Introduction
KLM aims to be the “most customer centric, innovative, and efficient European Network Carrier” with a special focus on customer intimacy. However, the current way in which KLM introduces its products to its customers is not aligned with this vision. This misalignment can reduce the company’s performance in relation to other airlines that compete in the same market. Therefore, the problem definition was stated as: “KLM needs to improve the way its products are introduced to its customers so it matches the company’s vision of customer intimacy”. The term products in this problem statement refers to ancillaries, which are a great source of revenue and at the same time help travellers to create their own experiences. In order to solve this problem, the research questions for this project are formulated as follows:
“How can KLM digital offer its products in the most relevant way to its customers?”
“Which elements should be considered to create an offer?
Analysis
The variety of topics explored during the internal and external analysis is very diverse, but all of them provided valuable insights. The exploration of the context revealed that airlines will increase the control over its own products which will be merchandised in order to be differentiated. Merchandising means that products are promoted in a way that are more attractive to customers instead of only being displayed. Regarding ancillaries, there are six main areas that can be merchandised: offer, price, channel/device, time and place, communication, and offering technique. In addition, bundling is a relevant offering technique which is closer to KLM’s customer intimacy goal due to travellers’ high interest in it. For this reason, this offering technique is further explored by reviewing relevant literature and it is also tested during the research phase.
Research
The research phase has three main objectives: first of all, find out if customers really see ancillary bundles as an interesting product and if they are willing to buy them, which factors have an effect in their purchase intention, and which combination of factors creates the most relevant ancillary bundle offer for customers.
Proposal
All the knowledge gained during the analysis and research is combined during this phase in order to create the most relevant combination of products for travellers. The insights are clustered according to six different areas: offering technique, offer, touchpoint, channel/device, communication, and target and they have been put together in the following model.
Implementation
The ideal situation would be to deliver a personalised and consistent ancillary offer to each customer in order to enrich the overall KLM customer experience. For reaching this long-term objective, the implementation plan defines and describes the steps that should be taken to reach this objective
Conclusion
The new proposal for ancillary offering improves the current misalignment between KLM’s vision and the product offering. It helps the company to be a step closer to its customer intimacy vision by offering relevant products in a relevant way not only based on customer segments, but also individually.