Customer churn rate in the airlines

Customer churn rate in the airlines

customer churn airlinesAs we’ve mentioned in our previous article about telecoms – the customer churn is a serious problem, which appears to be a threat to the company in the long run, if no precautions are taken. Customer churn is the coefficient, which shows the percentage of the customers who stop doing business with a company for different reasons – unsatisfied needs, high prices, bad service etc. The high rate of customer churn isn’t just a problem that needs to be solved, but also a symptom showing the company doesn’t know its clients, their needs and how to satisfy them. So when this occurs, customers change vendors and work with a company that actually has interest in them.

Customer churn in the airlines

Airlines have some similarities with telecoms as businesses – they offer a specific service, which individual use doesn’t happen particularly often, the competition is ruthless, the customers are a lot, quite different and with chaotic buying behavior. Of course, solutions for the customer churn in such services exist. One of the most popular solutions is issuing discount cards – if the customer uses the airline that issued the card, he/she receives points which accumulate, depending on the flight distance. If the customer accumulates a number of points, they can exchange them for a free flight to a destination of their choice or other discounts.
Unfortunately, not every solution works the same and sometimes they are ineffective on some places, due to cultural differences. In USA, for example, airlines tend to accept more reservations that there are places in the flight, just to make sure they will have the plane full, because many people tend to cancel their reservations last minute. But this doesn’t seem to work in Japan, where people don’t cancel their reservations in such short notice.

The truth is, the bigger the customer base, the harder it can be controlled. Therefore the low control over the customer churn. In most cases companies don’t know exactly why they lose customers, but start to develop an interest in this occurrence, once the rates reach high levels.

Customer churn – how to handle it

The modern solution to the customer churn problem in the airlines is software, which can track the online customer behavior and analyze the information, which can give insights on the customer churn of the said company. Such services are prone to using this kind of tools, because their customers make everything online – choosing the flight and making a reservation, paying and receiving the board card – it all happens online. So, the special software can collect such information and give back results that show what the customers look for, what they buy, what prices they prefer etc. These results can give information that can be quite priceless for the development of an airline. The analysis shows what are the weak points of the service, the company or the price policy, as well as what type of loyalty programs can be useful in the particular situation. It’s a fact that a big part of the customer churn happens mainly because of bad service or high prices.

If you want to know more about your customers – what is their behavior when they are on you website, what attracts their attention, what does not attract their attention and what you can do to make things better in order to get more customers – has the software you need. We can show you where are the interest points of your customers – where they look in your website, what they click, what they buy. This will put your company a step closer towards offering a better product or service.