Online Customer Respect Study – Airlines & Travel Industry · Online Customer Respect Study – Airlines & Travel Industry The Web is the only medium enabling cost effective one-to-one

© 2003 The Customer Respect Group, Inc. Reproduction Prohibited. September 2003

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Online Customer Respect Study – Airlines & Travel Industry


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Table of Contents Copyright and Liability Disclaimer.................................................................... 3 Key Findings................................................................................................. 4

Airlines...................................................................................................... 4 Travel Firms .............................................................................................. 6 Hotels, Resorts & Casinos............................................................................ 8

Introduction ............................................................................................... 10 Why the Web Matters................................................................................ 10

Analysis ..................................................................................................... 12 Methodology Enhancements....................................................................... 12 Privacy.................................................................................................... 13 Transparency........................................................................................... 13 Principles................................................................................................. 14 Responsiveness........................................................................................ 14 Simplicity ................................................................................................ 15 Attitude................................................................................................... 16 Industry League Tables ............................................................................. 17 By CRI Ranking........................................................................................ 17

Methodology............................................................................................... 19 Overview................................................................................................. 19 Research Methods .................................................................................... 20


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Copyright and Liability Disclaimer The information contained in this report is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. The Customer Respect Group accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or its contents.

© 2003 The Customer Respect Group, Inc. All rights reserved. Reproduction Prohibited.


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Key Findings Airlines Customer Respect Index (CRI)

o The Customer Respect Index for this sector is 7.4 o Companies receive the best rating (CRI 8.4) for Simplicity and

the worst (CRI 6.2) for Principles Online & Offline Contact Methods

o 89% provide email forms o 11% provide offline contacts such as phone numbers or postal

addresses Responsiveness

o All companies responded to online inquiries.

o Of those:

38% respond within 48 hours 12% respond within 72 hours 50% respond after 3 days

o 75% use Autoresponder technology.

100% of those follow-up with a full response

Privacy Policies

o All companies provide a Privacy Policy on the site Keyword Search

o 67% provide a Keyword Search function on their site.


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Cookies

o 89% of sites use Cookie Technology o Of these:

88% provide some explanation of how cookies may be disabled

12% use cookies and do have a Privacy Policy, but provide no explanation for how to disable cookies


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Travel Firms Customer Respect Index (CRI)


the worst (CRI 7.4) for Principles Online & Offline Contact Methods

o 80% provide email forms o 20% list email addresses

Responsiveness

o All companies responded to online inquiries.

o Of those: 70% respond within 48 hours 30% respond after 3 days



Privacy Policies

o All companies provide a Privacy Policy on the site Keyword Search



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Cookies



22% use cookies and do have a Privacy Policy, but provide no explanation for how to disable cookies


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Hotels, Resorts & Casinos Customer Respect Index (CRI)


the worst (CRI 6.3) for Principles and Responsiveness Online & Offline Contact Methods

o 84% provide email forms o 8% list email addresses o 8% only provide offline contacts such as phone numbers or postal

addresses Responsiveness

o 9% did not respond to online inquiries.

o Of the 91% that did respond:

50% respond within 48 hours 50% respond after 3 days



Privacy Policies

o 75% of all companies provide a Privacy Policy on the site Keyword Search



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Cookies



33% use cookies but don’t explain in a Privacy Policy how they work and how they can be disabled


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Introduction This is the second Online Customer Respect report for the Airlines & Travel industry in 2003. The first one was published in April 2003. Both reports are based on the companies on the Fortune 1000 list, in addition to selected Travel Firms that are currently not on that list. For this report we reviewed the Web sites of 31 companies in the following industry segments:

• Airlines • Travel Firms • Hotels, Resorts & Casinos

Why the Web Matters A well structured and informative Web site should be a key component of a company’s overall marketing and branding strategy. Often it is the first point of contact a (potential) customer has with the company. Based on the 2002 UCLA Internet Report, the average user spends 11.1 hours a week online. The Internet has become a main tool for customer information and product research. The Cahners Advertising Research Report, 2001 found that 8 out of 10 business professionals are using the Internet for product information and evaluation. 83% are looking for product information & evaluation and 55% access company information to learn more about an organization. 90% of online consumers use the Web to research a purchase and 10% search Web sites to find out where to buy offline.1 Recent studies have shown that only about 20% of all online customers trust that their personal information will be protected when they shop online. 82% declined to provide any personal information because too many details were asked for that didn’t seem necessary2. 64% decided not to buy online because they weren’t certain how their personal data might be used. A recent study conducted by the University of Pennsylvania3 revealed that online users are confused about personal data collection and sharing practices described in online privacy policies. Those numbers show that providing a complete and transparent privacy policy is just as important as a nicely designed Web site. Not just to ensure online sales, but to also earn the customer’s trust and keep her as a loyal customer for the future. Web sites have become a major source of product and service information, but more importantly, they also provide a great opportunity for cost reduction. A Forrester study1 shows that 37% of online customers have used customer support on a site. The same study suggests that support costs can be reduced by $5 to $25 per incident.

1 Forrester Research, “Keeping Customers Loyal” 2 Harris Interactive/Cutnan and Mine, 12/2001


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The Web is the only medium enabling cost effective one-to-one marketing. Customers turn to a company’s Web site to learn more about a product and ask questions. They expect to find answers quickly, be it through content available on the site or through email inquiries. If the company is not equipped to deal with such inquiries it will directly affect the customer’s brand loyalty. Customer-retention efforts represent a bargain compared to the price tag of acquiring new customers, which is estimated to be about seven times more expensive. Chief executives recognize this fact and, according to Gartner, will spend more than $76 billion on CRM software and services by 2005. Studies have shown that higher income customers (i.e. Internet users) are less likely to “chase a brand”. 33% are influenced by friends and would buy a different brand if it were recommended by a friend (or if one brand was not recommended because of a bad experience). Word of mouse is very powerful - if a company does not respect its customers online and provide the customer with a negative or non-optimal experience, it will have a ripple effect.


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Analysis

Customer Respect is a blend of the practice of customer-focused policies, a company's openness in terms of personal data treatment, responsiveness to inquiries, and the general attitude experienced by a customer when interacting with a company on its Web site. This study will reveal how well the Airlines & Travel industry has adopted a customer-centric approach for interacting with customers online. When computing a company’s Customer Respect Index (CRI), multiple elements of Customer Respect are being evaluated. Those are:

1. Privacy

2. Transparency

3. Principles

4. Responsiveness

5. Simplicity

6. Attitude

Throughout the following pages we will look at how well the industry as a whole did in all of those categories.

Methodology Enhancements To reflect changing public sentiment and increased sensitivity to privacy issues we have refined our scoring on privacy policy issues. Even if the placement, legibility, and content of the privacy policies have not changed, you may notice a slight change in a company's score. As evidenced (for example) by a study conducted by the Annenberg Public Policy Center at the University of Pennsylvania3, the consumer's understanding of the value of privacy policies merits considerable reflection. The refined scoring also reflects the increased awareness and unease about the capture and potential misuse of personal data. In general, users were confused about the use of their personal data, mainly because of difficult to understand privacy policies.

3 Americans and Online Privacy, Annenberg Public Policy Center, University of Pennsylvania, 2003


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Privacy The treatment of personal data is a key element of Customer Respect. How can a customer trust a company, if it is not honest and up-front about how personal information might be used? Even if a company is not collecting any personal data on its Web site, it is just good business to tell the customer about it.

During the first six months of 2003 we audited over 450 different corporate sites and found that 17.7% still don’t post a privacy policy. Various other studies have shown that users are concerned about their online privacy and often will turn away from a site if they are unsure of how their personal information is being collected and used.

It is very encouraging to see that all of the reviewed Airlines and Travel Firms have posted a privacy policy on their site to educate their customers about personal data collection and use. 25 percent of the Hotels, Resorts & Casinos are still without a policy document, however. Among all the companies in this study, 10% don’t post a privacy policy. Those companies should pay special attention to this issue.

Transparency A transparent privacy policy that clearly states how personal data is being treated is a key component of Customer Respect. A policy should be easy to read and to the point. Often policies are written in a cumbersome style and use too many legal terms that might satisfy a lawyer but are confusing for the customer. Privacy Policies written in plain English are best received by customers and consequently usually receive the highest score. The Transparency scores are very good for the Airlines and Travel Firms. They are among the best across the 12 industries we’re currently tracking. The Airlines took a slight lead with an average Transparency CRI of 8.1, versus 7.9 for the Travel Firms. The Hotels, Resort & Casino companies achieved an average of 7.0. Among all 31 companies reviewed for this study, only Orbitz and Southwest Airlines earned a perfect CRI of 10 for very clear and user-friendly privacy policies.


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Principles To achieve a high Principles rating, companies must protect personal data submitted to them online and provide the customer with options and flexibility for how she wants that data to be used. It is not very respectful to collect personal data without explaining its use and then bombard the customer with promotional emails she never requested or agreed to receiving. Companies with high Principles CRI follow those ethical guidelines and also respond to customer inquiries. Good etiquette translates to more satisfied customers and better return on investment. The Travel Firms are the most respectful companies, when it comes to the treatment of their online customers’ personal information. The ten companies in this sector achieved a respectable Principles CRI average of 7.4. This is well ahead of the other two sectors, which finished with 6.2 (Airlines) and 6.3 (Hotels, Resorts & Casinos). Only Wyndham Hotels & Resorts earned the highest Principles mark of 10. The second best score of 9.5 was achieved by Hyatt Hotels & Resorts.

Responsiveness Whether online or offline, the speed of response to customer inquiries is indicative for how a company values customer interaction and communication. The Responsiveness index rates how quickly a company responds to customer inquiries. The companies reviewed for this study achieved the best Responsiveness rating among all sectors we currently cover. Both the Airlines and Travel firms responded to all customer inquiries submitted via their Web sites. This is in stark contrast to the 30-40% non-response rate we see on average. The Hotels, Casinos & Resorts performed almost as well, with a Responsiveness rate of 91%. Compared to the last study conducted in March of 2003, they improved quite significantly, considering a non-response rate of 35% back then. The average CRIs in this category are: 6.9 for Airlines, 8.2 for Travel Firms, and 6.3 for Hotels, Resorts & Casinos.


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48% of the 31 companies in this study issued Autoresponders to acknowledge receipt of our online inquiries. Of those, 86% followed them up with a full response and 14% didn’t keep their promise and never provided a customized reply to our inquiries.

Simplicity The Simplicity Index rates how well designed a site is in terms of ease of use for the visitor. Customers invest valuable time in visiting a site and should be gratified with easy navigation. Companies should make it as easy as possible for customers to find key content, such as product, investor relations or customer service information. Equally important is the ability to locate contact information quickly and being able to send an inquiry to the company, ideally via a simple email form. Simplicity continues to be the highest scoring CRI category across all industries we cover. The Airlines, Travel Firms, and Hotels, Resorts & Casinos are no exception. The Travel Firms achieved the highest average Simplicity CRI at 8.6, closely followed by the Airlines at 8.4. The Hotels, Resorts & Casinos came-in 3rd with a Simplicity rating of 7.7. Perfect Simplicity CRIs of 10 were achieved by Northwest Airlines, Delta Air Lines, and Obritz. To improve the ease of use of Web sites, companies should take several components into consideration that all directly impact the site’s Simplicity rating:

• How easy is it to locate key information?


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• Is the privacy policy easy to locate? • Is the collection and use of personal data easy to deduce? • How quickly can contact information be found and how easy is it to send an

inquiry? Providing keyword search capabilities on the site also supports customers in locating specific information (this is particularly relevant for content-rich sites). Currently, 42% of the 31 companies in this report provide keyword search capabilities on their sites.

Attitude The factors measured by the Attitude Index contribute how a customer feels about the company having visited its site. It examines a company’s treatment of its customers, its tone of communication, how it treats personal data, and the efficacy of customer service evidenced by its response to customer inquiries. The Travel Firms are the ones with the best Attitude towards their online customers. The ten companies in this segment earned an average Attitude CRI of 8.1. The Airlines follow half a point behind with an average CRI of 7.6. Mainly due to the fact that three of the Hotels, Resorts & Casino companies don’t provide a privacy policy on their site, the average Attitude CRI for the 12 companies in that segment is 6.5. An Attitude CRI of 10 was earned by four companies: Northwest Airlines, Delta Air Lines, Orbitz, and Expedia.


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Industry League Tables By CRI Ranking

Airlines

F100

0 Ran

k

Company Name Over

all

193 Northwest Airlines Corporation 9.1 628 Alaska Air Group, Inc. 9.0 145 Delta Air Lines, Inc. 8.8 104 American Airlines 7.4 132 UAL Corporation 7.3 663 America West Holdings Corp. 6.9 262 US Airways Group, Inc. 6.8 220 Continental Airlines, Inc. 5.8 306 Southwest Airlines 5.7 Industry Average 7.4

Travel Firms

F100

0 Ran

k

Company Name Over

all

Orbitz 9.7 Expedia 9.5 Travelocity 9.0 Hotwire 8.8 Priceline 8.8 Hotels.com 8.3 Cheaptickets.com 8.2 WorldTravel BTI 6.4 GetThere 6.3 Carlson Wagonlit 5.3

Industry Average 8.0


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Hotels, Resorts & Casinos

F100

0 Ran

k Company Name Ov

erall

702 Wyndham Hotels & Resorts 9.0 175 Marriott International, Inc. 9.0 354 Park Place Entertainment Corporation 8.5 386 Harrah's Entertainment, Inc. 8.5

Hyatt Hotels & Resorts 8.4 Radisson Hotels & Resorts 7.1

412 Starwood Hotels & Resorts Worldwide, Inc. 6.1 416 Hilton Hotels 5.8 397 MGM Mirage 5.8 937 Boyd Gaming Corporation 4.3 603 Mandalay Resort Group 4.3 936 Trump Hotels & Casino Resorts, Inc. 4.3 Industry Average 6.8


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Methodology

Overview The primary goal of measuring online Customer Respect is to create and maintain a reference-able body of research that measures how a company treats its customers online. In creating this report, we needed at first to determine those factors that are measurable and that portray a company’s attitude towards the customers it reaches through the Internet. Through interviews with users and multiple site visits across a range of web sites included in, and outside of, the scope of this report, six main elements of customer respect were identified. These are:

o Privacy o Transparency o Principles o Responsiveness o Simplicity o Attitude

These indicators were selected because they mirror offline respect guidelines, in aggregate they comprehensively measure a company’s stance on respecting its customers, and also because they are understandable and identifiable as critical guiding principles. These principles, when not appropriately put into practice, cause damage to the company and create great frustration for the customer. Each element contributes to the customer experience and overall they combine to generate an environment of customer respect. Customer Respect, as defined by this report, measures an organization’s treatment of the individuals with whom it interacts. In this instance, it is solely the companies’ online performance that is being measured. The six Customer Respect elements each comprise multiple measurements that combine to provide a single measure for each individual element. In defining the algorithms to calculate the Customer Respect Index (CR Index) we determined that the latter five elements (i.e. all except privacy) constitute the core of the CR Index online. In addition to the 5 core elements, Privacy is awarded a score as a separate element. Parts of a company’s privacy policy, its language therein, or its accessibility, all have impact on the other measures whereas the Privacy Index is solely based on the privacy policy itself. In each of the six measured elements a number of factors are taken into consideration. The factors are scored and weighted so that each element carries an equal value. Each company has been given a rating for each of the six elements and an overall Customer Respect Indicator. The Customer Respect Indicator is the average score taken from the company’s performance across the five core elements. The score does not include the Privacy element. A company with a perfect CR Index scores 10.0. The possible score for each element, and the also for the composite CR Index, ranges from 0 to 10. It is important to understand that it is a company’s relative score that counts. This means that it is the score relative to the average of the score achieved by all the


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companies in this report, and more specifically relative to the other companies in a given sector that indicates how well a company performs. Where possible, companies are given an Industry Customer Respect Indicator. This is done using exactly the same method as the main Customer Respect Indicator, but measuring the company within its own industry sector only.

Research Methods The research for this study was conducted in September of 2003. Each company received two online inquiries. In the detailed analysis of each web site, the following aspects were considered.

o What are the first impressions taken from the site? o Is there a privacy policy? o What is the tone of the privacy policy? o Where is the link to the privacy policy? Homepage? Other? o How well worded and structured is the policy? o Is personal data used for marketing purposes? If so, by whom? o What is the company’s opt-in / opt-out policy? o Is the policy information clearly worded and explicit? o Are cookies used on the site? o Is there a full explanation about cookie technology and how cookies can

be disabled? o Is the site easy to navigate and is key information simple to find? o Is there a contact link directly from the homepage? If not, is it easy to

locate? o Is it possible to submit an online enquiry? o Where it was possible to communicate with the company either through

an email link or an email form the following items were recorded. o What means of contact are provided? o Online form? o Email address? o Offline contact? o If an email form is provided, is it easy to use? o How many mandatory fields are requested? o Are the mandatory fields clearly identified? o Are there any irrelevant or non-context sensitive fields in the email

form? o What is the overall number of fields of information collected? o Did the company issue an auto-responder? o Was the auto-responder followed-up and what was the time delay? o Did the company provide a full email response and what was the lapsed

time? o Was the email response personalized, relevant or helpful? o Was the tone engaging, formal or dismissive

Documents

Online Customer Respect Study – Airlines & Travel Industry · Online Customer Respect Study – Airlines & Travel Industry The Web is the only medium enabling cost effective one-to-one