The objective of the report is introducing the relationship between Customer Relationship Management (CRM) and MAS. This report is focusing to define customer, e-CRM, technology supports; then identify the drivers for MAS to adapt e-CRM strategy and its benefits to them; followed by discussion of ¡§why and how¡¨ CRM; addresses some issue of application CRM; strategy implementation and finally approach for CRM.

To summaries, MAS will realize that an integrated CRM strategy will allow them to manage customer relationships more effectively than even before, allowing them to build long-term customer relationships, brand loyalty and repeat sales that result in increased, sustained profitability.

1. The Value of Customer Relationship Management to the Airline Industry

The airline industry is now facing one of the most challenging environments in its history. A global economic downturn has led to a decline in passenger traffic and decrease load factors. Airlines in today’s global marketplace are faced with increased competition and shirking profit margins. Due to the high forces of competitive rivalry, 85% of passengers in airline industries have a choice of two or more airlines, making loyalty harder to achieve. Today, differentiation through traditional service offerings (for example, in-flight service, equipment, etc.) is becoming increasingly difficult. Additionally, due to increased technological capabilities, many airlines now have accessed to the same technologies, reducing the ability to introduce services with sustainable differentiation.

Over the last few years numerous airlines have felt the chilling effects of increased ‘customer power’, as greater customer choice and lower barriers to defection have turned keeping customers into a battle that must be fought anew each day. Customer relationships are the key to airline business growth. Airlines must take absolute responsibility for a customer’s satisfaction throughout the “want-it-buy-it-and-use-it” experience. This requires learning and tracking customers’ needs, behaviors, and lifestyles and using this information to create a specific value proposition for maintaining the consumer loyalty.

In reality, airlines are increasingly recognizing that customer relationship management (CRM) is a crucial part of the airline operations, which is a long-term investment, with the true benefits, reaped through profitable lifelong customer relationships. CRM defined as activities a business performs to identify, qualify, acquire, develop and retain increasingly loyal and profitable customers by delivering the right product or service, the right customer, through the right channel, at the right time and the right place (Law, Lau and Wong, 2003). CRM integrates sales, marketing, service, enterprise resources planning and supply chain management functions through business process automation, technology solutions, and information resources to maximum each customer contact (Galbreath and Rogers, 1999). Customer relationships must be fostered for airlines to maintain competitive advantage and profitability in the long term. That¡¦s why there are many airlines turning to CRM as a tool for managing customer relationships, its promise is indeed compelling: strengthened loyalty driving increased revenue, with lower costs and improved operational efficiency.