American University Of Science And Technology (AUST)

Faculty of Business and Economics

Graduate Program
Name: Nadine Talih
Course: MKT 545
Professor: Dr. Elie Dib
Case study: We have got a huge success in our hands

1- If you were a member of the CRM Award jury, what would be the reasons for
you to choose KLM as the winning company of this global award?
The case is about KLM Flying Dutchman which implemented CRM in order to
improve the companys revenues and better please their customers. KLM CRM
director Cristina Zanchi maximized their revenues per customer by utilizing the
customer insight to augment their service. They wanted to interact with the
customer and enhance the customer experience.
If I were a member of the award jury I would have chosen KLM for many reasons.
The essential reason is that the KLM were the pioneers to implement CRM in their
company and for the clear vision that they had. KLMs CRM vision is to make every
interaction with customers an opportunity to enhance their buying and traveling
experience. This increased and sustained the airlines profitability through higher
repurchasing rates and lower relative spend on marketing. To support this vision,
KLM has established an integrated CRM process that embraces its entire consumer,
corporate and travel trade customers, to promote one view of the consumer. This
enables multi-channel, personalized one-to-one interactions with each customer at
each point of contact. KLMs CRM program is being implemented in a phased
approach.
Another reason for the choice KLM is the clear strategy used for the CRM. They first
started by identifying their customers, respond to their needs and then set
measurable targets and control. The process that was used for CRM is another good
reason for the choice of KLM as the award winner, this process started from

marketing as customers increasingly manage their own transactions, KLMs focus is

on personalized marketing and value-based segmentation, rather than just the
traditional Four Ps (product, price, placement and promotion). In addition, they
Increased encouragement of direct and online sales. And last, is taking the
complaints into account and try to solve these problems complaints data and postflight information to determine potential customer churn more accurately.
The continuous implementation of CRM is fundamental in this company which
shows that Mrs. Zanchi is willing to continue to reach her goal. And this is
manifested by the KLMs process transformation which is supported by education
and training for employees. KLM has held a number of CRM master classes for
middle managers, and every training program for front-line staff must incorporate
the CRM dimension.
2- Where do you criticize KLMs CRM approach?
The golden rule of KLMs CRM strategy is to make return on investment visible. To
support this, KLM has established a Customer Scorecard, containing a set of key
performance indicators for the entire CRM program. Although this system was
implemented and the company won the Gartner award but still there is some weak
point where the CRM program can be criticized. Based on the CRM 4 elements, the
plan for the customer knowledge is well set up and this can be identified in the text.
However, the communication strategy is not very clear even if they found a
increase in the percentage of clients, but the company will look at the complaints
send by the customers, and this will lead to a loose for a part of the customer on a
long period of time especially that we now that around 68% of customers will leave
without giving you any opinion and without telling you why they are leaving, so the
communication strategy applied shows only the tip of the iceberg.
As per the communication tools, the KLM will send an e-mail for the new customer
who did not fly with them for one month with opportunities. The problem in this
approach that the KLM is only aiming at their customers and looking to have new
customers into their CRM system and the way used is only by e-mail which might be
insufficient for the communication between the customer and the company.
On the other I could not identify any information related to the 4 th element which is
the individual approach where we can see that the CRM has two categories: new
customers and old ones. They did not talk about any customization of the CRM.

3- What are the major risks for KLMs CRM future

KLMs success with CRM has confirmed the airlines determination to overcome
several substantial obstacles: KLM is very product- and operations-driven, which
further complicates complex initiatives like CRM. It is often difficult to change
existing technical and organizational structures. IT and business managers joined
forces to overcome this difficulty. Getting IT and business to think as one can be a
struggle. KLM has learned that business, not IT, should lead customer relationship
projects, but IT is a key enabler of CRM success.
KLMs IT network infrastructure varies substantially from region to region, and this is
considered as a threat since there will be no standards in communication with the
customers. Marketers in certain areas of the world had trouble getting good
performance from CRM applications, given the available network bandwidth. This
was solved by upgrading certain parts of the network, and using file compression.
KLMs IT infrastructure is complex. This makes it difficult to implement certain
required patches, or updates to standard software components.
An additional threat is the low cost companies, which is considered as a real
competitor in terms of market share nevertheless most of these companies do not
concentrate their efforts on CRM.