Take a Number: Airlines and the ROI of Travel Personalization

Are you a number or a person? If you answered “person,” then what’s the best sales experience you’ve ever encountered? Was getting a great deal the only part that mattered? When we recall the entire buying process, the people involved, the design of the store, we remember how the experience impacted us emotionally and personally. In 2005, Starbucks began doing something somewhat ground-breaking. Instead of simply writing a number or the drink type on the side of their cups, they started writing individual customers’ names. One the one hand, this simplifies things for customers who no longer need to remember what they ordered (versus what anyone else had ordered, which was practically the same - but never quite). On the other hand, the coffee company had begun to personalize service in a way that has become synonymous with 5-star service.

In our previous post, we looked at the reason why consumers love travel personalization. Here, we examine why the travel industry is sharing in that love and getting prepared for a personalization revolution in the coming years.

Take a number - this number!

By far, the primary goal metric of the most successful businesses (with three times the return on personalization) are those that focus on customer loyalty and long-term nurturing. In fact, stats show that increased customer loyalty has four times the value of short-term gains seen in increased conversion rates. If airlines believe that price is the only metric that matters to their customers, they are at risk of losing out on a valuable resource: customer loyalty. Sure, low cost carriers bring customers through the door with attractive price points on flights. But travel is more than a flight, it’s about an entire journey, an end-to-end travel experience. And this is where competition can swoop in to take a large piece of the ancillary revenue pie: somewhere else along that journey.

Ultimately, revenue from flights and traditional ancillaries like baggage, and seat upgrades won’t be enough to survive. But rather, tapping into the revenue along the entire journey by offering ancillaries that enhance and create exceptional travel experiences. And this is why loyalty matters so much in the long run. Passengers want more than merely points exchange for their loyalty. In ten years, airlines will need to provide a deeper breadth of ancillary products and services. Without a long-term relationship already in place, airlines will find it incredibly difficult to attract customers to their technology and products and don’t be fooled, competition will be steep from search engines, OTAs, and other travel/transportation technology companies.

Overcoming obstacles to travel personalization

Travel personalization is more than simply sending out emails with the recipient’s name in the subject line. To provide exceptional, customized travel information and products, airlines need to gather and act upon a lot of data. Data architecture has become a major hindrance, possibly due to the movement towards scaling up existing personalization strategies. There’s also currently a major push for investment in machine learning. Over 23% of businesses already invest in machine learning, while nearly half of the rest are planning on investing in it by 2020. What are your main challenges and are you planning on investing in machine learning in the near future?

It’s all in your personalization platform

When your passengers download your app, you begin a long-term nurturing process. However, the better the technology, the better the nurturing. A travel personalization platform with machine learning continuously gathers traveler data to make intelligent decisions about what and when products are most likely to be purchased by an airline’s travelers. This includes the days and months leading up to the flight, and also the days and months post-destination. Travelers can continue to see value from your app because you can continue to send offers and information, all based on their unique preferences, purchase or search history, and more.

If we learn one thing from Starbucks it’s that personalization never hurts. Sure, some people’s names were mis-printed and mangled, but if coffee shop service can be personalized to scale, then why not travel retail? And of course the great thing about machine learning is that you’ll never mangle a customer’s name. Learn more about the Guestlogix Travel Personalization Platform and see how quickly it can be implemented right on top of your current technology. Then discover how you can build and scale an ancillary revenue-boosting, personalization strategy with minimal start-up costs.