In an age of the promises of Big Data, can travel brands finally win the hearts (and spend) of customers?
Chris Nurko, global chairman of FutureBrand, believes that as hospitality brands gather volumes of data on traveler preferences they must analyze and apply that knowledge in an empathic and predictive way, inspiring love and loyalty.
Fast-access to competitive travel offerings through online channels has accelerated the volatility of brand appeal, he tells us.
To a degree, for airlines, partnerships have also diluted the value of the offering leaving consumers insecure of whether they are buying the real brand or a code-share brand.
This brand insecurity opens up opportunities for low-price competitors, and, without a sound value proposition to counter that effect, consumers find no reason to stick around.
Nurko says:
"Brand only plays an important role when the consumer understands what the value proposition is. "The challenge for the legacy carriers, and for those dabbling in the low-cost end, when you start cutting off the brand to match pricing is that what I always thought was included in the price of the ticket is now pay-as-you-go, and it is at odds with the marketing efforts of the company."It seems like I'm being penalized. As a frequent flyer, you feel that you may as well have picked one of the low-costs."
He adds that this problem isn’t exclusive to airlines and affects all hospitality brands.
As market competition intensifies and customers gain ready-access to competitive offers, marketing and retail dynamics must become far more sophisticated.
They look with fresh eyes for data ‘lost’ through limited and impersonal analytics.
"There’s a tension between the business operations, the data analytics side, and the human service aspect. They have to recognize that they are all still in the business of service."
He believes hospitality companies should be mindful to visualize data as representing individuals, first and always, not mere numbers and statistics.
"There’s a great focus on gadgets and gizmos, rather than the people. The data is only a reflection of the customer. No one wants to be a number. You can't build a marketing strategy on a number."
Through empathic data analysis, brands can anticipate customer needs and recall personal preferences, and design more enticing people-focused products and services.
They can also eliminate common travel friction points by ensuring swift, personalized response to travel disruptions.
And, Nurko believes this strategy is essential to differentiate travel brands in price-sensitive markets.
"The challenge across industries is that brands have to be a value demand. "Because of consumers’ comparison shopping mindset, what used to be a brand-first choice, is now price first and then brand."
He proposes that travel companies look to extend personalization beyond ancillary offerings to their dynamic pricing strategies, which can buffer the direct sales channel from price comparison sites.
This would move brands beyond a cold supply/demand dynamic pricing proposition, and could be programmed to encourage positive shopping behavior, such as early bookings or frequent buys of premium products.
"If I’m traveling, I will have dynamic pricing tailored for me based on what I am most likely to want. "At the time of pricing, I see the comparison. I can see the different types of seats, the ancillaries, and I can get an exclusive real-time aggregation of offers, played out in a virtual world. Data drives those offers."
Nurko believes that as predictive algorithms get more sophisticated, it will be easier for hospitality brands to offer personalized pricing and packages, including upgrade sales recommended as ancillaries, which can be more attractive than open inquiry comparison shopping.
Guy Delandes, ecommence sales director at Collison Latitude, has predicted a similar evolution of personalization, with tailored rewards and retail promotions.
"The challenge is for managers to understand the value dynamic and ensure that what they offer now retains the value proposition for their customers."Those travel brands which are smart are managing supply and scarcity.
The need for consumer empathy also applies to the effectiveness of evolving loyalty schemes.
For example, Marriott has tapped into the psychology of instant-gratification to give its loyalty program a more human nuance with “more earnable, instant events.”
As George Corbin, Marriott’s senior vice president of digital, recently told Tnooz:
"We want to build more stickiness into more moments throughout the journey such as earning points by using your mobile key and using your points to pay for a coffee during your stay.”
Nurko also believes travel disruption management is a further area where brands need to be better at applying personalization.
"You should be very aware that when you are in service recovery mode and respond with what is always important to the customer that is easy for you to do." "Complex resolutions of trouble can follow, but if brands quickly acknowledge the problem, perhaps even before customers know it will affect them, and keep an open line of communication, then customers are less likely to be dissatisfied and more likely to remember how well they were treated when things went wrong."
He adds that the first thing is to be human and empathetic. He says.
"Understand that your role was just part of their day. That's something that customer service robots can't do. Make that a cornerstone of the brand."