PVC Competitor Airports & Customer Service Outcomes Premium Value Concession Program June 20, 2013 Robb Brown / Rob McDaniel Metrix Advisors, LLC 303.641.3443 rob@metrixadvisors.com
Agenda Introduction Competitor Airports Review of project development timeline Selection criteria Challenges / Next steps Questions Mystery Shopping Form Revisions Review of project development timeline Summary of results and observations to date TPA recommendations for scoring revisions Discussion on findings and recommendations Wrap up and next steps (detail location of 6/27 meeting) 2
Competitor Airports Timeline Five competitor airports selected by DIA management shall be surveyed every 18 months by secret shoppers using the jointly approved customer service evaluation form. Date Milestone Status 8/1/2012 PVC Program Start Date (PSD) Complete Q1 13 Competitor Airport Selection Complete Q2 13 Competitor Airport Outreach In Process Q3 13 * Finalize Competitor Airport Participation Pending Q4 13 * Complete Initial Competitor Airport Mystery Shops & Scoring Pending * projected 3
Competitor Airports Selection Process 1. Best in Class Customer Service Utilizing CSE industry expertise, we identified airports that are known to value and invest in providing superior customer service. 2. Management Perspective Per Rule 45 DIA Management is the decision maker for competitor airport selection. Accordingly, feedback was solicited from CCO and CFO. 3. Industry Operating Metrics Utilizing widely available operating metrics we developed a competitive analysis to quantitatively identify those airports most comparable to DIA. 4. Develop Competitor Ranking The resulting lists from selection criteria 1 3 were compiled into an aggregate ranking and submitted to DIA for final approval 4
Competitor Airports Customer Service Criteria CSE provided an assessment of which competitor airports are delivering superior customer service. CSE utilized a three tier categorization methodology to assess each airport. The three tiers are: A Airport facilities that are known to value customer service through an extensive evaluation and training program. B Airport facilities that either: (a) do not have customer services programs, or: (b) are in the early stages of customer service program development. UNKN Airport facilities where CSE has no knowledge of their customer service efforts. 5
Competitor Airports Operating Criteria $ merchandise sales # of total passengers $ food & beverage sales # of enplaned passengers $ total concession sales % enplaned passengers % merchandise sales % of international passengers % food & beverage sales % of O & D passengers $ merchandise sales / enplaned psngr % of connecting passengers $ food & beverage sales / enplaned psngr # of concessions $ total concession sales / enplaned psngr 6
Competitor Airports Selected Long list Atlanta (ATL) Miami (MIA) Baltimore (BWI) Minneapolis/St. Paul (MSP) Boston (BOS) * Newark (EWR) Charlotte (CLT) New York (JFK) Seattle (SEA) Chicago O Hare (ORD) Phoenix (PHX) * Dallas/Fort Worth (DFW) Portland (PDX) Detroit (DET) San Diego (SAN) Houston (IAH) San Francisco (SFO) Indianapolis (IND) Toronto (YYZ) Las Vegas (LAS) Los Angeles (LAX) * alternate 7
Competitor Airports Next Steps & Challenges Currently working to setup initial meetings with long list airports Initial visits beginning in July to detail program and solicit firm participation commitments Develop and sign MOU on participation, deliverables, etc. Logistics trips to map concessions and assign/confirm minor merchandise categories Recruit/train mystery shoppers Access authorizations Complete shops Known challenges with competitor airports include:? Unclear of benefit to them? Uncomfortable with interaction and/or conflict with existing programs? Uncomfortable with data sharing/use? Unsure of commitment required from their organizations? Unsure of implications of results 8
Mystery Shopping Form Revisions 9
Mystery Shopping Timeline Date Milestone Status May 2012 Initial mystery shopping forms approved Complete August 2012 First month of compliant mystery shops Complete 8/1/2012 PVC Program Start Date (PSD) Complete May 2013 9 month program review / analysis Complete June 2013 Present recommendations for program improvement In Process July 2013 * Compile concessionaire feedback & draft final forms Pending August 2013 * 1 st round of mystery shops utilizing new forms Pending * If authorized to proceed 10
Mystery Shopping Results 8/12 4/13 Minor Merchandise Category Concessions in Category 1 Expected Monthly Points (1/3rd) Actual Monthly Points % of Concessions Receiving Points Bar 2.4 1.0 1.3 55% Casual Dining Bar 13.0 4.0 5.2 40% Food Court 12.0 4.0 4.7 39% Newsstand 15.0 5.0 7.8 52% Quick Serve 6.0 2.0 2.4 41% Quick Serve Alcohol 4.3 1.0 2.1 49% Snack 6.3 2.0 3.7 58% Specialty Coffee 7.0 2.0 3.3 48% Specialty Retail 27.7 9.0 15.7 57% TOTAL 2 93.8 30.0 46.2 49% 1 Partial concessions exist due to mid period openings 2 Total for expected points earned is slightly less than 33% due to rounding 11
Mystery Shopping Scores by MMC PVC Internal Customer Service Points by MMC (Aug'12 Apr 13) TOTAL Earned Monthly Points 25 5 Bar Casual Dining Bar Food Court Newsstand Quick Serve Quick Serve Alcohol 1 Monthly internal customer service points are generally trend flat for the 9 month period Lack of trend is result of high average score for the period Trend can only increase when more concessions receive 100 / 100 monthly scores 12
Mystery Shopping Recommendations Empirical results show current program is measuring above average customer service, not superior customer service Value of internal customer service points diluted for those concessions delivering superior customer service Average score of 93% allows no room for improvement ** Additional scoring differentiation needed to accurately capture top 1/3 rd customer service performers ** 13
Discussion & Next Steps 14