Project Summary
KLM Royal Dutch Airlines, one of Europe’s largest carriers serving 34 million passengers annually across 163 destinations, launched an ambitious digital customer service transformation in 2017. Facing increasing customer service demands, rising contact centre costs, and intensifying competition from low-cost carriers, KLM needed to fundamentally reimagine customer engagement. The airline’s “Blue Digital Service” initiative centred around implementing advanced conversational AI to handle customer interactions across multiple channels while maintaining their renowned Dutch hospitality.
Solutions Adopted
KLM deployed a comprehensive virtual assistant ecosystem:
- IBM Watson Assistant for core natural language understanding
- Google Dialogflow for certain language-specific implementations
- BlueBot (BB) as the customer-facing avatar personality
- Custom-built middleware orchestration layer
- LivePerson for seamless human agent handoff
- Genesys Cloud for contact centre integration
- WhatsApp Business API for messaging integration
- Facebook Messenger integration with payment capabilities
- Twitter direct message automation
- WeChat integration for Asian markets
- Custom voice AI for telephone interactions
- Personalisation engine using customer journey data
- 13 language support with real-time translation
- Emotion detection algorithms for sentiment analysis
Implementation Costs
- AI platform licensing: €8.5 million
- Custom development: €12.6 million
- Integration with existing systems: €6.8 million
- Content development and training: €4.5 million
- Contact centre transformation: €5.2 million
- Change management and training: €3.1 million
- Program management: €2.4 million
- Infrastructure and cloud costs: €3.8 million
- Ongoing maintenance (annual): €4.2 million
- Total initial investment: Approximately €47 million
Implementation Duration
- Strategy and vendor selection: 5 months (March-July 2017)
- Proof of concept: 3 months (August-October 2017)
- Initial platform implementation: 4 months (November 2017-February 2018)
- Phased rollout by channel:
- Facebook Messenger pilot: 2 months (March-April 2018)
- Twitter implementation: 3 months (May-July 2018)
- WhatsApp integration: 4 months (August-November 2018)
- Website chat implementation: 3 months (October-December 2018)
- Voice assistant pilot: 6 months (January-June 2019)
- WeChat for Asian markets: 5 months (April-August 2019)
- Language expansion phases:
- Initial 5 languages: 6 months (April-September 2018)
- Additional 8 languages: 10 months (October 2018-July 2019)
- Global scaling and optimisation: 12 months (August 2019-July 2020)
- Advanced capabilities (payment processing, rebooking): 8 months (January-August 2020)
- Total duration: 3.5 years (March 2017-August 2020)
Savings and Benefits
- 38% reduction in contact centre operating costs, saving €42 million annually
- Customer service capacity increased by 170% without additional headcount
- Response time reduced from an average 1 hour 12 minutes to 3 minutes
- 11 million automated interactions monthly across all channels
- 65% decrease in email volume through channel shift to messaging
- Customer satisfaction increased by 24% for digital interactions
- 38% of all booking changes are now handled by virtual assistants
- Self-service resolution rate improved from 20% to 65%
- Average handling time reduced by 48% for human agents
- The attrition rate among contact centre staff has been reduced by 25%
- Digital channel adoption increased from 30% to 78% of all interactions
- €86 million in incremental revenue through improved conversion and upselling
- 24/7 support capability across all global markets
- Three-year ROI of 280% with breakeven achieved at 14 months