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).
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