Airlines are getting sharper in knowing how to personalize. But there are examples where the idea of knowing a customer seems to be going too far
Airlines are in the infancy stage when it comes to controlling their products to the point of creating a consistent, personalized, and value-added product for each customer.
As experts point out, the industry is directionally positioning itself to do just that.
“Today, the majority of airlines use a fairly simplistic algorithm to create a generic “individualized” product using a frequent flyer number to identify airline status, then sending out the appropriate set of products, such as a free premium seats, special boarding, etc.,” says Jim Davidson, CEO, Farelogix. He adds, “However, tremendous progress is being made by many airlines that are starting to adopt technology capable of taking input from customer management systems (usually in the form of a customer “score” that equates to a set of products to be offered) and sophisticated optimization systems. But we are just beginning to turn this corner.”
From an airline perspective, an executive based in the U. S. recently told us the “personalization of the passenger experience becoming more and more individual, as opposed to being based on a certain market segment”. He added that this is evolving from the automation of several areas which used to be manual processes and it is through that automation that huge data sets are now being created that can be used specifically for this purpose. The executive went to add that the era of big data is actually here now, but the tools and strategies to fully take advantage of it are still just a bit below the horizon for the most part.
What does it take to “personalize”?
Being able to offer tailored travel products to individual customers is being attempted for years now. However airlines have certainly moved from a phase of consideration to a period of action over the last 12 months.
Kieron Branagan, MD, OpenJaw Business Unit at GuestLogix, says effective personalization requires a “collect, predict, act” approach.
Firstly, airlines need to collect relevant data about the customer, often from a variety of sources, and airlines with a CRM and FFP/ loyalty program partnership already have a decent start. However it is also necessary to have single e-commerce platform that provides a 360 degree view of all digital interactions (including past transaction history and current online behaviour etc.) across the omni-channel (including desktop, mobile, tablet, on-board, contact centre etc.) for the entire customer lifetime, in order to make the most of the personalization opportunity, says Branagan.
He says data needs to be mined for insights by data scientists in order to predict and continually test which offers resonate with which customers.
“When beginning a personalization strategy, many airlines categorise customers into personas, for example the “business traveller”, “family holidaymaker”, “couple”, “solo traveller” etc. As knowledge and data quality matures, it is possible to get closer to serving each customer’s need on more of an individual level,” says Branagan.
Data analytics is crucial to offer personalized offers throughout the travel process. Without knowing what a passenger has done before, it makes it very difficult to visualize what they might want in the future. Without quality data, and knowing what the data actually represents, analysis of the data becomes impossible.
In order to act on insights, airlines need a logic/ rules-based merchandising engine that is powerful and flexible enough to create and manage offers and present them in an optimised shopping experience for individual customers.
Also, from an organization’s structure perspective, the challenge for most will be identifying the need to more closely integrate IT into the commercial processes to manage the sheer volumes of data and create an output that is functional and beneficial to the passenger.
As much as technology evolves, and customers can be tracked with much more precision, it shouldn’t be forgotten that it is the customer who dictates how far you can go at times.
Data can do wonders. But if the user behind the technology disables certain functionality then one can’t do much.
For example, if a passenger using a particluar mobile app has the location functionality deactivated then it is unattainable to offer location-specific offers.
In one of our recent articles, Ryan M. Harris, e-commerce and ancillary products manager, InselAir and InselAir Aruba, explained that in the EU, there is a requirement for a passenger to opt-in to accepting tracking cookies, which allows you to collect information on their search habits. “If a passenger does not opt-in, I can’t tell that they have been searching for a trip to Milan, so I can’t offer them a personalized offer when they come to my home page,” he mentioned.
Importantly, Harris also emphasized that there is a deep public distrust, in general, in automated tracking.
“Full personalization opportunities requires building that trust with the passenger and ensuring that the information will not be used except for the specific reason that the passenger grants access. Technology has made many things possible, but there are limitations as to how far you can take it without being “creepy”,” Harris mentioned.
Also, for those who don’t understand much about how retargeting works, when they get a feeling that they are being followed they may not like it.
For instance, I know of OTAs who sort of “follow me everywhere” after I abandon certain booking flow. I might have just touched upon a fare or a hotel for a particular destination and left the site in few minutes. But then session after session, when I access any website on my PC, I get to see a banner ad for the search I had conducted. It can go on and on for a week at least, as far as I can remember. Yes, the ad that is being shown to me is personalized but certainly not the way technology should be used to annoy the potential traveller.
So airlines definitely need to be cautious about their plans for personalization. It is not easy to foray into new areas of technology or analytics. Yes, there are huge benefits to be reaped by being data-driven, but not at the expense of losing out on customers in the name of knowing them better.
By Ritesh Gupta
Many of the latest developments pertaining to personalization will be discussed at our global Mega Event (04 & 05 November 2015, San Diego).
Follow us on Twitter: @Ai_Connects_Us and Checkout our Events at: www.AiConnects.us
Airlines’ IT infrastructure varies a lot and can affect what and how they sell, according to Paul Whiteway, commercial director - APAC, Skyscanner. Ai lists 5 key aspects of airline indirect distribution involving a meta-search site.
How competent are indirect channels when it comes to supporting differentiation that airlines are seeking? As much as the likes of GDS, OTAs and meta-search engines need to answer this question, airlines, too, are often probed about their intention for the way they intend to support indirect distribution.
Carriers have attained a high level of sophistication when it comes to serving ancillary offerings, branded packages etc. that feature on their respective sites.
“However the distribution of this data to indirect channels is limited,” an industry executive told me. So this essentially means that unless users shop on the airline website they won’t see the full range of branded offers and content. By sharing more data with channel partners, airlines can ensure their brand benefits are communicated and this will drive sales and revenues. Of course, the discussion around who owns the customer is a valid one, and the commercial association is driven by this key aspect, too.
Ai spoke to Paul Whiteway, commercial director - APAC, Skyscanner, about how and why airlines work with meta-search sites and how the traffic generation site is improving. Excerpts from the interview with Ai’s Ritesh Gupta:
“We have also seen examples where when an airline shares promotion fares and actively manages their routes and pricing by using the powerful data tools we provide they can benefit significantly as users are always on the lookout for great deals,” shared Whiteway.
In terms of general trip planning tools and non-air products such as tours, Whiteway views this as an area that has a lot of potential as it is still very nascent. There are many start-ups in the trip planning space which is a fair indication of its potential but nobody has really ‘cracked it’ yet, as Whiteway put it.
Distribution will be on the agenda of the global Mega Event (in San Diego 04-05 November 2015).
Follow us on Twitter: @Ai_Connects_Us and Checkout our Events at: www.AiConnects.us
What will it take to sustain the momentum of the NDC pilots?
Airlines will have to invest in new technology that will not be cheap and the GDSs will have to invest in new aggregation and trade selling capabilities, writes Ai Correspondent Ritesh Gupta.
How is the NDC XML-based standard shaping up?
The International Air Transport Association (IATA) announced a spate of pilots and live deployments to test the NDC schemas in the second week of June. It is imperative to assess what sort of preparation does it require to capitalize on the opportunity.
Ryan M. Harris, e-commerce and ancillary products manager, InselAir and InselAir Aruba says it’s important to understand that the NDC initiative is still in relatively early stages. For its part, InselAir, too, is gearing up to complete a live NDC deployment, selling flights and ancillaries to corporate users and travel agents.
“Within the IATA NDC workgroups and the PADIS (Passenger and Airport Data Interchange) committees, we have had the chance to see several different pilot projects at different stages of maturity,” mentioned Harris. The range of the current projects goes from basic, single-function proof of concepts to full-scale live deployments that are running today.
“The majority of the projects have been able to reach their stated objectives, but some have had their issues, which is to be expected. We have been able to take the feedback from the pilot projects, both good and bad, and incorporate it into the standards process, hopefully successfully,” shared Harris.
“For the most part, we have the business goals of the project documented and agreed to and we have made significant progress into the technical specifications that will serve as a blueprint for the standards. There are still many functions in development and there are organizational processes that need to be completed, which takes time,” said Harris. He further added: “The main goal of the entire project is to take the industry from where we are today, which uses a fixed, “proprietary” communications format that is very rarely used outside of the travel world and move it to a more open XML standard that has the ability to consume and feed data from/to several sources.”
“Given the open-source nature of the XML language, the base of available programmers and service providers that can provide services to the industry expands dramatically, which should spur additional innovations and lower the overall costs of solutions,” said Harris.
Investment in new technology
NDC is a standardized definition of connectivity messages designed specifically with the notion of airline differentiated products delivery in mind. Number of carriers that have participated in NDC pilots/ deployments or announced their intent to do so now stands at 24.
Sharing his viewpoint, Jim Davidson, CEO, Farelogix says as NDC is simply a standardized message set and much of the opposition has either disappeared or gone “underground” some real work can finally start.
“Remember that until the airline competes in product strategy, invests in new technologies such as their own merchandising and pricing engines, and the GDSs complete their scalable connectivity, display and transact capabilities, not much transition will occur in the indirect channel,” he said.
“Frankly, most of the “testing” has been more hype than reality. Airlines will have to invest in new technology that will not be cheap and the GDSs will have to invest in new aggregation and trade selling capabilities before we see scale,” stated Davidson.
Harris believes it is still a little premature to replace all the airline systems with NDC-compliant systems, especially since there isn’t yet a standard to define “NDC-compliant”.
“While the messaging format is still under development, companies can begin to ready themselves for the data that NDC will bring through their life-cycle management approaches. Any data systems that are currently nearing end of life should consider adding XML connectivity into their replacement requirements. By taking this simple, and highly available, approach, airlines can prepare the canvas for the NDC picture while maintaining their governance and avoiding obsolescence,” explained Harris.
Single point of content creation
Airline distribute data to indirect channels via ATPCO OC, IATA EMD and XML technologies.
Until EMD-A comes to full implementation, any ancillary sales will continue to be recognized as a separate transaction; however, that does not prevent an airline from selling it, it only makes it difficult to associate it to a specific flight activity.
ATPCO Optional Services does allow most airlines to file and sell products related to the flight through third-party channels, including through GDS and interline partners.
“The big advantage in transitioning this from the simple ATPCO filings to an API or other XML-based technology is that it allows an airline to better perform revenue management on those products in real time. Even with the frequent updates to and from the ATPCO databases, the pricing remains relatively static and is difficult to personalize. For that, you really do need that direct connection to the airline’s merchandising system which is only achievable through the direct connection, which is a major goal of the IATA NDC initiative,” says Harris.
Davidson says right now the airlines and the GDSs seem to be going through what he refers to as “unnatural acts” to bring about this new distribution science.
“The unnatural acts are - for the most part the airlines and the GDSs attempting to utilize technology and processes that were never intended to do what we are asking them to do. Take ATPCO filing of merchandising – we are attempting to utilize a process and technology that was designed to manage static price information,” he said.
He further added: the concept of even a personalized price, let alone a set of products and services of which many are dynamically controlled inventory, was never conceived when the ATPCO filing system was set in place. “And even seven or eight years ago when the OC project was started at ATPCO, the architects never envisioned a time when a price and offer would be dynamically generated at the exact time of the request to the airline and distributed by the airline in milliseconds. Yet we created an add-on to the traditional ATPCO process to attempt to distribute dynamic airline ancillary products and services using same file, store, forward, utilizing a third-party to generate to the best of their ability, the offer.”
“While a number of airlines and GDSs are feverishly trying to hang on to this process, the reality is, it’s history. While I can’t predict when, the airlines will adopt the process of dynamically generating offers across their entire distribution network through a single point of “content creation”,” said Davidson.
Analytics associated with NDC
Airlines adopting the NDC model of distribution will be the ones creating their offers one at a time, and they in turn will have a tremendous opportunity to get immediate feedback on the offer – i.e. did the customer buy or not.
As Davidson says, the analytical opportunity to improve offers and corresponding take rates will be a major breakthrough for airlines in how they market their product. This is a major change to how the airlines distribute today in the indirect channel with virtually no feedback on offers until someone actually buys something.
Once the airlines get a taste of the immediate feedback loop and how they can adjust offers, it will revolutionize airline distribution as we know it.
Comparing Airline Direct vs. Indirect – still a big gap in what’s on offer
The way enriched branded offers and content are displayed and sold via indirect channels isn’t an apt depiction of what airlines have to offer by Ritesh Gupta, Airline Information Correspondent.
What is being done to combat disparity in how carriers distribute their content for channel optimization? The answer to this question depends upon several factors, including the intent of airlines to make the most of indirect distribution. There is immense scope for improvement if airlines intend to avoid commoditized appearance of their branded offerings on indirect channels.
Eric Dumas, CEO, Vayant Travel Technologies, says currently, many airlines offer on their websites ancillary services, branded packages and related content such as attractive images, videos, descriptions etc. However, the distribution of this data to indirect channels is limited, he says.
Citing the example of meta-search engines, he says the decision-making mostly relies on price and schedule.
“Unless the customer shops on the airline website they won’t see the full range of branded offers and content. By sharing more data with channel partners, airlines can ensure their brand benefits are communicated (and eventually gain from stronger revenue generation),” shared Dumas.
Data via industry standards and XML
As of today, the way one can shop on airline-owned channels is quite different from the third party ones. The industry has been keenly following the progress of NDC in this context.
Image 1 and Image 2
So we tried to assess how can airlines distribute such data to indirect channels via ATPCO OC, IATA EMD and XML technologies.
The EMD-S is now pretty much available through the GDS channels and has been a part of most PSS systems for a few years now. The big move forward in that arena will be the continued rollout of EMD-A, which allows you to associate a non-flight item to a flight ticket, thus providing more information on the purchasing trends of your passengers.
Ryan M. Harris, e-commerce and ancillary products manager, InselAir and InselAir Aruba says until EMD-A comes to full implementation, any ancillary sales will continue to be recognized as a separate transaction; however, that does not prevent an airline from selling it, it only makes it difficult to associate it to a specific flight activity.
Harris adds, “ATPCO Optional Services does allow most airlines to file and sell products related to the flight through third-party channels, including through GDS and interline partners.” He says the big advantage in transitioning this from the simple ATPCO filings to an API or other XML-based technology is that it allows an airline to better perform revenue management on those products in real time. Even with the frequent updates to and from the ATPCO databases, the pricing remains relatively static and is difficult to personalize. “For that, you really do need that direct connection to the airline’s merchandising system which is only achievable through the direct connection, which is a major goal of the IATA NDC initiative,” says Harris.
There is an option to use a web-based system that manages a set of fares with similar rules and services.
Technology is in place to enable carriers to finalize their own buckets and allot fares and services to each bucket to be offered to shoppers. As Dumas explains, different prices are there for the same flight indicating different fare buckets, and there is flexibility in opting for the same when it comes to outbound and inbound travel. The shown price of the fare bucket features the lowest available fare in that bucket.
So today if an airline opts to work with a specialist like Vayant for its core pricing, shopping and offers distribution to third parties (either pulled, including NDC, or pushed), the use of Vayant Fare Buckets means immediate processing of new, modified, deleted services and bundles. “This complements the ATPCO Branded Fares we use to create real-time bundles for specific needs. With just one click the airline can create a bundled sales offering for a specific channel – and if they want to change it, well that’s just another click,” explains Dumas.
Making partnership effective
Traffic generation is an interesting game.
Continuing with the example of meta-search engines, it needs to be understood that meta-search sites made life difficult for airlines by dramatically increasing the search volumes airline websites normally handle. In consequence mechanisms were built to protect the airline website from the additional transaction costs generated in the GDS or hosting provider.
“Meta-search players moved on to other methods of finding flights, such as the going to the GDS themselves. But this meant they can miss out on offers available on airline websites,” says Dumas.
He adds, “Our approach is different – and it’s about getting airlines and meta-search engines to work together for mutual benefit. We enable airlines from all around the world to give their data to the meta-search players so they can offer the full range of an airline’s offers, including optional and third party services.”
As for control over what airlines want to sell, and how a passenger is being made to feel that the airline is smart enough to offer what he or she actually needs, it largely depends on the sales channel and the type of products. Through the direct channels, such as e-commerce and call centers, as Harris says, airlines are in full control and can easily leverage agreements made with other service providers to the benefit of both the airline and the passenger. Direct channels also provide the airline with merchandizing opportunities for its flight-based products such as flexible fare families, upgraded seat selection and in-flight services through the sales process. He says in case of indirect channels, it becomes “less controllable” as you become reliant on third parties, some of which have their own agreements with service providers, such as car rentals or hotels and most of which tend to be based on lowest price. Through the indirect channels, an airline must rely on the third party to be educated enough in its product mix to be able to adequately sell the services that the passenger either desires or can benefit from.
Also, airlines today are only limited by the data available to them, which is where the indirect channels have some limitations, points out Harris. Citing an example, he says, if a passenger books through a travel agent, more likely than not, the agent will put his or her contact information in the booking as opposed to the passenger. For cases of trip delays or flight changes, this is expected, as the agent becomes the responsible party to contact the passenger and can make alternative arrangements on their behalf. The problem from merchandizing is that the airline now has no direct line of communication to the passenger, so cannot directly market to them. “This is especially true of infrequent travelers who do not have an associated frequent flyer account, as I now have no information that would allow me as the airline to make ancillary offers directly,” says Harris.
Overall, there is a refreshing energy in the industry today, says Dumas. Airlines understand the critical importance of controlling their sales offering, especially the pure flight-only offers which are the very core of their business. “I’m excited by the potential to add flight-related services to core fare pricing - on the proviso that an airline can deal with disconnect between core flight offer generation and add-on services. Gaining control over offer generation, from A to Z, is the key to a successful sales strategy,” says Dumas.
What to expect from an app tailored for Apple Watch
Apps for the newly introduced Apple Watch device are garnering lot of attention Ai Correspondent Ritesh Gupta interacts with an Asian mobile booking start-up to assess the utility of such app.
Apple calls it its most personal device yet, one that lets you do familiar things more quickly and conveniently. Yes, it’s fascinating indeed as one digs deeper into what all Apple Watch can do. As easy as it may sound for certain things we are used to do, assessing the real utility of the new device for travellers is intriguing.
Expectedly, travel brands are responding. And they are making it clear what to expect from Apple Watch - How Apple Watch can enhance a journey? What are the strong points and limitations of this new offering from a traveller’s perspective?
One statement clearly stood out as I interacted with last-minute hotel booking app HotelQuickly’s
COO and CMO Christian Mischler about Apple Watch: “It’s all there, on your Apple Watch, right on your wrist.”
It was captivating to know more about the experience of crafting a new app for another iOS device.
What to expect?
The Apple Watch will not be hidden in a pocket and readily available with the most important information for a traveller. One of the highlights is access to contextual, time-sensitive information just when it’s needed. For instance, the app could show the next trip up until 24 hours before departure.
In case of HotelQuickly, the team has integrated a hand-off between iPhone app and Watch app, so that the user can pick up the screen that was last viewed on the watch also on the iPhone, e.g. booking details or the map in order to navigate to the hotel.
Also, the team has added hotel locations in EN and local language to the Watch app, making it easy for a traveller to show the address to a taxi driver, either when on the phone, when the iPhone is in some luggage, or when the iPhone is out of battery. The company also clarifies that its Apple Watch app does not serve as a replacement for the app on iPhone. In fact, it goes on to say: trust us on this one, booking a hotel room on a tiny screen is not convenient at all, but brings you some very handy additional features to simplify your check-in.
“I believe currently the battery lifetime is a concern and will hopefully be improved in future editions of the Watch. Time (and usage) will tell further practical limitations or the most appreciated features of the Watch,” shares Mischler.
Crafting an app for Apple Watch
HotelQuickly’s iOS Lead Developer Anthony Collins says one would instinctively approach the Apple Watch as you would any other iDevice.
Elaborating on the experience of preparing an app, he shared the thought directed towards in-house designer where initially along the lines of; 'Please scale down our iPhone app to be suitable on the Apple Watch' and 'Make the sure all the features we have are not lost in the scale down'.
After reading a lot about Apples' own approach and speaking to their own development team, the team at HotelQuickly understood it was missing the target.
“By its very nature, the Apple Watch is an extension of the iPhone. We needed to approach our Apple Watch app in much the same way. Offer an additional layer on our iPhone app that we believe, our customers will truly use and appreciate,” shared Collins.
“Making a hotel booking requires a certain amount analysis; the price, the pictures of the hotel, what facilities it offers, the distance to a particular metro station or airport, how the price compares to another companies. That’s even after we have carefully curated a list of great hotels. This is best done on our iPhone app where there is simply more screen real estate. Pictures of a hotel really don't do themselves justice on such a small screen. So we focussed on the post booking event,” shared Mischler.
“Our app will get you to the hotel. Give you all the information you need to check into that hotel. You won't need to dig your phone out of your bag after making the booking. It’s all there, on your Apple Watch, right on your wrist,” he said.
Some of the highlights of the HotelQuickly Apple Watch app are:
“The biggest challenge we found, is the fact that this unknown territory,” said Collins. “Add to this, a fairly, intentionally limited software development codebase, that Apple have made accessible to developers, it created a very creative and interesting atmosphere in our iOS development team. Another obvious drawback is the lack of an Apple Watch to test our creation on. Thankfully, we we're able to get into a secret Apple Lab in Hong Kong - where we had access to actual Apple Watch hardware - during early April which really amplified our development push. It also was pretty cool to see exactly how the HotelQuickly app would look out-in-the-wild.”
The team also complimented Apple.
Overall, as Mischler pointed out, Apple offers an “incredible amount of support, assistance and guidance in the uptake of any of their new technologies”.
“With the Apple Watch, we had a truly invaluable contact whom, was incredibly informative and aimed to help us get the very most out of our Apple Watch app for our customers,” he said.
He also asserted that it’s also a fairly simple argument.
“If you want to stay ahead of the fold, you need to embrace every new technology that may come along from Apple. Why? Because our customers use and embrace Apple products and as such, expect to be able to use our application with all portable Apple technologies available to them,” Mischler rightly pointed out, referring to the prowess of Apple.
5 issues that can improve an airline’s personalisation plan
Airlines need to be pragmatic especially when it comes to sorting out internal issues or avoiding public distrust in order to optimize their personalisation initiative, writes Ritesh Gupta, Ai Correspondent
Being “data-driven” is key to being customer-centric – something we hear quite often. Understanding the intent of flyers, serving them what might be of utility or even inspire them for their next journey, being spot on with all this in terms of the channel/ device that is being used…this all and more is what airlines are trying to achieve. Yes, recognizing a customer and being relevant to them throughout the purchase funnel is the benchmark for an apt customer experience.
But this means airlines need to embrace change. So how challenging is it?
Progress is being made, as Fort Lauderdale, Florida-based Ryan M. Harris, e-commerce and ancillary products manager, InselAir and InselAir Aruba says.
The personalisation of the passenger experience is “becoming more and more individual, as opposed to being based on a certain market segment”, says Harris.
This is evolving from the automation of several areas which used to be manual processes and it is through that automation that huge data sets are now being created that can be used specifically for this purpose. The era of big data is actually here now, but the tools and strategies to fully take advantage of it are still just a bit below the horizon for the most part, says Harris.
“The shift from mass marketing to individual offers is an exciting process, as the industry develops new and personalized products and services based on a passenger’s previous behavior and feedback” says Harris.
Here we explore few key aspects that need to be dealt with for improving upon personalisation:
In most companies within the industry, the IT organization has been traditionally focused on the technology side with hardware, software, apps and networks.
“Big data and the benefits that can be derived from it need to force a change to focus on the information side of the equation. Organizationally, this usually results in a transition from a Chief Technology Officer to a Chief Information Officer, to reinforce the change of focus,” says Harris.
The technology side will still remain important, but will largely be there to support the information collection and transformation processes to create the personalized experiences that passengers desire and that we are now able to deliver.
“The industry is becoming involved in retailing and merchandizing in ways that were never anticipated 20 years ago and this shift forces a change toward the retailing model. By “re-bundling” products and services, we have created new products that can be effectively differentiated and sold to meet passenger demand above and beyond a simple seat,” he says.
As a passenger, it now means much more choice and different price points that I can shop during my travel planning. Instead of three airlines, each with three cabins for a total of nine price/ service points, one airline may be offering four options in economy, three in business and two in first by itself. Those options, as Harris explains, allows one to consider exactly what it is that he or she wants based on price tolerance and needs.
“The advantage goes to the airline that is able to anticipate those wants and needs through the shopping process and deliver personalized services based on my history,” says Harris.
“The biggest difference, especially in Amazon’s case, is the amount of data processing infrastructure available to them. I believe that Amazon is the second largest private data processor in the world right now, right behind Google. In a world where data is power, which in personalized retailing, it definitely is, the scale of the comparisons is not valid,” says Harris. “That being said, airlines are using some of the lessons that can be taken from these companies, namely that personalisation of offers is an effective tool in today’s marketplace and that is requires huge amounts of data to effectively achieve it.”
They are getting better as the technology evolves, but ultimately it is the passenger that decides how far you can go. Harris elaborates on this and says data can do great things, but, for example, if a passenger using your mobile website has the location function turned off, it becomes impossible to offer location-specific offers. In the EU, there is a requirement for a passenger to opt-in to accepting tracking cookies, which allows you to collect information on their search habits. If a passenger does not opt-in, I can’t tell that they have been searching for a trip to Milan, so I can’t offer them a personalized offer when they come to my home page.
There is a deep public distrust, in general, in automated tracking, especially given the media attention to the actions of several governments across the globe, which whether its right or wrong, is a different conversation altogether, says Harris. “Full personalisation opportunities requires building that trust with the passenger and ensuring that the information will not be used except for the specific reason that the passenger grants access. Technology has made many things possible, but there are limitations as to how far you can take it without being “creepy”,” stated Harris.
As highlighted in one of our previous articles, solutions exist today that bring together both anonymous visitor information and customer details from multiple databases found within an airline: web, email, mobile, loyalty, booking, and more. The information can be augmented with third-party information such as social. This rich profile provides a foundation for better understanding how visitors and customers will respond to re-engagement efforts when they abandon a site.
Time to get realistic with what to expect from NDC in 2015
NDC is not a “magic bullet” that will decipher every problem, but it will help to solve, or allow to be solved, many of the cross-platform issues that we encounter today, writes Ritesh Gupta, Airline Information Correspondent
If there is one harmonious way in which various stakeholders look at airline distribution, then it has to be the same being described as an intricate and interconnected business. But is the industry finally on verge of a major overhaul? A clear answer to this would largely depend upon how IATA’s XML-based data transmission standard (NDC Standard) shapes up in 2015 and beyond.
As IATA recently stated, airlines need to work on APIs that will pave way for dissemination of their distinctive content in a rich and dynamic manner, deploying the offerings that their preferred technology vendors will launch to market – based on the NDC standard. For its part, IATA is also planning to evaluate and enhance the running of the schemas, and craft a standard project roadmap to support airlines and their partners for NDC.
For airlines, each one of them has its own challenges and a lot of what those hurdles are depend on their size and resources, says Ryan M. Harris, e-commerce and ancillary products manager, InselAir and InselAir Aruba.
Citing an example, he says if the entity is a large legacy airline, then there would probably be a large IT staff that has already solved the problem of how to offer ancillaries through all of direct channels and are looking to get full distribution into your third-party channels, such as GDS and interline distribution. On the other hand, if it’s a small regional carrier, you probably don’t even have an IT staff dedicated to your distribution and have to work with your system provider to even make ancillary sales a possibility through the direct channels, and may have excluded even considering the third-party availability at this time.
When it comes to the internal management of the ancillary products and services, there is no question that it must be centralized to coordinate the product mix and ensure consistent message and expectations to the passenger.
“In most airlines, the organizational structure to support this product line is already in place, at least from a high-level,” says Harris. It then requires the business and technology processes to support the end-to-end product lifecycle to be implemented. For those companies without a current ancillary program in place, the biggest difficulty is likely the transition in thinking of a product, such as seat selection, as an intangible product to placing a tangible value and life-cycle management approach to it.
NDC and indirect distribution
So what do airlines need to take into consideration as they focus on utilizing an XML path for distributing ancillaries in the agency channel?
Firstly it’s important to recognize that XML is a coding language, not a technology. It just happens to be an open language that is very useful at achieving some of the goals that we as an industry are looking to solve by allowing different systems that speak in different languages to speak in the same language. As Harris points out, it also helps that it is not limited to proprietary communication methods, which opens up connection options such as TCP/IP, or Internet, as opposed to the legacy point-to-point communication lines, such as leased lines.
“It is not a “magic bullet” that will solve every problem, but it will help to solve, or allow to be solved, many of the cross-platform issues that we encounter today,” says Harris. “That being said, I can’t imagine considering any core system that does not at least hold the capability, whether standard or optional, to allow bi-directional XML interfacing.”
The openness of the Open Travel Alliance XML standard is a multi-functional standard that will not only become a powerful tool in helping to resolve the cross-platform and cross-channel issues we are talking about today, but also becomes a development asset for internal access to the core systems, such as confirmations, loyalty program, check-in and even extending to more integrated e-commerce functions, asserted Harris.
Since it is a standard, it also opens up the availability of third-party applications to these interfaces without the heavy customization that is required today.
The availability of XML interfaces should expand the potential client pool of companies that develop these front-end interfaces, which should in turn result in driving innovation into the industry while minimizing cost to both the developers and the airlines while increasing the lifecycle of current airline host systems.
Being in control
Airlines would have the freedom to decide to what extent they are going to utilize NDC. It would be a function of the way their business is being done or their IT competence.
According to IATA, a carrier may deploy NDC processes end-to-end, managing offers, ticketing and settling straight with the agency. Alternatively, a carrier may deploy, perhaps as a supporting step, only the NDC-shopping route and carry on with all their fare-filing, fulfilment and integrity procedure.
Some carriers may opt at some point to run all their indirect sales using NDC based channels. On the other hand, carriers may decide, if only during a transition period, to use a combination of NDC based and non-NDC based processes.
The NDC Standard is agnostic as to whether a set up is structured entirely on NDC processes or NDC based processes used in conjunction with some other processes. It’s for airlines to decide to choose which offering would be most suitable for their operations.
Guest Editorial by Jay Sorensen, President, IdeaWorksCompany
Michael O’Leary, the CEO of Ryanair, recently admitted “If I had known being nicer to our customers was going to work so well, I would have done it years ago.” As notable as O’Leary’s epiphany is to the airline industry, it’s worth pointing out that the proven value of empathy, competency, and kindness precedes his recent directives to be nice to customers. The Latest Report from IdeaWorksCompany explores how airline management teams can work together for the greater good of their customers, employees, and investors.
Call it a back-to-basics mantra, but sometimes in a technology riddled world, we all can benefit from a few therapeutic reminders to reset our moral compasses. By using the inherently human qualities of empathy, competence, and kindness, the report offers advice to airline management teams to boost ancillary revenue:
• Understand the perspective of other departments before adding a la carte services.
• Front line employees provide a vital source of intelligence; talk to them before adding anything.
• Empathy is a crucial tool of diplomacy, and ancillary revenue leadership requires diplomatic skills.
• Enlightened airlines should have employees book and buy tickets like their clients.
• Competence has a natural enemy, and that’s complexity; improve existing a la carte items.
• Don’t invite regulators to become involved in your business by failing to fix systemic problems.
• Untangle consumer confusion by dedicating corporate resources to simplifying self-service.
Boosting Ancillary Revenue will also be on the agendas of the Mega Event Asia-Pacific (01 & 02 September 2015, Singapore) and the global Mega Event (04 & 05 November 2015, San Diego.) You will find details and registration for these events at: www.AiConnects.us
Guest Editorial by Jay Sorensen, President, IdeaWorksCompany
American, Etihad, Qantas and 20 other Airlines offer Wild Rewards
The latest report from IdeaWorksComany is now available. We recently reviewed the frequent flier programs of 160 airlines around the world to gather examples of alternative rewards such as unique experiences, event tickets, and retail goods. Beyond the benefit of reducing reward liability, alternative rewards can encourage members to interact more frequently and deeply with the program. The following are a few examples from the 25 alternative rewards compiled by the report, ranging from the extravagant to everyday comforts:
Airlines Woo Members with Wild, Weird and Wonderful Rewards was released as a free 17-page report and is available here:
Guest Editorial from Sinead Finn, Director, affinnity & Chairman of Ancillary Merchandising Conference 2015
We have seen a positive shift in the last 18 months with the innovator airlines in how they market and sell ancillaries. There is a much keener focus on offering what the customer wants or needs rather than the “Bazaar Effect”.
Why this change? Conversion of ancillary sales and consequently revenue is never at optimum levels. The issue is not that the customer does not want to be offered ancillary products, but it is that they do not want to be coerced into purchasing the ancillary products. In pressurising the customer, he is less like to purchase even a product that he may want. The Customer is so besieged with the vast products on offer, most of which are irrelevant to him and his recent flight purchase, that ticking the “no” box becomes routine.
However, if an airline changes its purchase points, it is not enough. Airlines need to look at industry leaders on ecommerce to build their digital footprint and not to other airlines. What about Ebay & Amazon, how do they treat their “guests” on the customer journey? What about customer recommendations within the booking flow based on historical data and purchases? What about personalising all the touch points to ensure that the customer is offered what he wants and is more likely to purchase, thereby increasing revenue? What about live social proofing and customer ratings such as those used by Booking.com and CarTrawler? E.g. “10 people are looking at this hotel now” or “15 people gave this car supplier 8 out of 10”. How challenging can this be, after all airlines are in possession of the richest travel data in the world?
Taking customer service delivery a step further, let’s take a look at the online retailer Zappos.com. They send customers to their competitors if they cannot help, the result being that 75% of their customers are repeat buyers and the 2nd purchase is 100% higher than the first.
What is preventing these shifts? It is difficult to understand why only a select number of airlines use technology partners to personalise. There is a greed and fear factor, whether that is sharing data or sharing revenue or both. So long as this fear factor remains, the airline’s focus is not on the customer in order to deliver the right ancillary and consequently ancillary revenue will never reach optimum levels. As long as this continues more and more of the airline’s share of ancillary product sales will be gobbled up by other savvy on-line sellers who offer products which the airline’s customers actually want when they are planning a holiday. Seems such a loss for something which is so simple.