Sample Research Proposal on A Strategic Analysis of Virgin Atlantic's Customer Relationship Management
This paper proposes to explore Virgin Atlantic Airways, specifically on the issue of Customer Relationship Management. Literature shows that CRM is a mainstay in the airlines industry and has been one of the tools of the trade to gain competitive advantage. Virgin Atlantic Airways is one of the companies who is known for its CRM, but with the recent upsurge in technological development, it should be asked on whether or not the company is still on of those who have an effective CRM system. This paper tries to ask the relationship between technology upgrade and CRM effectiveness in the airline industry. It critically reviewed 3 case studies that discuss the recent technological upgrades of Virgin Atlantic. What this project aims is to further increase the knowledge about the Virgin Atlantic's technology upgrades and confirm if such actions are related with CRM enhancement efforts. The project also aims to determine on whether or not CRM is outsourced. It also aims to acquire the opinions of previous customers of the airline. The approach in the project will be interpretivism and inductive, which means that it will only collect secondary data and from there, build a sound hypothesis or theoretical frameworks researchers should evaluate in the near future. INTRODUCTION Virgin Atlantic Airways is one of the most prominent names in the airlines industry when it comes to customer service. Being led by CEO Richard Branson, Virgin Atlantic has made a name for itself as a company that focuses on customer relations and satisfaction. This reputation that the company carries is not hearsay or hype as they have the awards to prove them. Only in 2004, the company has received several awards such as: Business Travel Awards' Best Long Haul Business Airline; Travel Weekly Awards' Best Transatlantic Airline; Cargo Airline of the Year Awards - Air Cargo News' Cargo Airline of the Year; Communicators In Business Awards' Internal Online Publications - Verb Online; and Design Week Awards' Industrial Product Design winner - Upper Class Suite Editorial Design winner – Carlos (Virgin Atlantic Airways Ltd, 2006). Virgin Atlantic's story must be too good to be true. Some airline companies are struggling to build the same reputation that Virgin built but they could not come close. Because of the lack of study that specifically focuses on Virgin Atlantic's customer service effectiveness, there are some questions that are interested to throw: What is the key or keys in Virgin Atlantic's success? What do real previous customers of Virgin Atlantic have to say with their previous experience with the airline? Do customers feel that Virgin Atlantic extends its hands to them to build a lasting relationship? These are just some of the questions to Virgin Atlantic that so far, have not been clearly answered yet because of the lack or limited number of studies on them. CRITICAL REVIEW OF RELEVANT LITERATURES Customer Relationship Management or CRM has recently been considered as one of the most important management strategy for airline companies. Virgin Atlantic is one of the airlines who started implementing this system. Several literatures about CRM in airlines are critically reviewed in this part. CRM in the Air CRM in the Air is one of the journal articles that discuss the emergence of CRM in the airline industry (Bengali et al, 2002). The article is descriptive but did not use primary data. Instead, the researchers used secondary data and presented them in essay format (Bengali et al, 2002). Some of the findings that Bengali et al (2002) shared are the results of a survey of 17 major airlines around the world. The results of the secondary data they acquired indicate that "even the most sophisticated among them (airline companies) have only a rudimentary understanding of who their most valuable customers are or could be, which factors affect the behavior of these customers, and which CRM levers are most effective in ensuring loyalty" (Bengali et al, 2002). Other findings they found showed that effective implementation of such a program can increase an airline's revenue by as much as 2.4 percent a year, representing a bottom-line annual impact of $100 million to $250 million for a large carrier (Bengali et al, 2002). From the secondary data, Bengali et al (2002) identified several major reasons why airlines fail to implement CRM. The first reason is that they lack the systems and processes to implement a CRM program and thus don't have complete or consistent data on customers. Second, they are not investing on technologies that would lower the time and costs of implementation. Third, they can't identify their most valuable customers, because their frequent-flyer programs are little more than general-ledger systems that track accrued and spent miles. Finally, they rarely know how much their customers spend with competitors (Bengali et al, 2002). Bengali et al's (2002) secondary study, although limited in terms of validity of data, has shown some interesting reasons why airlines fail in CRM. The researchers did not only site secondary texts, but also provided some secondary graphs as well to further present the findings of the previous studies they compiled. However, while the data the Bengali et al (2002) acquired can be used to identify the possible weaknesses of Virgin Atlantic's CRM, their findings are limited because the data they provide are not original. But because they study is inductive and open-ended, there is the opportunity to expand their findings further by developing objectives or hypothesis based on them. Case Studies on Virgin Atlantic's CRM Another problem identified by Saratoga Systems (2005) is, because Virgin Atlantic recently phased out its former CRM systems, the new software system they have to implement should be implemented in a very short time period of under six months on a global scale. It should also be user-friendly and customizable. The solution of Virgin Atlantic was to purchase Saratoga Systems to take over their CRM. As expected, Saratoga Systems was selected for implementation across Virgin Atlantic's sales and marketing functions to 250 users in the UK, US, South Africa, Hong Kong, China, Japan and the Caribbean. With its implementation, the company expects the following benefits: improve sales effectiveness; identify new products and services by analyzing global sales performance; improve marketplace intelligence; and short time to implementation, ensuring early results and rapid ROI (Saratoga Systems, 2005). However, during its implementation, one issue was identified – and that is the integration of the system to the workplace. Virgin Atlantic stated: "The greatest challenge however, as with any customer relationship system, was that it needed user acceptance throughout the organization in order to be used properly". Based on the case, Virgin Atlantic prepared for a few more days to implement the new systems. To less surprise, the system delivered and gave them the advantage they need. Virgin Atlantic stated: "We can now bring the information from a number of different global sales departments" (Saratoga Systems, 2005). The paper concluded that the system provides Virgin Atlantic with the flexibility to change and adapt to the fast moving business environment because it is so easily customized. Furthermore, Virgin's salespeople now have access to information that allows them to work more effectively in support of the company's overall goals and strategic vision to build a profitable, loyal customer base (Saratoga Systems, 2005). Another case study on the CRM of Virgin Atlantic was provided by Sun Microsystems. Sun Microsystems (2002) talked about the need for Virgin Atlantic to update its servers running Oracle. The case study was basically about the shift of Virgin Atlantic from IBM and Windows NT servers to Sun Microsystems' Fires server. In late 2001, Sun delivered and installed Virgin Atlantic's new servers, a pair of Sun Fire 6800 servers each with 12 UltraSPARC™ III 900MHz processors and running the Solaris™ 8 Operating Environment. The results of case study showed that the shift of Virgin Atlantic in server enabled the company to save cost and increase functionality in service (Sun Microsystems, 2002). The case study provided by Sun Microsystems is not directly focused on CRM per se, but is focused on a technology that has something to do with the CRM systems of Virgin Atlantic. Again, the main limitation of these case studies is the lack of general data to support their findings. Findings were just collected from informal talks with managers or experiences of Virgin Atlantic or Sun Microsystems employees. But then, their case provided insights about how serious Virgin Atlantic is in improving their CRM. Both of the case studies cited here shows how Virgin Atlantic sees technology upgrades as instrumental in improving the customer service and relationship of the company. What is CRM? Customer Relations Management is a management concept or an approach to managing customers that combines various elements of technology, people, information resources and processes in order to create a business that takes a deeper view of its customers (Galbreath and Rogers, 1999). CRM integrates sales, marketing, service, enterprise resource planning and supply-chain management functions through business process automation, technology solutions, and information resources to maximize each customer contact. CRM facilitates relationships among enterprises, their customers, business partners, suppliers, and employees (Galbreath and Rogers, 1999). There are certain issues that concern the implementation of CRM. One is the suggestion that it should be adopted using the holistic approach (Girishankar, 2000) because of its nature that involves business process change and the introduction of new information technology (Galbreath and Rogers, 1999). The holistic approach places CRM at the heart of the organisation with customer orientated business processes and the integration of CRM systems (Bull, 2003). Holistic approaches to CRM help organisations co-ordinate and effectively maintain the growth of disparate customer contact points or channels of communication (Bull, 2003). However, problems of channel conflict have been identified whereby customer experiences differ depending on the sales channel (Peppard, 2000). Another CRM implementation issue is sourcing. Bull (2003) explained that many organizations have few alternatives but to outsource a significant proportion of their CRM solution as they lack the resources to develop CRM software. According to MacSweeney (2000) 60 per cent of in-house CRM systems fail. Furthermore, timing is also important, as developing CRM software in-house can be a lengthy process and there are rewards to those that can respond rapidly and appropriately (Howle, 2000). Another "must achieve" for CRM is that it needs to identify transactional customers to help organizations respond appropriately. Then, another dimension is the ability to deliver the strategy successfully. CRM strategies are only effective if they deliver positive outcomes (Bull, 2003). The literatures cited above identifies an important point that should be asked on Virgin Atlantic – is their CRM outsourced. The literatures emphasized the difficulty of having an in-house CRM policy because of time consuming and costly nature of the implementation. Having insight in that information calls for an investigation on the CRM approach of Virgin Atlantic – on whether they outsource them or not. There is also a need to identify the how much knowledge does Virgin OBJECTIVES OF THE STUDY Two important issues were identified in the critical literature review: the importance of technology; and the importance of outsourcing CRM. From those, the following objectives will be addressed: 1. To explore the technological improvements that Virgin Atlantic has done or is planning to implement in the near future to improve their CRM further. 2. To explore on whether or not Virgin Atlantic outsource their CRM. 3. To acquire the views of previous customers about their experience on Virgin Atlantic. SIGNIFICANCE OF THE STUDY The significance of this study or the interest behind it lies in the curiosity to find out if Virgin Atlantic is for real or just hype. For years, there have been press releases that state the capability of the company in making customers feel satisfied. However, there are only few studies that investigate if this is a fact or not. Furthermore, through this study, one can learn more about how the CRM of the company works. Specifically, the focus will be on the importance of technology on its implementation as well as the preference of the company for implementing it – outsourced or not. It is hoped that through this investigation, more issues will be discovered and will be investigated in the near future. As for the industry itself, this study can help identify several key issues within the CRM implementation of Virgin Atlantic. For instance, it can identify if the technologies play an important role on the company's CRM policies. It can also identify if customers are really satisfied with their service. Through this investigation, the industry or Virgin Atlantic itself will have an insight on their operation, and may be able to assess how valuable and important CRM is to them. RESEARCH QUESTIONS The following are the key questions that this project will answer: 1. What are the technological improvements that Virgin Atlantic integrate this year to improve customer relationship? 2. What are the technological improvements that Virgin Atlantic plan to integrate to further enhance customer relationship? 3. Does Virgin Atlantic outsource their customer relationship management system? 4. Do customers find their experience with Virgin Atlantic satisfying? RESEARCH METHODS The approach to the project will be inductive approach. It means that it will not test any hypothesis, but rather, will collect secondary data to build a descriptive knowledge about Virgin Atlantic and provide rationalization and analysis to develop a sound conclusion. This study adapts the philosophy of interpretevism, whereas the researcher is part of the research being conducted and is allowed to produce interpretations based on observations, interviews, and surveys from specific respondents (Saunders et al, 2003). This will include primary and secondary literatures. By that, it means that it will base its findings from previous studies or articles about Virgin Atlantic's customer relationship management or the satisfaction of the company's customers. Data Collection The project will only use one type of data collection method, and that will be critical literature review. In this case, the literature review process developed by Saunders, Lewis, Thornhill and Jenkins (2003) will be used as a framework. In this framework, it all starts with the research questions and objectives. From those sets of segments, parameters will be defined and from those parameters, keywords will be generated. Key words that were generated will be researched. After obtaining the literatures, they will be evaluated and recorded. Drafting review will start after the process and then parameters will be redefined if applicable. Redefinition of parameters will open up another new process that starts with the generation of new keywords from those parameters (Saunders et al, 2003). Primary literatures will be collated from reports, theses, emails, conference reports, company reports and unpublished manuscript sources that have something to do with the CRM of Virgin Atlantic. On the other hand, secondary literatures will be collected from newspapers, books, journals and internet materials that discuss issues relevant with any of the research questions or objectives of this study. Data will be analyzed qualitatively using Template Analysis. In this type of qualitative analysis, a template is referred to as a list of the codes or the categories that represent the themes revealed from the data (Saunders et al, 2003). This approach involves categorizing and unitizing data. Here, data are coded and analyzed to explore themes, patterns and relationships. They are also arranged hierarchically to show relationships. The template may continue to be revised until all of the data collected have been coded and analyzed carefully. PLAN CHAPTER HEADINGS The study will have five chapters overall. The following are the planned chapters for the project: Ø Chapter 1 – This will present the background of the study and will discuss the problem at hand. It will also explain the purpose of the study and will provide a list of the objectives and questions that the study wants to ask. Ø Chapter 2 – this will present the secondary data collected for the study. It will summarize and discuss important literatures that may help in the interpretation of the project's results. Ø Chapter 3 – This will discuss the different methods and data analysis used for the study. Ø Chapter 4 – This will present the important data collected from primary and secondary literatures. Ø Chapter 5 – This will review the whole study and will present the conclusion generated from the data collected. It will also provide recommendations and suggestions if ever some useful tips would be acquired. |
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