This is a discussion thread by my classmate I want to reply on it Singapore Airl

Question

This is a discussion thread by my classmate I want to reply on it

Singapore Airlines is a successful airline company, they serve many customers daily. My suggestion is that they should change their focus to customer retention because they have many customers already. Customers that purchase because of current promotions are likely to move to the next competitor after the promotion is over (Hoffman K.D., 2017). An example of a company improving customer retention is "Netflix, which charges a monthly subscription rate of $8.99 for new sign-ups to its streaming service while charging $7.99 to its current subscribers" (Lee S., 2017). This strategy will create strong customer relationships and therefore build a loyal customer base, instead of attracting short-term customers with promotions.

My suggestion is that they create a customer loyalty program. Do you have any other suggestions, in which they could implement this strategy?

Thank you.

ABC

Hoffman, K.D., & Bateson, J.E (2017) Services marketing: concepts, strategies, & cases.Boston, MA: Cengage Learnings

Lee, S., & Fay, S. (2017). Why offer lower prices to past customers? Inducing favorable social price comparisons to enhance customer retention. Quantitative Marketing & Economics, 15(2), 123-163. Retrieved from https://libsecure.camosun.bc.ca:2443/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=122859110&site=eds-live

Explanation / Answer

The intense Competition in the airline industry can be attributed to the emergence of cost effective and high quality service oriented airlines, particularly Emirates and ultra low cost no frills players like AirAsia. As a result companies like SIA need to provide value to customers on cost and service part each, to be competitive. It can't be compared with Netflix that operates in a low ticket high volume purchase segment, where a subscription might work. SIA can create its unique personalised programs for loyal customers like gradually decreasing prices with frequency of travel, customised tour plans with accommodation,transportation and other facilities which can be planned in line with their previous itineraries and preferences , just as a family friend will do. Exemplary service at lower cost and high level of personalisation is the recipe for keeping the customer guessing and expecting the next higher level of personalised offering may prevent him / her from moving to competition.

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