This article is part of our August series about travel and hospitality. Click here for more.
Take one look at the massive number of passengers traversing our airports and transportation gateways, across tens of thousands of daily airline departures, and then think about the sheer volume and complexity of data and resulting insights at their disposal about a passenger’s journey—before, during, and after.
The airline passenger’s brand interaction includes many moving parts: shopping, purchasing, ticketing, check-in, baggage check, security, preboarding, in-flight product delivery, cabin crew communications, and the many other connections that shape the passenger’s perception of the product. And that doesn’t factor in when things go wrong: bad weather, aircraft maintenance delays, mishandled luggage, and missed connections, to name a few. In addition, airline customers fall into many segments: business, leisure, advance purchase, fare type, fare inventory class, among hundreds of other key segmentation criteria.
By the year 2035, air travel is projected to double to over 7 billion passengers. Gaining insight into the passenger journey and behavior will continue to grow in importance. Airlines are building on a tradition of operational excellence to gain a deeper understanding of passenger behaviors, actions, needs, and desires. Airlines are aligning employees, passengers, and product delivery to ensure a better customer experience as well as drive a sustainable return on investment.
Leveraging available data empowers airline employees to create personalized customer service experiences. This capability can mean the difference between winning over a new discretionary traveler and losing a long-time high-value customer.
Airlines can take four critical steps to capture maximum ROI from data-driven customer experience management.
1. Gain a 360-degree view of the customer experience: Airlines need to link interaction, transactional, and behavioral data for a complete view of how customers are interacting with them. Doing so can provide insight into which flyers are truly loyal to the airline—not just buying tickets and signing up for a frequent flyer program, but also clicking on emails and sharing their upcoming trips on social media.
With this blend of cross-touch-point data available at their fingertips, front-line personnel can prioritize how to spend their limited time. Airline customers want the same thing they do from other industries: When things go awry, they want to be acknowledged. Creating an environment where all customer data channels are accessible and easily interpreted in real time could provide airlines a pathway to gaining returns from managing the customer experience.
2. Measure customer value: For years, airlines have had a variety of measures to estimate customer value, including miles flown and, more recently, total spend. Airlines combine these measures, along with other metrics, to derive a lifetime value score. But very often, these metrics fall short of providing the depth of insight they require for decision making.
Other data points that are available from the airline’s analytic environment include metrics such as discounts offered and accepted, loyalty member acquisition costs, retention rates, and marketing costs.
In addition, a more precise understanding of customer value can then be compared to service delivery breakdown. Customers with high value and a high level of service failures must be communicated with and marketed to differently. The comparison of a more detailed customer value with key operational metrics can provide the airline with a significant competitive advantage.
3. Correlate customer value to experience: Once an airline understands the entire customer experience, including behavioral product selections at specific dates, departures, and fares, it can then measure and predict the impact of specific service delivery treatments to changes in future purchases and a corresponding change in lifetime value.
Airlines, like other businesses, focus on a variety of activities: win new business, retain existing business, preserve profitability, improve customer experience, expand loyalty program, and facilitate cross-channel conversions.
The first three factors are fueled by a customer’s purchase experience, which for airlines is especially multifaceted. The remaining factors are better understood when measured against experiences over time. For airlines to gain the greatest insights, they need to prioritize their data analysis investments.
4. Create journeys designed to drive value growth: Once airlines correlate experiences with increased customer value, they can focus on providing targeted segments with specific journey experiences. Additionally, airlines are better positioned to manage service disruptions, such lost luggage or missed connections.
Every airline has procedures in place to address these disruptions, but it is the airline that recovers fastest and communicates more effectively with the passenger that will retain existing travelers and win over new ones.