Abstract
Commoditization of air travel, volatility in operating costs, and a hyper-competitive environment have long put a strain on the profits of most global airlines. Their recent return to profitability has led to cautious bullishness among airline executives—in the hope of offering such remarkably differentiated services that price will not be the only metric customers look at. Offering personalized services can provide much-needed respite to airlines from the downward spiral of continuous price cuts.
Customer Experience is the Game Changer
The rise of enterprise mobility, omnipresence of mobile devices, and robust back-end systems with unprecedented data processing speed provide the necessary infrastructure required for offering personalized contextual services to customers. Success of such endeavors will depend on the ability of airlines to understand the personality, attitude, situational needs, and real-time location of their customers consistently at all touch points. Furthermore, a consistent personalization strategy across channels is important in achieving the best results. Airlines that stand out from the crowd by delivering a consistent and coherent customer experience ensure a profitable future. A good understanding of the unique needs and expectations of the customer brings with it a greater opportunity for revenue expansion and bigger wallet share with increased loyalty and opportunity for upselling. This whitepaper gives insights into how global airlines can guarantee customer-centricity and leverage customer experience (CX) to increase their revenue footprint.
Deep Dive: The Customization Process
A typical process of delivering customized services starts with data integration, followed by creating a single view of the customer, assigning a situational personality to the user, and finally deriving and delivering actionable insights.
Data Integration
With myriad applications working within independent data sources, obtaining a comprehensive view of customer data to gain actionable insights is a challenge. However, technologies exist that can help in collating data from various sources. Three possible and prominent options include:
- Data Warehousing: Data extraction and transformation can bring all the data together in a data warehouse, which can then be used by an analytics engine to deliver customer insight.
- Enterprise Service Bus: A customized splash page on HTML5 was provided which allowed the client to brand it according to their guidelines. The page also incorporated terms and conditions around the use of service by the customers.
- Integration Suites: Whilst the client saw cost reduction, they also benefited from richness in functionality and service availability. We ensured that the average wait time for passengers could be estimated from the Internet browsing time.
Customer Value Map
In order to provide personalized services to customers, airlines must work towards understanding their needs and preferences—especially situational needs. While some preferences, such as seating and meal choice, are clearly stated by the passengers, understanding the perceived needs in a particular situation is the key to a successful personalization strategy. The first step towards a personalization strategy is to accumulate customer data from all touchpoints and assimilate it into a customer value map that can be accessed by all frontline airline staff and analytics engines, resulting in consistency in customer service efforts.
The customer value map consists of four important components:
- Demographic profile data
- Customer value
- Preferences
- Service details
Historical data pattern analysis is used to identify customer preferences. Some details that could be used in the customer value map are as follows:
The attributes of the customer value map are obtained from various systems, which are detailed below.
Customer Value
As the name suggests, customer value represents the importance of a customer to the airline. This will determine the level of service personalization airlines can offer profitably. Customer value can be determined on the basis of:
- Frequency
- Recency
- Monetary Value
One possible means of calculating this value may be “the present value of all past transactions.”
Contextual Persona
Personas offer a well-rounded representation of customers—who they are, what they want, and why they want it. Contextual persona takes into account a customer’s reasons, goals, behaviors, desires, and expectations in a particular situation.
Creating a contextual persona of a customer involves understanding the customer’s travel reason, their pain points, and most likely reaction to certain unwarranted situations. Airlines should conduct qualitative and quantitative research to create contextual personas of their users. A small list of 5-7 contexts and 5-7 personas within each context is a good starting point.
Passengers should be assigned a contextual persona during their travel/interaction with an airline. It can be derived by analyzing trip details such as number of tickets bought together relation to people traveling with the primary traveler, age of the travelers, and destination choice. A heuristic rule-based engine is very effective in determining the contextual persona of the customer.
- Frequency
- Recency
- Monetary Value
One possible means of calculating this value may be "the present value of all past transactions.”
Actionable Insights
Actionable insights are derived from historical details in the customer value map and contextual persona. Predictive and prescriptive data analytics tools generate these actionable insights, which can be different for different functional areas of the organization based on their objectives. For example, a marketing campaign aimed at encouraging a customer to book with an airline would send suggested vacation destinations to customers who plan their vacation when the campaign is effective. The cabin crew’s actionable insight may include an offer to sell local SIM cards to an international traveler.
Two important components in delivering actionable insights are the customers’ value to the airline and their social influence. A high value customer-facing service disruption might be appeased by a personal communication followed by a quick service resolution. A low-value customer with greater social influence, on the other hand, might require service upgrade along with personal attention. Some of the actionable insights may be as simple as cabin crew apologizing and offering refreshments to a person who has missed a connecting flight.
Delivery of Actionable Insights
The advancements made in technology allow airlines to offer personalized services to a customer at multiple touchpoints. Actionable insights can be.
delivered via a channel or agent of the customer’s choice. For example, crew members can communicate directly with passengers about a concierge to assist them to board their connecting flight on time. On the other hand, an option to select gourmet meals onboard can be delivered via an SMS or PUSH service to users when they are at the airport. While delivering automated personalized services, importance should be given to the preferred communication medium of the customer (identified in the customer value map).