Customer Relationship Management Assignment: Case Analysis of Emirates Airlines

Question

Task: Customer Relationship Management Assignment Task:
Submit a 3500-word company/organization report or case study analysis to demonstrate an understanding of CRM within a particular company/organization and applying appropriate CRM management theory

The purpose of the report will be to evaluate client relationship management theory evidenced in the company/organization.

The final report must cover, at a minimum, the following points:
1) Present an analysis of the company/organization being studied, including:
A) Organizational history
B) Organization structure and its fit with external environment
C) Management structure and its fit with internal environment

2) Describe and critically analyze the predominant client relationship management approaches used in the company/organization

3) Identify any key setbacks in connection to customer management that the organization is experiencing internally and externally

4) Recommend appropriate approaches that might enhance client relationship management practices and processes using appropriate theory to support and critique recommendations.

Answer

1. Introduction
The chosen company for the assignment is Emirates Airways and the key purpose of the paper is to evaluate the business operation of the chosen airline company and on the strategies used by them for consumer relationship management. For this evaluation, the paper will start with a discussion on the company background followed by the external as well as internal environmental analysis that affects the company. The paper will then focus on the pre-dominant CRM approaches used by the firm. Lastly, the paper will be highlighting the key setbacks of the company along with the recommendations that would help the firm to grow its business furthermore.

2. Company Background
Emirates Airlines is international aviation based in Dubai holding headquarters in Garhoud, Dubai, United Arab Emirates nearby Dubai Internal Airport. This airline includes data, which is a service provided by an aviation company with ground services at 126 airports and airlines. Emirates is one of the largest international airlines across the middle-east that flies to over 150 destinations across 6 continents. It operates with a fleet of aircraft of above 250 width-bodied. The airline operates more than 170 aircraft on order with a value of US$58 billion. The business operation of Emirates involves a turnover of aboutUS$28.3 billion in revenue annually with more than one lakh employees across its entire business units and associated firms. As such, Emirates Airline is said to be one of the biggest employers in the Middle East (Nataraja, 2010).

Additionally, the airline is fully possessed by the Dubai Government on a direct basis under the Investment Corporation of Dubai and as a portion of Dubai Inc. As per the history of the airline, it can be said that Emirates was considered among the fastest growing airlines in the world by early 1990s as the annual income turnover was approximately $100 million. As of now, comparing the history of the company with the present situation of the company, it can be said that the airline has achieved growth massively over the world (Muthuseshan, 2020).

However, CRM stands for “Customer Relationship Management” that refers to the interaction with consumers goes smoothly and efficiently to assure an augmentation of the overall profits. This software collects consumer data from multiple channels. However, the Emirates airwayshas been using one of the bets CRM procedures as compared to that of other airways.

3. External Environment Affecting Emirates CRM
3.1 COVID 19
Due to the outbreak of the COVID 19, the aviation industries have been adversely affected all over the world. However, it has been identified that there are 12.6bn dirhams ($3.4bn) lossoccurred in Emirates airline within six months as compared to the profit made by the company a year ago. During the pandemic, the number of passengers slowed down by 95pc to 1.5mn, and the overall capacity was reduced by 67pc to 9.8bn as per the measurement. The capacity measured in available seat kilometres (ATK) declined by 91 pc year after year and the passenger traffic carried was declined by 96 pc. Therefore, these outcomes of the measurement indicate that the company of Emirates had to face immense loss during COVID 19 pandemic. Being one of the largest airlines in the world, Emirates had refunded the customers of about $1.4billion as global travel declined all of a sudden because of the virus. As such, the airways has been able to use the CRM more proficiently even during the pandemic and the company gave its best to retain their customers as much as possible.(Alqasemi, et al., 2021).

3.2 Customer Demand Downfall
During the COVID 19 outbreak, Emirates Airlines had to face downfall in every aspect of the business among which the central part was a downfall in the customer demand. Customer demand was the core part of the success of Emirates throughout its financial year until the year 2020. As per the analysis of revenue passenger kilometres (RPKs), it can be assumed that the customer demand downfall has occurred in the company at an immense level of about 38.6%. It is because the pandemic of COVID 19 has led people to cut down their travelling habits as well as emergencies. On an overall basis, the company carried 1.5 million passengers between 1 April and 30 September 2020, which indicates a downfall of 95% as compared to that of the previous financial years. Hence, it can be said that in terms of CRM, Emirates airways gave their best service considering all the precautionary measures that was supposed to beundertakenin order to stay safe from the virus (Suau-Sanchez, Voltes-Dorta, and Cugueró-Escofet, 2020).

3.3 Digital-Age Customer
Digital Age has transformed the ways of shopping behaviour of the customers and sharing their experiences. Aviation industries are diving into contactless service and giving importance to service delivery and creating contactless relationships with their customers with the power of digital platforms. Thus, Emirates Airlines has become one of the first aviation industry around the world to trial IATA Travel Pass, a digital platform for COVID 19 updates and test verification. With the help of the digital platform, the company has been helping their customers to mage their travel safely as well as easily amid the outbreak of the virus.

As the CRM practice, from providing tickets to the boarding pass, the airline has been providing the best service to their customers with the help of digital methods. The company is making use of social media platforms as a way to deal with complaints by updating flight situations and queries in a better way in order to manage its business operation of the company (ALZAHMI, 2020).

3.4 Cyber Threats
Cyber threat refers to a mischievous activity that looks for damaging data, steals data, or disturbs digital life in general. In a business world, it mainly occurs to those companies that are deeply involved in the digital business. Hence, Emirates Airlines is considered to be one of the largest airlines with great involvement in the digital world in order to provide the best service to their customer. In this airline, the cyber threat takes place as a risk to the company. Such threats could result in disclosure of the confidentiality of the consumer database and other service system interruptions because of which the company can lose its reputation and goodwill at the same time. With the help of CRM activities, as of now, since the company is fully involved in digital business amid the pandemic, Emirates airlines has been warning their customers officially about the cybercrimes that would attack them. Therefore, the company makes their customers aware of the fake websites of the company created by the criminals and not to reply or contact that website and use only the official website.

4. Internal environment affecting Emirates Airlines’ CRM
4.1 Integration of customer service with the core values
In today’s business world, it has become important to align the core values of an organization with customer services and needs. Being an aviation company, Emirates Airlines indulges in several aspects of managing the internal environment for ensuring better CRM, but certain strategies tend to fail as well in regards to CRM (Sky Journeys, 2015). Emirates loyalty service Skywards is the company’s CRM strategy and it is an award winning frequent flyer program that is operated by Emirates. The company follows some specific core values in terms of ensuring better business operation and they are: Customer satisfaction: Emirates Airline tends to anticipate the exact demands and needs of the customers based on thorough evaluation so that is possible to operate as a customer-focused company (Sky Journeys, 2015).

Emotional attachment: Emirates Airlines considers the emotional bonds and ties as prime factors for being on the priority list of the customers (Sky Journeys, 2015). The company demonstrates its emotions and character advertisement campaigns, video investment and air hostesses by using these as a mediator between the customer and the company.

Community engagement: This is a pivotal factor that has increased the brand awareness of Emirates Airlines among the customers (Sky Journeys, 2015). The CRM activities of Emirates tend to anticipate the measures that can ensure potential improvement of the company’s community engagement. Activities such as presence in social media, charity, sponsorships, donations campaigns, celebrity endorsement and partnerships have significantly increased the brand awareness of Emirates Airlines among customers around the world.

Responsibility: Emirates Airlines puts great values on social responsibility and corporate citizenship by making its internal business operation align to ethical responsibilities such as reducing environmental pollution and investment in the protection of the environment (Sky Journeys, 2015).

4.2 Growing competition in the airlines or aviation industry
The airline's industry can be characterized as an oligopoly market structure that indicates a form of imperfect competition where a limited number of companies dominate the industry (Rubin and Joy, 2015). Emirates have been facing intense competition from Ethiad Airways, Qatar Airlines, Lufthansa, etc and the reason behind the competition among the industrial giants is based on rapid globalization. Since the completion is high in the airline's industry, so the airline companies react with price-cutting or other similar attempts to enhance their market share. However, such an oligopoly market generates better efficiencies along with providing better service to consumers, so that a loyal customer base can be developed (Economics Online, 2017). Emirates Airlines, based on such intense competition is planning to further extend its global network so that the internal business strategies of the company can grow through strategic agreements, partnerships and codeshares.

Overall, the strategic business partnerships can significantly expand their offerings along with benefitting the customers that will help Emirates Airlines remain the world’s largest operator of both 777 and A380 aircraft. Therefore, based on the global competition, it has become important to analyze the internal factors so that the growing completion in the industry can be handled efficiently. The growing competition in the aviation industry is demanding better customer relationship management based on which sustainability will be achieved.

4.3 Poor business performance
The profits of Emirates Airlines have suffered a major setback due to higher fuel prices and weaker regional demands and this is evident from the fact that the profits of the company slumped by 69% in the financial year of 2018-19 (Kerr, 2019). The internal business activities of the company have been hit due to the strengthening of the US dollar along with the intensifying completion in the key markets. The companies have been facing glitch that has held up new models along with forcing expensive groundings due to the requirement of emergency repairs. It has thus become extremely important for Emirates to measure the value assessment so that the poor operational or business performance can be reversed and this will ultimately lead to profitable revenue generation.

4.4 The importance of providing development training to employees
Emirate Airlines tremendously emphasizes and invests in the training and development of its employees so that a competitive advantage can be attained. In the existing intense completion among the airline companies, the skills and service provided by the employees play a decisive role in terms of ensuring repeated customer journey. Emirates Airlines focuses on training its employees based on the culture of various countries so that every customer irrespective of their cultural or language background gets the best value of the money spent (Kamarudeen and Sundarakani, 2019). The service level standard can be developed efficiently by Emirates Airlines to ensure that the customers prioritize the travel with the company. Overall through efficient CRM implementation, Emirates can also provide training to its employees according the customer needs and industry benchmarks.

5. Predominant CRM approaches used by the company
5.1 Emirates Airlines management its high-valued customer
Over the years, Emirates Airlines has been one of the most successful and major airlines in the world and the management of the company’s highly-valued customer have been a significant factor behind its success. The company offers various loyalty based programs to its high-value customers that ensures the customers feel valued by the company’s service (Hammett, 2019). The aspect of managing high-valued customers for Emirates Airlines is based on a corporate loyalty program; business rewards and various added features that make the high-valued customers get the value for their money. Overall, flexibility and cost-effectiveness in terms of corporate travel can be considered as an effective management process of the company for dealing with high-value customers.

5.2 How Emirates Airlines Manage Their Customer Life Cycle
5.2.1 Customer Retention
The basic objective of CRM can also be said to improve the company's customer retention, which is carried out by its ability to maintain a transparent relationship with its valuable customers. Emirates Airways can be said to have recognised the importance of establishing as well as developing a transparent long term relationship with its customers and has been able to retain them for a very long time. This is visible in their strategic business framework established by the company, which highlighted bringing optimum satisfaction to each customer. Loyalty programmes has been found to be effective in retaining customers that prevents them from turning towards any company's customers. Therefore Airlines could also use this tactic in order to retain customers. The schemes help in the reduction of any gaps as well as provision of the increased revenue benefits of the company to its customers. Schemes like frequent flyer programs were some of the most used schemes by Emirates Airways, which helped them in retentaining a substantial amount of their customers. Successful customer loyalty programs are a win-win for both parties as revenues are collected and customers are also happy with the benefits that come with the programmes (Kihlstrom, 2018).

In the case of Emirates Airlines, the Emirates Skyward was developed with the intention of retaining the old valued customers and also acquire new customers who would prove to be beneficial for the airway. The Emirates Skyward which is the CRM programme developed by Emirates gives its members the opportunity to earn miles when travelling with the Airways. These miles that are collected by the customers could be redeemed which would provide them with awards that included air awards, hotel stays plus lifestyle, baggage handlings, airport lounge access, excess baggage allowances etc.

According to Matilda Dorotic, digitalised age is slowly becoming a solution for attracting members towards the loyalty programs as well as increase its value. The LPs that has become one of the most prominent business trends for the last decades can be integrated to become mobile friendly and convenient (Dorotic, 2019). Emirates Airlines capitalised on the method and increased the convenience of its loyalty program by integrating a digital membership card system within Emirates Skyward which made it easy for its customer to add it into their digital wallets in their smartphone. Once the customers would register as a member of the program the customer's data are linked with the program that provided the airways with the customer's transaction-related with the company. As the program was integrated into their smartphone, customers were also able to check the miles collected from the smartphone.

Customer complaints are the indicators of customer's satisfaction level with the service or the products provided. Further research has shown that companies that are able to handle the complaints effectively enjoys a high level of customer loyalty (Metwally, 2013) which in turn leads to the attraction of new customers. Also, a customer retention strategy will only become successful if the framework created understands the importance of meeting customer expectations which is necessary for the airlines if it wants to attract new customers each and every day. Emirates Airlines has therefore signed a service level agreement (SLA) with the purpose of ensuring high standards of performance, maintain and securing a safe environment for its customers, which would help in meeting the customer's expectation from the airlines. Emirates airlines also follow an optimised customer service plans in order to reduce complications for its customers and retain them by providing a valuable experience (Emirates, 2020).

Emirates Airlines has also created its own window-based CRM Application with HP ElitePad 900 tablet computers which is provided by the airlines on each flight. The CRM program that is accessible on a tablet makes it easier to concentrate on the experience of the customer. This app is used to obtain information on the passengers about the number of children, the type of foods that they eat, who would prefer a stiff drink as well as who requires any help because of their health issues. The tablet also records every customer feedbacks, the problems related to the flight which would be then rerouted to Emirates headquarters for analysis (Scroxton, 2012).

Emirates also provides its customers with extraordinary value propositions with innovative, award-winning services that include gourmet meals, unmatched on board entertainment systems as well as an aircraft that is environmentally efficient as part of their strategy to attract new customers. The customer-focused products of Emirates are tailored to the needs of the customers rather than the lowest denominator to what is provided by its competitors. While all of the emirates competitors offers its customers a two-cabin service, Emirates has distinguished itself and proposed value to its customers by providing three-cabin services (Emirates, 2016). Other than that Emirates has also been found to provide a popular on board ICE system that is fully loaded with hundreds of entertainment channels on demands, along with an all in one communication device that accommodates the customer needs of emailing, calling from the sky and also surfing the internet.

5.2.3 Customer Development
Emirates in 2018 made adjustments in its Emirates Skywards in order to make redeeming reward flights much easier. The airlines provided more flexibility in managing their skyward miles and added new features that provided the members with the opportunity of transferring, gifting miles to their loved ones. It is now much easier to earn miles as the airlines have provided the opportunity of buying skyward miles. Other than that, by using the free membership of Emirates Skywards besides the use of upgrades and flight rewards, the miles can also be redeemed through 100 programme partners that included, retails, hotels and airlines as well as lifestyle outlets (Emirates, 2018).

Emirates Airlines has been emphasizing customer development by bringing in more product values to its customers. Its US$150 million programmes for refurbishing its Boeing 777-200LR fleet can also be seen as their initiatives towards customer development

6. Identifying Key Setbacks
6.1 Internally
Emirates is one of the biggest airlines in the world which forces the airlines to try and force itself into a competitive marketplace. However, due to this reason, there have been many reports that cabin crew staffs, as well as pilots, are required to work longer hours which shows a problem in their human resource management. This has sometimes led to emirates in operating flights with fewer cabin crew on many occasions (Cornwell, 2018).

There have been reports that the human resource management of Emirates is flawed as it has even been accused of abusing the labour rights of female aviation workers (Miller, 2015).

There has also been various complaints regarding a problem with the CS system as well as failing to follow the term agreement of the SLA that has been mentioned above. Though the airline is trying to implement an efficient CS its large chain of fleets makes CS slow and inefficient for most of the customers. Also, though the airlines have upgraded its Emirates Skyward in order to make it more flexible and efficient people haven't found the upgrades to be compelling. This is because it doesn't provide any award and miles chart and figuring out the miles needed for the trip has been painful for its members.

6.2 Externally
Airlines failure to meet customer needs leads to negative WOM, decreased referral rates and brand switching by the customers. This is possible through poor services to customers as well as unwelcoming staffs within the flights. Customers on Skytrax has been found to be discontent with the services provided by Emirates which has caused them to avoid using the airlines and instead prefer other brands with much better customer services integrated within its system.

Complaints gathered from Skytrax (2020) and the main issues have been highlighted below:

• No availability of upgrading with points: The Emirates Skyward system introduced by the airlines has been found to be useless as the airlines are no longer providing any perks to frequent flyers with enough points. Instead, the Emirates policy requires every flyer to be treated the same.
• Complaints regarding covid-19 infractions: Emirates has been found to follow a dodgy cost save that is putting the flyers at risk. The social distance that is supposed to be followed on the planes is not being followed which has infuriated most customers.
• Not a premium airline anymore: Customer has complained that Emirates cannot be considered a premium airline anymore as most of the planes have become old and most of the seats, as well as inflight entertainments provided by the airlines, are broken.

7. Recommendations
7.1 Analysis of customer compliant
One way of understanding the roots of customer defection is by analyzing the complaints from its customers. Emirates can gather complaints from its various customer review websites like Skytrax as mentioned above. The airlines could also analyse the complaints submitted in the company's customer service centre and use the information to analyze various aspects that need to be improved.

7.2 Closing the gaps
7.2.1 Recruiting and evaluation of human resource management
Since Emirates has been facing problems related to its staffs, the airlines should consider the human resource management of the company and recruit the required staffs that can help in filling up long working hours of the cabin crew staffs and pilots.

7.2.2 Adoption of call centre standards according to COPC
COPC helps with the provision of practices and guidelines in managing as well as facilitating customer experiences through customer services. Therefore it can be used by the airlines in order to audit the effectiveness of its internal customer service and its operation.

7.2.3 Establishment of effective complaint handling processes
The airlines should implement a well-designed process for complaint that can handle various customer complaints from numerous touchpoints. Complaint policies, as well as the processes, also need to be updated and brought to the knowledge of customers.

Conclusion
In the end, it can be concluded that in modern-day business organizations, CRM is considered a core strategy that helps in the creation and maintenance of customer relationships. Therefore, the managers of various business organizations are tremendously emphasizing the aspect of creating significant value propositions along with making the relevant improvements by using techniques of data integration, so that a better customer experience can be developed through high-valued customers.Emirates Airlines can effectively develop its CRM strategies by better use of data integration that will create a better segmentation of customers and allow studying of loyalty program data and consumer behaviour. In addition to that, the company can also look to strengthen its focus on increasing employee values, which is another key driver of CRM circulation. Therefore, the company should a loyalty program data that will keep a track of the regular travellers and generate better personalization by moving to individualized CRM. Lastly, Emirates Airlines can efficiently retain its customers along with developing better strategies by emphasizing CRM management.

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