Digital Transformation at AirAsia
What I learned about Customer Experience (CX) and Artificial Intelligence (AI) during my Summer Internship
In this article, I will delve into Customer Experience (CX), a major part of digital transformation. Based on my internship experience at AirAsia, I’ll showcase how the airline company is leading the industry with a focus on CX and highlight the three areas that the company is focusing on to transform itself digitally: 1) Artificial Intelligence (AI), 2) Facial Recognition, and 3) Net Promoter Score (NPS). I conclude with a recommendation for the fusion of CX and AI and introduce a company that is currently working on AI-powered NPS.
According to The Enterprisers Project, "Digital transformation is the integration of digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. It's also a cultural change that requires organizations to continually challenge the status quo, experiment, and get comfortable with failure”.¹
By 2023, spending on the technologies and services that enable digital transformation worldwide is expected to amount to 2.3 trillion U.S. dollars.²
According to a research project by MIT scientists, out of the nine elements of digital transformation, the first and foremost is transforming the Customer Experience (CX).³ CX builds upon customer touchpoints—any time a potential or current customer comes in contact with your brand—before, during, or after they purchase something from you.⁴ For example, CX for an airline is more than just booking the ticket: the touchpoints include the website/counter for booking the tickets, the online ratings and reviews, the customer service helpline, the flight boarding process, the in-flight journey, luggage handling, and the customer survey post the journey. CX is enhanced by understanding the customer journey and is regarded as the most crucial brand differentiator when the company wants to distinguish itself from its competitors. CX plays a major role in altering how the customer perceives the product and the brand.
In fact, Global spending on CX technology is forecasted to increase from around 500 billion U.S. dollars in 2019 to over 640 billion by 2022.⁵
The credibility of CX can be acknowledged to the growing popularity of internet-connected consumer electronic devices, which allows companies to have more information on consumer experiences, needs, and preferences than ever before. During the summer of 2019, I had a fortunate chance of interning with an airline company, AirAsia, based out of Kuala Lumpur, Malaysia.
AirAsia has been hailed as the world's top low-cost airline for the 11th consecutive year, according to Skytrax.⁶ With over 18,000 employees⁷ and estimated revenue of $2.5 Billion in 2018.⁸
AirAsia is expanding strategically into new industries such as Travel, FinTech, and Food/Beverage, creating an end-to-end ecosystem and capturing customer touchpoints to build seamless and outstanding customer experience. AirAsia is leading the aviation industry spearheading the digital transformation with a focus on Customer Experience through the following efforts-
The company has unveiled an Artificial Intelligence (AI) powered Chatbot called AVA, or AirAsia Virtual Allstar– as part of an update to its website and mobile apps. Through AVA, the company wants to offer information to its customers 24/7. AVA assists through a live chat, responding to inquiries instantly, and is available in eight languages. Shifting to an AI chatbot helps in several ways: (a) Keeping up with the trends— being present on messaging platforms. (b) Improved customer service— leveraging 24hrs availability of chatbot. (c) Monitoring consumer data & Gaining Insights— collecting feedback and tracking the purchases by users. (d) Better Lead Generation— assisting consumers through the buyer journey and determining both qualified and unqualified leads. (e) Easier Approach to Global Markets— chatbots can cater to customer care problems in multiple languages 24/7, 365 days a year. (f) Cost Savings— reducing operational costs of setting up customer care centers and hiring employees in different regions to cater to global customers.
AirAsia leveraged Facial Recognition technology—a form of biometric identification—to develop FACES (AirAsia’s Fast Airport Clearance Experience System). FACES is used as a part of customer identity verification during the boarding process to clear security and board the flight seamlessly.⁹ The system uses cameras to identify individuals, reducing the need for guests to show or scan their travel documents and aims to speed up airport processes like check-in, baggage drop, and boarding. This will improve the boarding process and transform airport experience for the guests— reducing the amount of time it takes for customers to board the aircraft and allowing the airplanes to turn around and get customers to their destination in a shorter time.
AirAsia is using Net Promoter Score (NPS)- a customer satisfaction benchmark that measures the likelihood a customer will recommend your business to a friend.¹⁰ NPS captures post-flight user feedback by reaching out to travelers via email/ text messages and seeking information pertaining to the touchpoints throughout the customer journey. In simple words, NPS sends out a set of questions to the traveler where each question can be answered on a scale of 0-10 (0 being the worst and 10 being the best). Based on the responses of the traveler, the scores are calculated. This allows AirAsia to gather and analyze customer pain points and narrow down improvement areas.
While AirAsia is already on its path to embracing the digital transformation through the efforts mentioned above, the efficiency of CX could be further enhanced by the synergies of multiple technologies.
For instance, there are two main limitations to using the NPS: encouraging a healthy response rate from customers so that the company has enough data to accurately interpret the customer journey, and uncovering the root-cause of any customer issues by asking probing questions. With the advent of Artificial Intelligence (AI), I believe that the latter challenge can be tackled by intelligently transforming the NPS Surveys. The solution could be an AI-backed NPS Survey form which would be trained to ask subsequent questions from the user to identify the root cause of the problem and to understand why the customer felt a specific way. The AI-powered solution would not only collect metrics but would also allow companies like AirAsia to delve deeper into the customer sentiment through data analytics and machine learning.¹¹ A UK based company called Wizu could be a potential partner for AirAsia to begin exploring this solution. Wizu’s Conversational Customer Surveys create engaging AI-powered surveys to help measure and improve customer experience by going deeper into the reasons behind the score through a conversation with the customer. Wizu’s AI generates follow up questions depending on the responses to give a more humanly feel to the conversation.¹²
While interning at AirAsia I learned that with the right leadership even a giant company operating in a legacy industry could move as swiftly as a startup.
Disrupting a large organization is difficult but it’s not impossible. The value of digital transformation is all in how the companies apply it. With strong leadership backed by the motivation to innovate, companies like AirAsia could leverage emerging tech such as Artificial Intelligence and Data Analytics to ascend their digital transformation to the next level.
References:-
¹ https://enterprisersproject.com/what-is-digital-transformation
² IDC, & Statista. (October 28, 2019). Digital transformation market revenue worldwide from 2017 to 2019 and in 2022 and 2023 (in trillion U.S. dollars) [Graph]. In Statista. Retrieved January 30, 2020, from https://www-statista-com.ezproxy.babson.edu/statistics/870924/worldwide-digital-transformation-market-size/
³ https://sloanreview.mit.edu/article/the-nine-elements-of-digital-transformation/
⁴ https://www.surveymonkey.com/mp/identify-customer-touchpoints/
⁵ IDC. (August 6, 2019). Spending on customer experience (CX) technologies worldwide in 2018, 2019 and 2022 (in billion U.S. dollars) [Graph]. In Statista. Retrieved January 30, 2020, from https://www-statista-com.ezproxy.babson.edu/statistics/1040257/worldwide-customer-experience-technology-spending/
⁶ https://www.worldairlineawards.com/worlds-best-low-cost-airlines-2019/
⁷ AirAsia. (June 24, 2019). The number of employees working for the AirAsia group from the fiscal year 2014 to 2018 [Graph]. In Statista. Retrieved February 21, 2020, from https://www-statista-com.ezproxy.babson.edu/statistics/1031091/airasia-number-of-employees/
⁸ AirAsia. (June 24, 2019). Revenue of AirAsia from the fiscal year 2014 to 2018 (in billion Malaysian ringgit) [Graph]. In Statista. Retrieved February 21, 2020, from https://www-statista-com.ezproxy.babson.edu/statistics/1030523/airasia-revenue/
⁹ https://support.airasia.com/s/article/F-A-C-E-S-Fast-Airport-Clearance-Experience-System?language=en_GB
¹⁰ https://blog.hubspot.com/service/what-is-nps
¹¹ https://chatbotsmagazine.com/how-artificial-intelligence-can-transform-your-nps-surveys-8ea9bc000e8b
¹² https://www.wizu.com/what-we-do/net-promoter-score/
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