Convenience, innovation and cost management are the drivers behind the mobile strategy of German airline Lufthansa. The firm’s director of global e-commerce and mobile services, Marcus Casey, shares his views on the importance of mobile in his firm’s strategy.

Lufthansa’s commitment to developing a successful mobile service offering is best illustrated by the fact that, only 18 months after launching its first mobile portal it redesigned it from the ground up to take into account what had been learned in the first year and a half of the site’s operation.

The portal had originally been optimised for more than 2,000 mobile handset models, says Marcus Casey, the man in charge. Some months after the launch at the end of 2007, he says, Lufthansa realised that 80 per cent of customers that were using the mobile site were doing so from either an iPhone or a Blackberry. Instead of making do with what it had already invested in, the German airline started again with these smartphones at the centre of its vision.

“Mobile is something that you have to test, you have to constantly look at the numbers, learn from those numbers and keep optimising the service,” he says.

The portal’s central function is to extend online ticketing and boarding processes to the mobile phone. Casey relates that one customer booked a €5,000 itinerary that took in nine airports, all from his mobile phone, in under eight minutes. Now passengers can check in from their phone, select their seat, receive their boarding pass and board the plane, all without the need for interaction with ground or aircraft staff.

Boarding cards can be sent to handsets either as an email containing a 2D QR code, or as a text link that takes the user to the portal. If the customer is checking in on a PC, they can request that the boarding pass be sent to their mobile phone.

Perhaps unsurprisingly the airline’s most enthusiastic consumers of these technological options are its business customers. And, says Casey, when they see their fellow travellers boarding the flight using their mobile phone rather than a piece of card, they want to know how they can do it. He characterises this as a type of enterprise-level viral marketing.

It’s not all about making the customer experience smoother and more sophisticated, though. “One of the drivers was to cut our processing costs,” Casey says; less agents are needed to conduct ticket sales, less ground staff are required to manage check-in procedures. It is, he says, a natural extension of the functionality that the firm built into its website. “We have recreated the entire booking path that we have on our .com site for our mobile portal,” he says.

One of the most oft-repeated catchphrases in the airline industry, Casey reveals, is “ancillary revenues”. And the firm recently ran a trial which saw marketing messages from a range of its partners delivered to handsets at the point of boarding. Why not target customers with his own marketing material, though? All of the mobile activities that the airline undertakes act as marketing for Lufthansa, he says, because even delivering other companies’ messaging in this way shows the airline to be an innovator. “That’s our branding message,” he says.

Casey wants to position Lufthansa to offer mobile commerce services as well, selling travel insurance or hotel  bookings along with tickets for flights. “A lot of firms are just using mobile to drive brand recognition and provide entertainment,” he says. “We’re very blessed because we can offer content of value along the entire service chain. There are many reasons why mobile is such a perfect fit for Lufthansa. So I see a big future for m-commerce; someday we will be selling other stuff.”

Lufthansa Uses Mobile To Extend The Online Ticketing And Boarding Processes

Opportunities to exploit the channel have even arisen from the airline’s difficulties. “Last year we had a strike,” says Casey. “We started to update our mobile portal frequently during the strike with the most recent information about what was happening. We found that customers were using the mobile portal to keep up with this more than our classical website. I’m not a content provider, but here’s a way that we’ve been using mobile as a marketing and communication tool.”

Just as Lufthansa offers a marketing channel to partners and other organisations, so it bolsters its own marketing campaigns through appearance on other mobile portals. “We’re working with our partners so that we can be present on other sites. I think this kind of interlinking is even more important on mobile than it is on the web, because people don’t surf on mobile in the same way. They are more direct in their mobile internet usage. So we’ve been working with partners like T-Mobile to push our site on their portal and buying banners as well.

“T-Mobile’s portal is one of the top mobile sites in Germany, so we have a partnership with them. They are an important vehicle for us to push acceptance of our site among their customer base. But we have to balance this with the other carriers, although they all tend to want exclusivity,” he says.

Casey is more than happy with the numbers he’s getting from his mobile portal. Month by month visits to the site are growing by 15 per cent, and around ten per cent of Lufthansa’s total boarding processes are now executed on mobile phones. “This is a self-selling proposition,” he says, “it’s all happening by word of mouth. We have so many page views and visits now each week that the mobile site is doing better than many of my country-specific websites.”

While a great deal of effort has gone into the development of the firm’s mobile portal, recent trends in the mobile industry have given Casey and Lufthansa something else to think about. The overwhelming proportion of customers who use iPhones and Blackberries has led Casey to the conclusion that the airline needs to develop an application for these two operating systems.

“We want to do something that exploits what the phone can do,” he says. “It’s not just about replicating what’s on the portal. Navigating through an airport,” he says, “that’s one thing that’s not being done at the moment that we can add in.” In time, he says, he will look to develop applications for other operating systems, including Symbian and Android.

Casey professes to being “amazed” and “fascinated” by the response levels that Lufthansa’s mobile services have generated among its customers. “We just have huge acceptance among our clientele now,” he says. The Lufthansa experience offers a different spin on the exploitation of mobile as a marketing tool for a brand. While the firm does employ more traditional methods of marketing like banner advertising and links on partner portals, it is the use of mobile to innovate, to add convenience and value and to slash cost that give the airline a reputation for sophistication that, Casey is certain, bleeds into the way the firm is viewed in its core sector. He argues that Lufthansa is “leading the pack” among airlines in the use of mobile to improve service. It will be interesting to see what kind of functionality its iPhone application will deliver, and whether or not the move will be replicated by the firm’s competitors.

Check back this week for related features on the BBC and BMW