How to Increase Ancillary Revenue by Consumerizing Data

Sure we may be living in the midst of a digital revolution and seeing the rise of big data and the Internet of Things. Sure, we’re all aware of how Netflix dominated the market with machine learning algorithms to provide curated choices to its audience and elevate the customer-centric experience to the point of near sainthood. So when is this digital revolution going to hit airlines? (Asks the guy standing in the world’s longest security screening line - I mean, we have self-driving cars but we still need to put our coins into trays...)

In all candor, airlines are kind of stubborn when it comes to change and they've really only focused on advancing the technology in the cabin. What about technology outside the cabin? What about the fact that online retailers are employing AI-driven suggestion engines to consumerize data and increase conversion on sales? What about the fact that 94% of CEOs consider gathering consumer data as the number one priority for their business in 2019.

Being a forward-thinking travel retailer starts by understanding the value and the goldmine of opportunity that exist within customer data. Most airlines simply aren’t taking advantage of the data they already own. You don’t need a full Artificial Intelligence platform, designed by NASA to start using your existing data more effectively, but you need to start somewhere. And sooner rather than later would be nice.

First of all, what data?

Airlines know a lot of things about their passengers right now that Google and Amazon would love to have. Imagine what those data-driven digital dapper-dans would do if they got their hands on passenger information, like:

• Where they’re coming from
• Where they’re going to
• How long they’re staying in destination
• How long their flight is

Only airlines have access to this data at present, which means airlines have an advantage over companies who are competing for those ancillary travel dollars.

We should also point out that airlines need to get their basic data system and passenger apps connected and in order. You can’t have a complete, real time picture of transactional and behavioral data when you have data silos and fragmentation. This is only going to lead to chaos, with duplicated messaging, irrelevant offers, etc. So you may have tons of data, but you also need to put it in order for it to unlock the value it holds.

So what can you do with this data?

Well, in a word, personalization. This can be as fancy (think AI, machine learning algorithms) or as simple (calling your customer by their first name) as you like. The key is to make personalized offers that reflect the unique needs, pains, desires, and delights of each passenger. Your data will tell you where they’re going, and knowing a passenger’s destination can allow airlines to make offers that are location-specific, so therefore, highly attractive and relevant. Or information inferred from flight details can tell you when they’re most likely heading to the airport, giving airlines an opportunity to suggest booking ground transportation or VIP lounge access. The more relevant the offer, the more likely they’ll convert. The more conversion, the more ancillary revenue. The more… well you get the picture.

Let’s also not forget that airlines have a captive audience while their customers are in flight. During this time (which you know the length of) airlines have tons of opportunity to delight passengers by letting them shop for products and experiences to make their trip more enjoyable. The longer the flight, the more you can suggest items to help relieve stress and add to their comfort. And not just on the flight, but before and after too. You can market products at every stage of the journey and ensure that all those attractive offers are being made at the right time and the right location.

Expect the competition to come knocking

You better believe that Google and Amazon are interested in its (and your) customer data and they’re getting primed to start building a travel marketing engine aimed directly at your passengers. Airlines have a small window of time during which they have the upper hand with their passenger data. But I would estimate that you have less than a year before competitors come after your customers like Uber went after taxi passengers or Netflix went after video renters. I think it’s safe to assume that the result is going to be similar: loyalty will be given to the company that provides the most affordable and efficient service. So if you’re not getting in on the global ancillary market now (not to mention designing a scalable solution and strategy for the coming decade) you’re likely going to be left out, cause once you lose your customers’ loyalty, it’ll be near impossible to win them back. Are you Blockbuster or are you Netflix? Check your data for the answer.

If this is something your airline is struggling with, you may be interested in what our experts have to say. Check out our webinar “The Untapped Goldmine: Transforming Passenger Data into Personalized Airline Commerce.” Or else you can contact us to learn more about how the Guestlogix platform uses passenger data to deliver exceptional service and to curate content, while driving ancillary revenues. Give us a little of your data and we can show you the significant amount of revenue we’re talking about.