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TABLE OF CONTENTS
CONFIDENTIALITY AGREEMENT 2
AUTHOR CONTACTS 3
TABLE OF CONTENTS 4
EXECUTIVE SUMMARY 5
BUSINESS BACKGROUND 7
CONSUMER EXPERIENCE MAP 11
CONSUMER REAL VIRTURAL EXPERIENCE 17
THEORETICAL AND MANAGERIAL IMPLICATIONS 19
The purpose of this article is to evaluate the customer experience of Air New Zealand's online purchase service and to combine theoretical analysis to guide online assistance. This paper attempts to analyse the focus of its activities in the market by investigating the background of the aviation industry, market competitors and its organisational structure (alliance, shareholder relations and joint ventures, etc.). As the market demands continue to grow, so does the competition in this industry. With the help of digital developments, Air New Zealand has successfully increased its market share by identifying potential customers and using online tools (computer websites, mobile apps, etc.) to interact with customers. Through research, we can conclude that the differentiated services provided by enterprises at various touch points are vital to the customer experience. At the same time, additional preferential assistance and high-quality services are also an essential means for Air New Zealand to win in the aviation industry.
HOW CAN AIR NEW ZEALAND BE THE BEST DIGITAL AIRLINE GLOBALLY?
THE CUSTOMER-CENTRIC CULTURE SHIFT FROM “WE FLY PLANES” TO “WE FLY PEOPLE.”
2. BUSINESS BACKGROUND
Air New Zealand is the recipient of the number one placing by AirlineRatings.com of 2018 in its annual assessment of the world's carriers, ranking ahead of its antipodean rivals Qantas and Singapore Airlines. In July 2018, according to KPMG's New Zealand Customer Experience Excellence Report, of the 124 New Zealand brands surveyed, Air New Zealand ranked second among New Zealanders' favourite brands. Like many other airlines, Air New Zealand has implemented an online booking system and customer service system to serve its customers in the digital world better. The online service includes many aspects, covering the time from the customer's initial dreaming stage until post trip. Therefore, the need for both functional and emotional experiences is what will ensure Air New Zealand builds more in-depth relationships with those who chose to travel with them.
Headquartered in Auckland, Air New Zealand operates passenger flights to 20 domestic and 31 international destinations in the Pacific Rim and 19 countries in the UK. The airline has been a member of the Star Alliance since 1999. In October 2001, Air New Zealand was re-nationalised under a New Zealand government NZ$885 million rescue plan (with the government taking an 82% stake) and subsequently received new leadership. In November 2013, the New Zealand government reduced Air New Zealand's share from 73% to 53% as part of its controversial asset sales program. As of June 30, 2017, Air New Zealand's latest shareholding ratio is as follows: New Zealand government (52%), International institutional investors (39%), New Zealand institutional investors (6%), and Retail investors (3%).
Air New Zealand's major international competitors are Qantas and Jetstar, as well as Qantas' partner Emirates. Virgin Australia hopes to work with Air New Zealand to develop a market across the Tasman region. Air New Zealand also hopes to have good cooperation with Virgin Australia and has purchased a 25% stake in Virgin. Domestic competitors are mainly Ansett New Zealand, Kiwi Air, Freedom Air, Origin Pacific and JetConnect (Operating under the Qantas brand).
Fig.1 Number of Passengers Carried by Air New Zealand in the past five years.
According to Grow sustainable air connectivity (2014), Air New Zealand accounts for about 40% of the total market share, and the number of passengers carried each year is also steadily increasing with an annual increase of 4%-6%since 2013. According to the February 2018 financial report, Air New Zealand’s income before taxation for the first six months of 2018 was $323 million, compared to $349 million in the previous period. Net profit after tax was $232 million.
SUMMARY OF KEY FINDINGS
Fig.2 New Zealand regional airline website traffic rankings (2013)
In New Zealand, the love of Air New Zealand is obvious. On the PC website, the Experian Hitwise survey shows that Air New Zealand's three websites (www.airnz.co.nz, www.grabaseat.co.nz, www.myairnz.co.nz) add up to more than 62.36%. The number of visits was 48.75% higher than the second-place Jetstar(13.61%).
Fig.3 Alexa traffic rankings and mobile apps ratings for the top three airlines
in AirlineRatings of 2018
Comparing the data between the computer and the mobile phone side by side, we compared the top three companies in the 2018 airline rantings and found that the number one Air New Zealand airline is not the highest on the mobile phone, and the traffic on the computer is not the busiest. From the three companies' annual financial reports,Air New Zealand has the lowest profit before taxation of these companies, only $527 million (Qantas has $1,401 million, and Singapore Airlines has $1,101 million). So, how did Air New Zealand win the hearts of passengers for five consecutive years, and ranked first in the airline ratings? Through data investigation, have the following conjecture:
a. Air New Zealand is very dedicated to advertising, and the annual flight safety video is impressive, allowing passengers to add a good impression to the brand.
From the Lord of the Rings to the Hobbit movies, Peter Jackson handed in a satisfying answer to his hometown of New Zealand. Air New Zealand’s security video was also impressive, as the film got rid of the tedious and monotonous nature of flight safety videos, and the interactive video was very engaging through the interaction with the film characters. There is also a series of flight safety videos of Man vs. Wild series, which is also in excellent cooperation with Bear Grylls.
b. Both Air New Zealand's two websites perform their duties, attracting more potential customers along with mobile apps when faced with different customer groups.
Air New Zealand's app can view the latest details of flight reservations, access mobile boarding passes, receive push notifications about flight changes, and Grabaseat targets a group of users who are sensitive to ticket prices, which are not too high for airlines. Loyalty, but very concerned about the price of the ticket. Grabaseat often releases some low-cost tickets inside and outside New Zealand. Since its inception in 2006, Grabaseat has experienced phenomenal growth, with an average of more than 28,000 people visiting the site every day. Air New Zealand offers a $10 domestic flight, who would not like it.
c. Air New Zealand has done a great job in digital interaction with customers and customer insights.
As of January 23, 2017, Air NZ has sold more than 2 million cups of coffee on the app. From 2014, Air New Zealand's mobile app offers a range of features to help customers board, enter the lounge and enhance the boarding experience, including check-in, managing reservations at any time, receiving flight information in real time, and even can order Coffee. Just tap the phone screen before entering the waiting room, and the hot coffee is ready when passengers step into the waiting room. Air New Zealand's customer insights are doing very considerably at this point, because this move is the world's first, and the demand for passengers is very insightful. After all, no passengers would say, "I want to order a cup of coffee through the airline's app."
3. CONSUMER EXPERIENCE
"Customer Experience is Where Your Brand Promise Lives or Dies."
- Ben Cotton
Air New Zealand's commitment to its customers is: "creating a workplace where teams are committed to our customers in a distinctively New Zealand way". In the author's opinion, the following aspects are a reasonable explanation for the “New Zealand Way”.
The customer experience for Air New Zealand began as a result of passengers conceiving travel destinations. Enter Air New Zealand's website or mobile app, customers can see the search box on the home page, and they can directly enter the destination and departure time, and then browse the flight information. For new users, the registration process is not cumbersome. When determining the ticket information, the quick payment method allows the passenger to complete the payment instantly and receives the ticket confirmation information at once. Customers can then schedule travel insurance, taxis, car rentals, hotels, or parking spaces on their mobile apps as well. Whether it is for business travellers or family travellers, this is very considerate and convenient.
The passengers are delivered by the taxi which has been booked in advance to the airport on time. They do not need to go to the counter to check-in. With the mobile app, they can quickly check in the boarding pass and baggage check-in and choose the seat they like. At the same time, book a cup of hot coffee on the app and take it away when passing through the waiting room, saving much waiting time. If the boarding gate changes, or if a flight delay occurs, real-time push information also appears in the app's notifications, so they do not have to pay attention to noisy airport broadcasts. The weather information of the destination is also available on the mobile app.
After boarding, passengers will see the wearable wristband device called "Airband" from Air New Zealand. Airband for children travelling alone on New Zealand domestic or international flights. Sensors read the chip in the Airband at various points of the journey, and up to five nominated contacts are notified by text where the band is. After landing, passengers can check their mileage credit status through the mobile app and plan the next travel.
3.1 Key Stages of Customer Experience
Fig.4 online customer experience model
Air New Zealand's official website is a highly digitised website with a mobile app that is also fully functional. It is worth mentioning that since the mobile app was launched in 2014, there have been more than 1 million downloads, and some potential customers have become Air New Zealand customers through the grabaseat website. The information processing of the website is very efficient and secure, the response speed of the website is also breakneck.
Perceived Ease of Use
Online purchases are more convenient than the way customers buy tickets at a travel agency or ticket centre. The first advantage is high efficiency; wherever and whenever they have access to the Internet, they can browse the ticket information. The second benefit is that the price is low, eliminating the operating costs and handling fees of offline stores, and it is usually possible to buy cheaper tickets online.
Customers who purchase airline tickets are often sensitive to the price. In many cases, the price is the deciding factor in which customers decide to buy. Air New Zealand's website makes it easy for customers to compare prices. The price of different departure times and different classes of cabins is displayed visually on the webpage. The enlarged design of the price fonts attracts the attention of customers.
The web and mobile app interfaces are very user-friendly and can be easily viewed without the need for skills. However, how to buy a ticket at a lower price requires some experience. So Air New Zealand launched the grabaseat website. On this website, customers can easily buy cheap tickets without too much thought. Sometimes domestic air tickets are as low as $10.
Air New Zealand's largest shareholder is the New Zealand government, and the image of state-owned companies makes it easier for consumers to build trust. As the largest airline in New Zealand, Air New Zealand ranks among the best in the international airline rankings in recent years, which inevitably creates a “trustworthy” image for consumers.
Trust is a significant factor hindering customers from making online transactions. Building trust in the business will help eliminate this concern. Besides, the online payment service provided by the website, as well as the increasingly developed credit card security system can help consumers reduce unknown risks.
Customers can purchase tickets for the nation's largest airlines at reasonable prices and even at low prices. They can enjoy the high-quality service during their journey, which can bring a sense of enjoyment to a certain extent, especially for the group of users who are sensitive to the price of the ticket.
Air New Zealand’s website and mobile app are interactive tools that show features such as flight searching and flying management on its homepage. The homepage also details the price of airfare on different routes both domestically and abroad, providing more options for potential customers. Also, grabaseat presents customers with low-cost air tickets, which significantly reduces the flight vacancy rate, and improves the customer's experience while improving the company's revenue. It is a win-win situation.
The website provides a variety of travel routes and attractive images, and consumers and potential consumers are unconsciously attracted to the big picture of the travel destination while browsing the web. Sending daily emails and notifications to their members via mobile apps and emails also helps provide more choices for members who frequently travel.
3.3 The consequence of Customer Experience
When passengers are asked what kind of rewards they want from airlines,
35% of members said points were the most important reward. Other vital rewards included flight upgrades (21%), priority check-in and boarding (16%), and fee waivers (15%).
Air New Zealand has done a great job at this point, they have launched the Airpoints program, which can be used to redeem free tickets. The industry's first "Skycouch seats" program has also been admired by customers, allowing passengers to have the additional footrests which fold to form a couch and the armrest on the window side raises. With the mobile app, customers can self-check-in without waiting. These actions have been highly praised by customers and have increased the reputation of the brand.
Consumers’ comments on social networks and users who use the site to shop multiple times provide a reference for potential customers in the future. Air New Zealand's quality service is satisfactory, relatively inexpensive and stable, ensuring competitiveness in a competing market. The notification of the mobile app and the email sent to the customer also help to maintain consumer engagement. The expanding flight routes also allow consumers to have more alternatives before they travel.
3.4 Consumer Behaviour
Air New Zealand offers a wide range of flight routes and tickets available for purchase. Shoppers also are given knowledge associated with coming sales and worth transactions to permit them to set up future travellings. Plans are classified as simple to know titles supported shopper preferences.
Consumers have the inducement to shop for tickets in an extremely low worth. The sense of accomplishment of getting high-value merchandise at an occasional worth is to guide shopper satisfaction. Additionally, the quantity of tickets on grabaseat is restricted, permitting customers to get them for a restricted time. Shoppers also are motivated by a time-based decision-making method that gets bargained deals before the other member.
Summary Of Key Findings
By studying the customer's Cognitive and Affective state, combined with customer behaviour and Air New Zealand's Consumer Experience map, it can be concluded that:
a. The vital links affecting customer decision-making will directly affect the customer's mental perception, thus affecting customer behaviour;
b. On the online trading website, the ease of use and user-friendly interface have the particular influence on the user;
c. Obtaining more potential customers through different touch points is an essential circumstance for winning in the market competition.
4. CONSUMER REAL VIRTUAL EXPERIENCE
Bryant Chan, male, 29 (software engineer)
Russel Justin, male, 44 (hotel manager)
Tracy Wind, female, 35 (waitress)
1. Have you tried to book a flight online?
2. Have you used Air New Zealand's website or APP?
3. According to the following three scenarios, from the six aspects of functionality, aesthetics, ease of use, personalise, responsiveness, and online customer service, after you use it, you will rate Air New Zealand's website and APP (1-10), one is very Not satisfied, ten is very satisfied.
Scenario 1: Buy a one-way ticket from Auckland to Wellington next Saturday and try to upgrade to Skycouch.
Scenario 2: the Family holiday on Christmas holiday, but there is no destination, try to browse Air New Zealand's official website and APP, or get advice from online customer service.
Scenario 3: You have a friend who wants to send your daughter from Christchurch to Queenstown. He hopes to travel the cheapest ticket next month, try to get information about Airband on the website, and then book a ticket and an Airband for her.
Fig.5 Results of interviews
Summary Of Key Findings
a. The customer has the highest functional evaluation of the New Zealand Airlines website, with an average score of 7.7 points, and the functional requirements for search flights and itinerary management are satisfied.
b. Customers are not satisfied with the ease of use of Air New Zealand mobile APP, with an average score of only 6 points, many functions of the APP need to switch to the website to complete, which makes them feel uncomfortable.
c. On average, the score of a website is higher than that of a mobile APP. Judging from the scenarios of the interview, the users are more fulfilled with the website than the APP.
5.1 THEORETICAL IMPLICATIONS
The power of digitisation is rewriting the needs of consumers. In the connected economy, consumers are not only buyers but related groups. Mobile and social media have created unprecedented sharing conditions for consumers. They can share their preferences and suggestions for more people, and even form a group spontaneously for their favourite brands.
It is understood that 67% of customers will do a lot of price comparison research before the transaction, they prefer to use the Internet or social network to collect information, rather than a face-to-face conversation. Consumers not only want to be able to access the merchant's information, products and services anytime, anywhere, but also expect to undergo a consistent experience with the physical store in the digital channel.
Consumers want to be "friends" with businesses. In the relationship between the two, consumers do not want businesses to treat them only as customers, but rather to be more willing to know them, understand them, learn about their preferences and needs, and maintain a personal relationship with them - know about What do they want to buy, what the purpose is, what kind of service they want, and redesign the end-to-end customer experience for them.
The transformation of customers is reshaping the enterprise, and the business community has come to redefine the “customer-centric” time. Whoever can move faster from “product-centric” to “customer-centric” and able to capture and meet the individual needs of consumers will win the future.
5.2 MANAGERIAL IMPLICATIONS
More Attention to Messaging apps
Messaging applications are growing at an alarming rate year after year - last year's global growth rate was 40%. In China, where messaging applications have become popular, the growth rate has exceeded 50%. There are three messaging apps - WhatsApp, Facebook Messenger and Wechat - that each user has more than 1 billion monthly active users. That is a fantastic amount. Travellers are increasingly using social media and these messaging applications to solve all their problems, concerns and feedback. The media even predicts that by 2020, 90% of customer service participation will occur through social media.
Pinduoduo reduces the price of these products for every friend a user refers. It is gamification. Airlines can also use a similar method, such as inviting friends to click on their ticket to reduce the price, use games and social networks to get more client.
According to different scenarios and different needs of users, airlines can provide more personalised services.
If a customer is the boss of the company, he likes business class when travelling, so don't give him the information about cheap flights, and his identity does not match.
If a passenger is a vegetarian, then please don't give him any meat-containing food. That is the primary need.
If a passenger is tall, reserve the front row for him in advance because it meets the expectations of the guests.
In short, it is to build a more substantial and more specific customer information database to provide customers with better-personalised services through user data.