Customer data platforms in travel: Worthy of the hype?

Knowing your customer is a top priority for any company these days, especially in the B2C sector.

According to Gartner, CMOs spent a whopping two-thirds of their 2018 budgets on customer retention and growth, understanding customer needs through analytics - and spending on understanding existing customers is set to outpace spending on winning new ones.

Travel management companies like Carlson Wagonlit Travel are not immune from this trend. Historically defined as B2B organizations, in the past few years, TMCs have turned their attention towards travelers and their needs.

Business travelers are ultimately employees at work. TMCs are increasingly focused on helping them stay productive, going beyond the traditional “duty of care” approach to focus on effectiveness, well-being and personalized service.

It is not only finding the right balance between personal preference for hotel and airline versus company policy, but also about providing a smooth user experience, useful services and accurate information. The employee is free to focus on the primary reason for their trip: business.

Data - good quality data - underpins all these efforts to personalize. Data fuels the TMCs' drive to understand the traveler. Data allows the TMC to serve up the traveler's favorite boutique hotel, which is also compliant with the travel policy. 

Data helps the travel counsellor work out the best option for an executive stranded in the airport by a cancellation. Data helps create a consolidated report on travel spend for travel managers, so they can create “what if” analyses and optimize their travel spend.

But data also helps revenue managers do their day job - modeling how suppliers provide content for their clients. And it helps marketing managers put together targeted campaigns based on specific customer needs.

Large organizations have historically invested in basic tools that support personalization and marketing efforts. Customer relationship management platforms, data warehouses, digital experience platforms and master data management solutions have been around for many years and provide a best-of-breed approach to marketing needs, in the travel industry as well as elsewhere.

Those platforms have grown in popularity and become more powerful. The picture is mixed, though.

The need for customer data platforms

Often, data inconsistency is a problem. This is particularly relevant for TMCs. Business units, and related technology, often develop in silos, managing specific requirements and addressing specific business needs, without necessarily thinking beyond their particular scope.

Salespeople develop CRM systems focused on lead generation and customer management, while agents create operational platforms to serve customers on the phone or through digital channels like web, mobile and chat. Marketers focus on defining customizable analytical tools to understand customer behavior and design better campaigns.

With the increasing competition for customers, companies are crying out for cross-functional windows into that information. That‘s exposing the limitations of a silo approach to data management.

The explosive success of customer data platforms (CDP) is the direct consequence of that need. 

In a nutshell, a CDP does the following:

• Data collection: the capability of collecting identities and demographics about customers from different sources, including where they connect from, which pages they visit, with which device, credentials used, loyalty programs and previous interactions.
• Profile management: deduplicate information and aggregate it into a unique profile, creating a single view of the traveler - an employee of a specific company under a specific contract with the TMC.
• Segmentation: segment and partition customers to better target them, using predictive analytics capabilities.
• Execution: the ability to take proactive decisions on what to do and instruct execution system on how to operate; for example, identify specific customers up for renewal, and inform the marketing team who can design a renewal campaign.

Data, data, data

CDPs have been very popular in small/medium enterprises as they provide a packaged solution that covers different areas of marketing and data management in one single offering. And many vendors have opportunistically repackaged existing capabilities to serve this over-hyped market, creating confusion and overlaps.

CDPs still need consistent, accurate data: When you call your TMC call center to book your next trip, or send them an email or a chat, they still have to identify you, associate you with your customer policy, interpret your preferences and your previous interactions, link you with providers within the travel ecosystem to give you a personalized experience and then price the interaction.

Data still needs to flow to the system. And it needs to be integrated.

Integration costs have increased in the past few years, accounting for over 40% of IT spend of any organization. Impressively, in 2018, the cost of integration was approximately a third higher than the total cost of the integrated application itself!

Any organization still needs a portfolio of access points to reach their customers: mobile applications with increasingly rich capabilities to book travel, manage expenses and chat; websites and portals; third-party booking tools; phone, virtual personal assistants and the growing market of voice-based devices.

Marketing tools need to be fed with the right data and the right actions to be effective and then need to provide feedback to the CDP platforms to improve efficiency in a continuous improvement strategy. Invoices need to be issued, and operational platforms that support customers still need a master source of data to be consistent.

Currently at the top of the hype cycle, CDPs still have a long way to go to address those concerns. The bottom line is that CDPs in their current form do not - yet - meet the needs of large global TMCs.