AAA Airlines Customer

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AAA Auto Club South

Problem Statement

Classic Airlines needs to focus on the opportunities available to them in order to increase profits and sales through a new and improved customer rewards program. By performing an environmental analysis, using the SWOTT, SLEPT or PESTLE model (Freiwald, 2007, p. 1-2) the company will be able to identify internal and external forces that can have an affect on the organization and airline industry as a whole. Using these models will also allow the company to conduct effective surveys to enable them to become the voice of the customer (Freiwald, 2007, p. 1) turning its attention to their needs and by revising its current CRM system to fit a marketing strategy appropriate for accomplishing the company's goals and objectives. The company must deliver services desired by the customer's or they will continue to lose profits and market share in the airline industry. Classic Airlines must also recognize the needs of all employees, both union and non-union, and perhaps implement an incentive program which could help boost moral and motivation.

Company Overview

Part of the American Automobile Association, AAA Auto Club South's (ACS) has an image that is recognized internationally. ACS's purpose is to provide unsurpassed service to every customer; treating the members the way you want to be treated by providing courteous and friendly service (AAA Auto Club South, 2006). They are dedicated to attracting and retaining quality employees; therefore, they use various motivational strategies and reward systems to keep the employees enthusiastic about work. Although, the company's compensation package is very competitive, they offer various incentives and reward programs. The purpose of the additional incentives and rewards is to help the company achieve its goals by attracting, motivating, and retaining highly qualified support staff and salespeople.

 

Keys Findings-Employee Incentives

Beneficial incentives offered at ACS include paid holidays, vacation and personal time, health, dental and life insurance for the employees and their families and flexible work schedules in some departments. In addition, the company started experimenting with educational assistance by providing employees $500 per year as an opportunity to improve their work skills and upgrade their knowledge in an effort to develop their career within the organization. Due to the increasing interest and efforts of the employees the education assistance was raised to $1000 per year (AAA Auto Club South, 2006).

One of the monetary reward programs offered at AAA is the quarterly incentive bonus, which is based on departmental goals and not the individual. This reward system was implemented to promote teamwork. Another reward which is awarded annually is the Extraordinary Performers Bonus (AAA Auto Club South, 2006). This program focuses on goals set by the employee and his or her ideas which can be implemented to improve departmental practices and processes, possibly reducing costs. It urges employees to think outside the box and look beyond their assigned job duties. The amount awarded to the employees nominated for this award is based on the company's success in meeting the organizational goals for the year. ACS also offers non-monetary incentives to motivate employees and help them build feelings of confidence and satisfaction. With non-monetary incentives employers can reward employees for a job well done through opportunities and recognition instead of cash (Ballentine, Kepner, McKenzie, & Wysocki, 2003). According to Ryan (n.d.), consistent employee recognition is a key factor in retaining top performing workers while allowing management to achieve department and organizational goals. To recognize successful employees, ACS strives to emphasize on the success instead of dwelling on the things that went wrong. Managers deliver recognition and reward openly and publicly and they are tailored to be unique for the people receiving them. Some of the non-monetary rewards ACS offers are t-shirts, mugs, and certificates. Many people feel these awards have memory value because of the continued meaning they have long after a cash award would be spent. They also have trophy value because it can be shown off to others. Although, non-monetary rewards are less costly than cash awards, they still provide the same level of motivation for performance improvements.

 

Key Findings- Customer Benefits

ACS offers over 20 different services and benefits to its customers which include membership, travel, insurance, automotive, and financial services (AAA Auto Club South, 2008a). With the AAA membership, customers can save on many expenses such as dining, restaurants, attractions, car rentals, shopping venues, and hotels. ACS members can also save money when purchasing a new or used car through the Car Buying program which includes various dealerships that offer low, no haggle pricing (AAA Auto Club South, 2008b). Members can also receive discounts on auto repairs by visiting any AAA Approved Auto Repair facility.

Through a partnership with Bank of America, the company offers the AAA Cash Rewards MasterCard, AAA Platinum Plus Visa, and the AAA Rewards American Express (AAA Auto Club South, 2008b). Its Platinum Plus Visa gives customers the opportunity to receive up to a 5% gas rebate when paying at the pump. The AAA WorldPoints Visa allows customers to earn a point for every dollar spent on retail purchases and double points on gas purchases redeem them for any reward, from travel to cash to merchandise. This card also has no blackout dates for travel points redeemed (AAA Auto Club South, 2008b).

 

Employee Success

As a result of the various motivational strategies practiced by AAA, the company experienced a reduction in employee dissatisfaction, complaints and turnover, a decrease in customer complaints and dissatisfaction, and an increase in company growth and profits. Due to the increased employee motivation the overall work environment was friendly, supportive, and cooperative, with staff working efficiently and effectively. As a rule, motivational levels in employees tend to fluctuate and individuals are challenged to perform their work at an optimal level at all times. Therefore, the motivation programs helped to not only boost employee morale but also encouraged intrinsic motivation which resulted in optimal output.

 

Customer Success

ACS's dedication and unsurpassed service to its members has resulted in a membership base of over four million members. The company is continuously looking for ways to make improvements to better serve its members, giving them the freedom and safety to travel. By providing members with a peace of mind, total satisfaction, and exceptional value, ACS has devised a club wide goal to achieve 7 million members by 2017 (K. Brockway, personal communication, June 20, 2008). ACS will attain this goal through its relentless commitment to customer satisfaction and the passion to make the AAA membership indispensable (AAA Auto Club South, 2008c).

 

What can Classic Airlines Learn

Classic Airlines can use some of the same strategies applied by ACS. Just as ACS offers various benefits that appeal to its millions of members, Classic can look at adding benefits to its Classic Rewards Program, such as discounts to restaurants and shopping venues. The company can perform surveys to pinpoint the services customers would like to see offered by the airline that are more geared towards their specific needs or age groups. This would be a great opportunity for them to show their dedication to customer satisfaction and increase the customer base.

The airline could also look at collaborating with a major financial institution, as ACS did with Bank of America, to offer extra reward points or flier miles to customers every time they use that particular credit card when purchasing tickets. Other airline carriers have already been successful with this type of partnership. For example, Chase offers the Southwest Airline Rapid Rewards Visa Signature Card and the British Airways (BA) Visa Signature Card (Chase, 2008). With the Southwest card, members can earn double reward dollars on flights or vacation packages through the airline carrier (Chase, 2008). With the British Airway card, members earn 20,000 bonus BA points after the first purchase, along with other savings such as the opportunity to receive free companion tickets from the airline (Chase, 2008). This would be a good incentive for Classic to offer its members in hopes of gaining their loyalty and increasing membership and profits.

With the employees, classic should implement a reward program, monetary or non-monetary, that promotes teamwork and boosts moral. This program can focus on the individual goals of the employee set by the employee and his or her ideas which can be implemented to improve departmental practices and processes, possibly reducing costs. The company can also involve the employees in the beginning phases of creating a program to find out what motivates them. This system can encourage them to go above and beyond their assigned job duties.

References

  • AAA Auto Club South. (2006). AAA Auto Club South Employee Handbook. Tampa, FL: Human Resources.
  • AAA Auto Club South. (2008a). Why join AAA? Retrieved June 21, 2008, from https://www.aaasouth.com/20reasonswhy.asp
  • AAA Auto Club South. (2008b). Financial: AAA credit cards. Retrieved June 21, 2008, from http://www.aaasouth.com/finance.asp
  • AAA Auto Club South. (2008c, May/June). AAA member newsletter. AAA Going Places. Retrieved June 20, 2008, from http://www.aaasouth.com/current_issue/home.asp
  • Ballentine, A., McKenzie, N., Wysocki, A., & Kepner, K. (2003, April). The role of monetary and non-monetary incentives in the workplace as influenced by career stage. Retrieved June 21, 2008, from http://edis.ifas.ufl.edu/BODY_HR016
  • Chase. (2008). Airline rewards credit cards. Retrieved June 18, 2008, from http://www.chasecreditcards.com
  • Freiwald, T. (2007). Environmental scanning & marketing acronyms. Received May 29, 2008, from MBA/570- Sustainable Customer Relationships.
  • Ryan, S. (n.d.). Rewards and recognition. Retrieved June 21, 2008, from http://edweb.sdsu.edu/people//ARossett/pie/Interventions/incentivesrewards_2.htm
  • University of Phoenix (2008). Scenario: Classic Airlines [Computer Software]. Retrieved June 17, 2008, from University of Phoenix, rEsource, Simulation, MBA/570- Sustainable Customer Relationships Web site.

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