Current Status
British Airways (BA) was among the top European carriers in terms of profitability in the early nineties. Nevertheless, the airline segment was gradually becoming exceedingly competitive, with emerging global alliances of large-sized airlines and their intention to develop a single-sided international market(Sasser & Klein, 1994). BA had been making significant moves to get a slice off other airlines, like US Airways, or to make partnerships, but it had concluded that it had to stand out in that crowd.
Introduction
The case will be discussed, analyzing how BA reengineered information technology to become more effective in customer relations and error-handling processes(Sasser & Klein, 1994). BA implemented CARESS, a difficult complainant’s fault-finding, and re-involvement, shearing Times of customer satisfaction and, eventually, customer retention and revenue.
Objective and Methodology
BA’s primary objectives were to:
- Cut down on the response time to customer complaints, which lasted from weeks to days.
- Provide assistance to and recover previous service customers who had experienced such a service failure.
- Review complaint data in order to trace the causes and remove the sources of the factors responsible for the negative feedback (Sasser & Klein, 1994).
BA invested £4.5 mn in CARESS, which provided an integrated system that took over complaint letters published on physical papers and processed them by a centralized database for customer information, contained efficient response processes, and facilitated root cause analysis of complaints.
Benefits
CARESS’s implementation resulted in multiple achievements for British Airways in enhancing candidate relationships and efficient business outcomes. Such delay was noticeably decreased, with complaints being handled within the next five days. The timely and genuine response from BA was the main factor that helped the company to retain the dissatisfied rather than lose them; the figures are impressive, with the retention rate for complainers reaching as high as 87% as compared to a 13% defection rate for those who were simply satisfied but did not complain(Sasser & Klein, 1994). In addition, BA believes that an increase in violation of customer relations by 1 % could bring back the airline between £200,000 and £400,000 in revenue, which defectors were not returning.
Beyond the financial tasks, CARESS was also linked to operational efficiency and improved employee morale among the customer relations team. Within the first 24 months, the order shipments tripled along with the job scale from low teens to 69%. (Sasser & Klein, 1994). Thus, the remittance of payment for the system has been estimated to break even within the first year of operations; this reveals it has been a very successful recovery measure since it has created value through improved customer retention as well as value recovery work, which was enabled by the new technology and processes.
Risks and Challenges
However, CARESS exerted a transformative force upon British Airways’ customer experience strategy, yet the process involved numerous risks and issues involving the corporation. The complaint iceberg was another issue; though 69% of the unhappy customers did not report it, their silent displeasure meant they would take their business elsewhere(Sasser & Klein, 1994). It was also vital to teach the frontline staff mechanisms for providing recovery services to customers. Furthermore, conforming with the BA’s customer-focused approach has harmonized vendor processes and systems. Then, poignantly, the main thing that will be a cue for the constant improvement of customer experience management is quite a laborious effort of sustainable character.
Conclusion
BA’s implementation of CARESS showed how information systems could be used akin to strategic tools to facilitate organizational change and ensure business processes’ core quality improvement. BA will gain loyal customers by digitalizing and streamlining complaints handling, solving the problem of revenue losses because of dissatisfied customers, and earning the company’s reputation for superior customer service (Sasser & Klein, 1994). Nonetheless, BA learned that technology was not the only key to success; an integrated approach, which considered people, processes, and cultural changes, was deployed.
References
Sasser, W. E., & Klein, N. (1994). British Airways: Using Information Systems to Better Serve the Customer – Case – Faculty & Research – Harvard Business School. Www.hbs.edu. https://www.hbs.edu/faculty/Pages/item.aspx?num=13160
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