher price premium.”

Identifying customer perceived value vs. company realized value

Unlike traditional market segmentation, PwC’s Experience Segments define categories for leisure and business flyers based on the features that they value most, along with their demographics and behavioral profiles.  Once the segments are identified, Experience Radar ranks the flying features by relative importance to air travelers as well as the potential economic impact for carriers:

• Aces: This category includes “nice-to-have” features for flyers that also deliver moderate to high economic returns (e.g. seat comfort falls within this category in PwC’s study).
• Table Stakes: These are features deemed “must-have” from flyers while providing low economic returns for airlines (e.g. on-time arrivals fit here in PwC’s study).
• Wild Cards: This segment includes features with high economic returns (e.g. issue resolution, upgrade options).
• Fold: These are features that produce little impact on company margins and rank low in value (e.g. additional fees and flight delays fall here in PwC’s study).

PwC’s methodology helps carriers translate the findings into a tangible action plan to create value for flyers and, in turn, can help grow top-line revenues.  “Experience Radar captures the true consumer experience and identifies what matters most to them,” said Paul D’Alessandro, global Customer Impact practice leader for PwC.  “Our rigorous study helps airlines and other consumer-oriented businesses develop an execution plan to ensure excellent customer experiences.”

Experience Enhancers

To provide a “customer experience” roadmap for airlines, PwC identifies six ‘Experience Enhancers’ for airlines – practical actions designed to build and grow airlines’ businesses by delivering exceptional customer service.  Examples of ‘Experience Enhancers’ include:

• Don’t nickel-and-dime: PwC found that 65 percent of leisure travelers value all inclusive over a la carte options.  Ancillary fees may bring in revenue but can also drive out customers.  Airlines should simplify by offering all-inclusive fares and generate revenue with valuable add-ons, which can help enhance the travel experience.
• Offer perks and rewards that make a difference: Business travelers seek convenience from status.  Airlines should structure experiential benefits (e.g. rewards programs, credit cards, etc.) to tempt business travelers with the basics to make travel hassle-free— such as priority boarding, priority standby, upgrade priority, rebooking priority and extra leg room.  Eighteen percent of premium business travelers are willing to pay for priority boarding and seating.
• Create brand ambassadors: Two out of 10 never forget a bad leisure travel experience and continuously tell others about it. Get passengers talking about their good experiences by amplifying their positive travel encounters via brand advocates. Additionally, monitor social media to engage and respond to customer issues before travelers vote with their wallets and leave.

For more information and to download an electronic copy of Experience Radar 2012: Customer Insights for the US airline industry, visit http://www.pwc.com/us/en/advisory/customer-impact/publications/experience-radar2012-us-airlines.jhtml.

About PwC’s Global Transportation & Logistics Practice

PwC’s Transportation and Logistics practice is composed of a global network of industry professionals who provide assurance, tax, and advisory services to public and private transportation and logistics companies around the world. We bring experience, international industry leading practices, and a wealth of specialized resources to help solve business issues.

About PwC’s Industrial Products practice

PwC’s Industrial Products (IP) practice provides financial, operational, and strategic services to global organizations across the aerospace & defense (A&D), business services, chemicals, engineering & construction (E&C), forest, paper, & packaging (FPP), industrial manufacturing, metals, and transportation & logistics (T&L) industries. For more information please visit: www.pwc.com/us/en/industrial-products

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