Ai Editorial: Focusing only on customer acquisition is a losing cause for airlines

First Published on 6th July, 2016

Ai Editorial: If airlines refrain from owning the customer experience via their own product and touchpoints, then they are in danger of falling way behind Google, writes Ai’s Ritesh Gupta

 

There are several big questions that airlines need to answer today when we talk of managing customer acquisition cost and even going beyond to optimize the experience.

One of them relates to avoiding wastage and even annoying travellers with irrelevant “retargeted” digital ads. It’s true that retargeting drives conversion when the intent is understood, but no point in showing London-New York routing when the idea has been dropped. Also when we talk of creative or messages, airlines need to look at every single piece of data that’s available, and segmentation would result in tailored ads.

The other one is about how to work with Google. If airlines continue to share their data around price and availability, then the prowess of Google would only get stronger. Google can stitch unstructured behavioral data like social posts or searches together, providing context and determining intent. This data helps shape the audiences for its advertising network, ultimately enabling Google to only serve up the most relevant ads. Be it for paying for leads/ bookings or ensuring airlines dampen their own ability to directly sell non-air ancillary products, airlines need to minutely scrutinize how they count on Google, both as a supplier and an advertiser.   

Competing with alacrity

Philip Rothaus, Director, Global Business Development, EveryMundo, recommended few areas that airlines need to look at:

Ø  Garnering data: Rothaus says airlines and other travel-related business aren’t data-omniscient – it’s not as if they have automatic access to all of a traveller’s digital preferences. “In order for an airline (or any other entity) to acquire data on a consumer's activity and tendencies, the consumer has to engage directly with the brand,” he says. “Right now, online aggregators - such as online travel agencies and meta-search engines have the lion’s share of high-value customer data, chiefly because they attract more travellers through online search than the airlines do. That provides them with the intelligence to deliver targeted marketing offers tailored to their interests.” Until airlines invest in the digital marketing infrastructures and customer acquisition strategies that can help them compete with OTAs and meta-search engines, they won't have the data do the same.

Ø  Performance content: Software tools can help airlines compete in the search ecosystem more effectively. Namely, performance marketing technology can be integrated with an airline’s existing website and IT infrastructure to enable airlines to quickly deliver up to millions of high-performance landing pages, in any language or country, in response to consumers’ travel searches. Airlines need to transform existing inventory content into performance content – deployed via dynamic, SEO-optimized webpages showcasing every product, category, and segmentation relevant to their customers. The result: better search-engine results that encourage more direct-channel bookings. 

Ø  User experience: Consumers increasingly utilize their mobile devices during the travel-purchase process, but their buying experiences with most carrier websites is far from `omni-channel-optimized’. “Airlines’ mobile conversion rates are already averaging roughly one fifth of their desktop conversion rates due to poor mobile user interfaces and site experience,” says Rothaus. As mobile search activity continues to grow the revenue lost to airlines by not providing a mobile-optimized experience will increase drastically.

Moving on from acquisition to ownership

Whereas Google and the travel-aggregator marketplaces have the luxury of building entire businesses around online search, digital marketing, and data-driven customer engagement efforts, airlines have to focus on their core competency: transportation. To achieve greater parity with the OTAs, MSEs, and Google, airlines will need to find cost-efficient ways to perform better in online marketing and customer acquisition, as well as deliver a desired experience across the journey.

A lead that results in a customer reaching the airline-owned platform for booking or during the course of the journey should be optimized for experience, too.

Here, too, there are huge gaps/ emerging opportunities. Few examples:

Ø  Fulfilling basic requirements via airline-owned digital assets: My online check-in experience is far from being satisfied, especially when I travel multiple airlines in one journey. While the experience of Delta and Air France/ KLM is streamlined, I struggled with my online check-in when it came to KLM and Transavia, and Lufthansa and SWISS. For instance, flying back from Barcelona to Delhi via Amsterdam, as I tried checking in via Transavia (for Barcelona to Amsterdam flight) there was an error. Also, when it came to the terminal, there was lack of clarity. In fact, when I searched for the same via Google a day before, the terminal was stated in the status of the flight. This makes travelling strenuous and the brand experience isn’t optimized. Rather if such requirements are met in an easy manner, a customer would cut down on accessing 3rd party sites every time a trip is planned.

Ø  Integrating different touchpoints: There are big gaps when we talk about customer service across different touchpoints. For example, if you want your seats to be changed after being allotted your boarding pass, which would be the easiest way? I recently conveyed the same to Lufthansa’s Twitter account. The team acknowledged but couldn’t find a way to do it for me despite a five-hour halt in Munich. The point is why social media team can’t assist, and the same could only be done at the gate. I tried self-service kiosk in Munich, too, but in vain. In fact, when I interacted with the airline staff at the gate, they weren’t even aware of this!

Ø  Product needs to stand out during the booking flow: Do I even know I am sitting in a brand new A330-300 as I take my next flight? Can I get my favourite dish as I take a 14-hour long flight? Irony is that content exists, but the industry struggles to show the same in the transaction flow. Get customers excited about your products.

Ø  Engaging loyal members: As airlines work on every bit of the passenger experience, members tend to response better. Airlines have so much data available to address individual needs, but yet they usually blast offers to all customers in newsletters, apps, social media etc. One should look at tier level, communication preferences, contextual information etc. in order to come up with offers and promotions that are likely to resonate with members. Also, the focus needs to be on predicting what they are likely to do.

Ø  Customer-centric set up: Airlines need to look at a modern CRM platform framework that paves way for integration of all relevant operational systems. Besides the PSS it’s possible to integrate an external identity and access management system as well as social media, real-time arrival and departure information and many more. “Based on all these source data it’s possible to develop applications that can use and combine these data to serve the customers in the best way,” says PROLOGIS’ Matthias Hansen, who added that such CRM platform can create customer profiles based on historical data, and are enhanced with data that the customer is willing to add. The customer service will have access on this information, so if the customer calls the call-centre, they have transparency on his/ her profile. The possible ways to enhance this initial CRM platform will be to integrate the pricing engine as well, so that the airline will be able to first identify the customer within the booking flow and then react on booking requests by offering him a unique and personalized flight-package.

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