Amid today’s digital era, many travel companies are still living in the “analog” world of developing relationships with customers. The “mass production-mass market” mindset that emerged out of industrial revolution has unfortunately survived through the advent and maturity of the World Wide Web.
Mass market mentality combined with lack of a data strategy heavily emphasizes products and services, putting the customer last. Most companies don’t go beyond mass communication with consumers, which results in one-way conversations.
Today’s customer is well-informed, leveraging social media to learn more about the product, seek recommendations/opinions, and provide product feedback. If companies have not leveraged data or digital capabilities to re-imagine the purchase path and inspire customers to buy their product or service, they are well behind the curve. PepsiCo is one company that has been successful in rethinking the role of the customer in a brand. LAY’S s “Do us a Flavor” campaign resulted in customers creating and voting for new flavors.
We are seeing a changing mindset in the travel and transportation industry. Uber and Airbnb are disrupting business models through customer-centric design, shared economy, and simplicity. To improve based on customer feedback, Airbnb's CEO used Twitter to ask users for product feedback.
Thanks to IoT, digital cloud technologies, and the declining cost of storage, data is collected from everywhere – internal systems, transactional systems, external (social media) sources, and devices.
However, in many cases we are seeing that data is not leveraged for better customization:
- Data is not consolidated and lives in silos.
- Only “structured” data is looked at.
Customers are to provide more personalization – offering the right product at the right time in the right situation. Customers expect the level of personalization provided by Netflix and Amazon in almost every only interaction, regardless of whether the company is in the retail, entertainment, or travel industry. When they experience features, such as a recommendation engine, they get to what they need faster and company revenues increase in turn.
If you notice one thing that’s common between an Uber, Airbnb, or Amazon for that matter, it is the platform. Platforms are becoming the core of the digital economy, and they enable enterprises to provide curated personalized experiences for their customers.
Every large enterprise is building a platform (Enterprise API) to encapsulate core business logic that can be served to upstream channels like mobile, websites, call center, and kiosks. These APIs get opened for external business consumption to build new business models and partnerships. Using Data Lake technology, these enterprises are able to build a data management platform that can aggregate, build, and enrich customer/consumer data. By applying big data technologies, machine learning, and advanced analytics, enterprises can build a 360-degree view of the customer.
This results in a customer-centric strategy. Customers expect to be put first and are demanding from travel companies. If they perceive that their airline or hotel chain of choice is behind the curve in personalization, they just might take their loyalty elsewhere. The cost of acquiring a new customer is at least four times more than keeping an existing customer. This, combined with the increase in revenue from up-selling and cross-selling that personalization provides, should put technology initiatives that increase personalization at the top of the list for any travel company.