1. My travel experience onshort haul ights

2. A word of warningIm not an airline expert witha long lasting track record ofoperating an airline. Im just aknowledgeable customer ofthe airline industry. 3. Introduction Dr. Patrick Sthler, Partner@uidminds the businessinnovators Expert on Business ModelInnovation Passion for customer experience& authenticity 196 cm Passionate Mystery Shopper 66 Managing Director of InternetFirm Experteer (90 FTEs) Born, when the Boeing 747 madeits maiden ight First website 1996, digerati eversince CO2 footprint for ights = 9.421t(not sustainable) 4. 3 disciplines to master air travel Running Yoga to reach to store my self connectinginto the seat and ights to learn to accept what I cannot change Weight Lifting to bring luggage on board so it does not get lost 5. 1Thesis: Airlines are Masters of TransportEconomicsnot of Customer Experience 6. Follow me on a booking trip1st moment of truth for airlines ZurichHamburg 7. Wow! 3 differentprices for the sameflight (same plane@same time) 8. 50% difference in price for the same flight. That confuses me!400350300 +50%250200150100 50 0 SwissSwiss Lufthansa eBookers eBookers eBookers nalyCenterbooked 9. 2Thesis: Airlines have trainedcustomers to huntfor price bargainnot for value 10. Lets take a look whatGoogle (or the people)think about airlines Cheap is associated with air travel. Bad for the industry 11. Lets take a look whatGoogle (or the people)think about cheap = travel 12. 3Thesis: Airlines have used IT to maximize yields. Now, customerstake revengewith systems you cant beat 13. In the past you had the IT power to run sophisticated yield managementsystems. You had the power to do all the optimization of your yields 14. Times are changingThe power of the cloudwill always be larger thanyour IT systemThats you 15. Thesis: The digital and mobile3customer is aknowledge customerPlease treat her/him this way 16. Times are changing: Thecommon customer has access tomore computing power than youwill ever have. Be prepared.Why should thecustomer trust yourapp? 17. 4Thesis: Airlines will becomecommodities unless they create business modelsthat customers loveand that are difcult to copy 18. What will happen when youloose your direct sales channel?What will happen to your protsif customers outsmart your yieldmanagement systems? 19. Why shouldcustomers be excited about you? 20. Why are customerwilling to pay so muchfor a coffee fromStarbucks? 21. Why so little forairtravel? Is it reallyonly the competition? 22. Would you dare t say this? oWhbe the a at would nswer ofyour boss?Well, I know we are in acommodity market where theprice is key, but I believe we cansell the good for 10x as muchas before. 23. Is it just their brandor George Clooney? 24. The magicformular forCustomerutilitygreat rmscustomer + valuepricecompany + prot costs 25. To develop a great business model, is toDo the rightthingsandnot to do things right The airline industry is the champion of optimization 26. What is abusinessmodel? 27. Are youaware ofyour DNA?!The business model is theDNA of your business 28. The business model givesmeaning to your employeesand customers 29. 1. What value/ benet do wecreate for whom?2. How do we do it?3. How do we earn money?4. What values do we pursue? 30. Components of a business model Value PropositionWhat value or benet do we create for ourcustomers and partners?Value ArchitectureHow do we create the value?Revenue ModelHow and with what do we earn money?Values/ CultureWhat values do we pursue? 31. Value Proposition/ customerWertschpfungsarchitektur customersWhere is your Value Proposition/ KundenAngebot Distributionskanleuniqueness?? Kunden Wie sieht mein Angebot WhoWie erreicht das Angebot are our Wer ist mein Kunde? aus?meine Kunden? Welchen Job customers?bernehme ich fr What job do we solve meinen Kunden? Wertschpfungskette for our customers? Was sind die wichtigsten Schritte der Aktivitt 1 Aktivitt 2Aktivitt 3 Aktivitt 4Kunden Aktivitt 1 Nutzen Wertschpfung? Welchen Nutzen stifteich fr meinen Kunden?value proposition Welchen Nutzen stifteKernfhigkeiten Partner ich fr meine Partner? Welche Kernfhigkeiten What value do we create Welche Partner brauche ich?bentige ich? for our customers? What value do we create for our partners? Ertragsmodell Kostenstruktur Ertragsquellen Die Kostenstruktur wird durch Womit verdiene ichdie Wertschpfungs-architekturGeld?festgelegt.Kultur/ Werte FhrungsstilBeziehungskulturWerthaltung Welchen Fhrungsstil Wie gehen wir Welche Werte prgen uns? pege ich?miteinander um? 32. A good business model is allabout being different 33. And this how theairline industrylooks to meBut if everybody is doing thesame, you have to nd a newbusiness model 34. 5Airlines can learn from rms thathave customer value& trust build intotheir business model and thereby escaped competition 35. Optimal is when differentbusiness models exists and allhave devoted customers 36. No hiddencharges atAmazon. 37. Building trust byhaving no specialdeals. 38. Trust build intotheir businessmodel 39. Transparent pricingin the telco industry= innovationSwisscom Mobile Simplied price structure. 0.50 CHF per call for up to 1 hour. Still more expensive then competitor for average call Simplied general terms & conditions (GTCs). No mandatory contract duration Result: greater trust and growing market share for the incumbent 40. Swiss railway (SBB) One price regardless of time No prebooking, No reservation Taktfahrplan (rigid time table with planable departure times like every 30 minutes) Actually pretty slow trains; No high speed trains Result: Highly trusted 41. Business model innovationis all about breakingaccepted rules. Beprepared for opposition.Scary to be this nail. Wherewill the hammer hit nexttime? 42. More Information onhttp://blog.business-model-innovation.comDr. oec. Patrick Sthleruidminds GmbHPatrick.Staehler@uidminds.chwww.uidminds.chblog.business-model-innovation.com 43. Airlines: Master of Transportation Economicsbut not of customer experienceThe need for business model innovation17th International Airline Symposium, SeattleOctober 6th, 2011Dr. oec. Patrick Sthler