Airlines have been the butt of customer service jokes for years. Deservedly so. Now they’re fighting back, with software.
This week, JetBlue announced a large investment in Gladly, a Silicon Valley startup. The company makes a software suite that merges digital customer experiences into one customer service screen.
It’s an old economy makeover with big implications for investors.
We shouldn’t be terribly surprised that it begins with software. Gartner Inc., an information technology research consultancy, last year said the annual worldwide market for customer relationship management (CRM) software reached $26.3 billion in 2015, up 12.3%.
Its views on the future of CRM were more prescient. Gene Alvarez, Gartner’s managing vice president, said that by 2020 customers will demand that companies catalogue their experiences and use that data to improve future interactions across all digital media.
That sounds a lot like what JetBlue is trying to achieve.
It will use Gladly software to keep track of user interactions on phone, email, text message or Facebook Messenger. Eventually, the system will include Twitter and a proprietary JetBlue app, too.
It is all aimed at avoiding the annoyance of forcing customers to retell their grievance to multiple customer service representatives. It may seem like a small thing, but customers become enraged when they are forced to state the same problem over and over again.
By the end of next year, JetBlue hopes to have the technology across most channels. It will start with its 3,000 customer service phone reps. Deployment is even planned for flight attendants and gate agents.
An airline Down Under is taking this one step further. A pilot program at New Zealand Air will outfit flight attendants with Microsoft HoloLens augmented-reality headsets. In addition to improving facial recognition, special software will detect if the passenger is anxious or agitated.
Flight attendants wearing gear that looks like crash helmets might ratchet up stress levels. Just a guess.
Appearances aside, the idea is rooted in remembering customers and using that information to serve them better. It’s something the airline industry has historically failed to do well.
It comes at a time when airline load factors are falling and the industry is undergoing one public relations nightmare after another. In early April, a video of a United Airlines passenger being forcibly dragged from a flight went viral.
It was tough to watch. It was harder to spin positively.
Software Can Help
The entire industry is in the process of a software revolution. It’s all part of this new era of technical innovation I call the New Gilded Age.
Like the era of Rockefeller, Morgan and Carnegie more than a century ago, rapid advances in technology are making anything possible. Business models are being remade. Investors are growing rich.
Several months ago, one major airline announced it would provide real-time tracking for every passenger bag using tiny RFID tags. The technology, and commoditization, make it economically viable for the first time ever. It’s a game changer.
Others are engaging in major makeovers of their ticketing and reservation systems. Overbooking, and its ugly sidekick, bumping, are at the heart of the problem with air travel. Airlines overbook because their lifeblood is the load factor.
New software will help them increase loads while providing a better understanding of passenger flows and habits.
Finding the companies that make the New Gilded Age possible is a big part of what I do for my Pivotal Point Trader members. For airlines, the obvious candidates are makers of digital tags and software platforms, but there are other winners, too.
This is the best time to be an investor. Something big is happening.
Best wishes,
Jon Markman
