In travel, marketing and revenue management teams are under tremendous pressure to grow revenues while maintaining low costs. In order to leapfrog the learning curve of the online retail space, many travel operators are adopting digital consumer marketing best practices from companies such as Amazon that engage each customer more personally for higher conversion.
NB: This is a viewpoint by Andrew McAvinchey, director of product marketing for Boxever.
Ecommerce is now dominated by personalization technologies, designed to match a customer to an offer or product as early and appropriately as possible. This not only serves the customer by providing more value but also adds more to the bottom line – a happier customer is a better customer.
Business as usual risks leaving valuable revenue behind - or losing customers to competitors.
The path to personalization can be expensive and risky. Options range from buying all-in-one complex marketing solutions to cobbling a variety of marketing tools together to build your own system.
But even the most basic personalization of offers can lead to increased acquisition, conversion and retention of customers. According to Forrester research, just a 10% improvement in customer experience translates to $600 million for an airline.
At Boxever, we’ve seen it first-hand - one of our customers recently reported an additional 4.3% of revenue per month after only two months deployed. By personalizing at select points in the customer journey, our customers have seen millions of dollars of revenue, 4X conversion rates and significant increases in NPS scores.
Many ecommerce businesses see the value of 1:1 personalization, yet few travel operators today take full advantage of even the most obvious channels – web, mobile and email. So, what’s the hold-up?
Knowing your customer
Creating 1:1 personalized customer journeys for every single customer is harder than it looks. Big brands, in particular, are investing in technology stacks that will facilitate data-driven marketing that can accommodate thousands or millions of customers. They’re choosing to bank their future on knowing their customer better so they can offer more value. Having made that decision, many are then faced with other tough calls regarding cost, delivery times and return on investment.
Logistically, if you wish to serve each individual customer with their very own customer journey, it quickly increases the number of journeys to ‘one per customer’. So if you have one million customers, there are one million journeys to manage. The levels of data are massive. When you connect the operational, product and customer data of organizations with thousands (or millions) of customers, the volume increases exponentially every day. You’re looking at a huge network and terabytes of data that has to be processed in milliseconds for even the most basic personalized interaction to execute smoothly.
Connecting channels, people and ideas
According to 451 Research:
“2016/2017 will be the time of customer engagement tools to provide an interactive, personalized experience for customers and employees. New technologies such as prescriptive analytics, machine learning and modern business applications will finally help businesses embrace digital transformation.”
Customers care about being met with messages, offers and services at appropriate times. They care about getting those little extras that make a trip special. They care about great timing – getting a helping hand right when they need it, and a lift when they’re least expecting it. When it’s executed really well, technology gets out of the way.
Meeting your business objectives
Depending on many factors - including investment, time and commitment to their data projects - we’ve seen that the majority of airlines are at the beginning of their own personalization journey. They’re beginning to create segments of their customers – typically five or six.
Slicing into segments just increases their number – by the time you get into micro-segmentation, you could have 100 different groups to manage. This is pretty complex, so artificial intelligence is needed to carry out the rapid and continuous firing of appropriate offers and responses.
On top of that, you’re getting into behavioral and real-time context – knowing where, when and what your customer is doing at the time, and responding appropriately. It’s pretty exciting when you see this being done right - especially at scale!
There are a lot of steps to building out the personalization engine for your business. We call it the "personalization gap", the space you’ve got to fill in between where you are today with data and where you want to get to.
What we’ve seen with customers such as Viva Aerobus, Mexico’s fastest growing low-cost carrier, is that by uniting their data through a customer-centric cloud platform such as Boxever, they begin to see incremental value offered by sophisticated personalization long before they’d expect to with a ‘build-it-yourself” solution.
Check out this 45-minute webinar, Personalize to Win: Never Miss Another Revenue Opportunity, to hear Viva Aerobus tell their story.
The five steps you can take today to increase revenue:
1. Upsell and cross-sell every time
Travel operators are increasingly under pressure to sell ancillaries to offset low base fares. Make the most of upselling and cross-sell opportunities.
2. Every product has a customer
Build a central hub that makes customer, inventory and operational data readily available to identify and advertise to the right segments - at the right time.
3. More choice means more profit
Grow revenue and profit by adding new destinations, new customers, new products or bundles, and more trips and ancillaries per customer.
4. Make it easy on everybody
Focus on customer experience not only to keep customers happy but also because it makes financial sense.
5. Keep costs low
Become as efficient as possible on marketing and overhead costs. Cloud solutions offer flexibility, scalability and a robust platform in a fluctuating market.
Travel products can be complex while ancillary product bundling is a challenge when you’re tailoring to a market of millions. Personalization at scale gives you an ability to package and recommend products and services in a more intelligent way. This is only possible with a core platform that can rapidly interpret, analyze and act upon data for every single customer, regardless of where or when they choose to say hello.
Click here to view a replay of the Tnooz/Boxever webinar: "How airlines should never miss another revenue opportunity"
NB1: This is a viewpoint by Andrew McAvinchey, director of product marketing for Boxever. It appears here as part of Tnooz's sponsored content initiative.
NB2: Image by CreativeStudio/BigStock.