Singapore Airlines, A Great Way To Fly

The success of an intangible service, relies heavily on its ability to make  an emotional bond with its customers.  Each moment of truth creates an experience that enhances the relationship and brings about loyalty in the customers. Singapore Airlines (SIA), the world’s second largest airline based on market capitalisation, has been successful in delivering an excellent service and in creating an exceptional experience for its customers throughout their journeys. 

SIA has successfully maximised its shareholders value by leveraging its relationships with employees and customers. A continuous innovation in enhancing employees competencies, product and service design are the key drivers. Motivated and happy employees will provide exemplary services to customers, which will subsequently lead to increased customer loyalty and market share. Furthermore, the direct and indirect by-products of customer retention and increased market share are spear-heading operational costs and higher profit. The high profitability allows SIA to reward its employees and to develop a consistent innovation in terms of technology and trainings for the employees, and subsequently it reinforces SIA’s strong position in the airlines industry.

SIA engrosses heavily on recruiting and retaining the best people in the industry. SIA’s applicants have to go through a rigorous recruitment process, that involves three-rounds of interviews, functional skill and soft skill tests, which help the company to identify candidates who chime in well with the customer-centric company culture. Annually, SIA hires 500-600 new flight attendants from 16,000 applicants. SIA’s employees are required to complete a four months training in order to serve a customer, nearly twice as long as the industry average. Moreover, SIA’s pilots are required to attend frontline staff training to fully understand the customer’s needs.

SIA, as a luxury airline, has been successfully managed its relationship with the customers by identifying the right customers, keeping track of customer lifestyle, and fulfilling customer’s high expectations with a personal approach. SIA’s value propositions rely on two main pillars; continuous innovation and service excellence. SIA’s continuous innovation is based on its extensive customer feedback process. Customer information is gathered from surveys, staff input, call center, social media and database, this information is then compared with competitor information from benchmarking surveys (IATA and Global Performance Survey) and ‘spy flight’. Consequently, SIA has managed to be not only be the pioneer of many products and services throughout the airlines history. But also, to be the first airlines that uses new aircraft models, such as Airbus A-380, Boeing 777, and Boeing 747 jumbo jets.

Moreover, SIA has comprehended that treating customers as human beings, rather than just a sales point is the main driver in delivering an excellent experience for the customers. Its goal is to be the best company not only in the airlines industry, but also in the entire service sector. SIA’s flight attendants have been trained to anticipate and fulfill the customer needs. They have been trained not only to follow a set of rules, but also to be flexible, to some extent, in fulfilling those needs, especially for the premium classes where service is more personalised.

In order to maintain customer satisfaction and credibility, SIA has developed an elaborate system to handle customer complaints and compliments. A factual example was when a customer complained about her broken in-flight entertainment, the flight attendants manager proposed a USD70 voucher for in-flight shopping to maintain her satisfaction of SIA’s service.  Furthermore, for more than 39 years, SIA has been able to sustain its safety record with two fatal accidents and one hijack related accident.

Nevertheless, SIA’s reputation has created a high expectation among its customers, and subsequently it will jeopardise the relationship because customer will easily be dissatisfied. Another issue would be in identifying the real value of customers and in building relationships with the right customers. Loyalty programs are not sufficient enough since many valuable customers prefer not to register in any frequent flyer schemes.  Furthermore, a decreasing switching cost in the airlines industry has lowered customer loyalty this in turn will prevent SIA to build a long term relationship with its customers in a less costly way.

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Posted on March 17, 2012, in Analysis, CRM, Emerging Markets, Indonesia, Marketing, Strategy and tagged , , , , . Bookmark the permalink. Leave a comment.

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