A record-breaking 4.1 billion passengers flew on scheduled airline services in 2017, according to a report by the International Air Transport Association. Yet how much do airlines typically know about their passengers?
Customers have been providing the airline industry with a variety of data since the 1960s. It's time airlines put that data to work.
To serve someone well, you must know them well. Customer data can help build this understanding by highlighting the connections and interactions between a customer and a brand. Digital companies use this information to create more relevant interactions with their customers, which ultimately helps their business.
Airlines, too, can tap into their rich stores of customer data to enhance the customer experience and distinguish their brands in an increasingly competitive market. The first step? Airlines need to think of themselves as digital companies first and transportation companies second.
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What it Means to Behave Digitally
Behaving digitally means aggregating information you collect from your various points of customer engagement to create new value and foster intimacy.
Each interaction between a customer and an airline is a data point. Digital companies combine the data from these individual interactions to create a holistic view of the customer and add context to the relationship. With a digital mindset and a focus on actionable analytics, airlines can find many opportunities to enrich and personalize their consumer-facing programs.
Customers Crave More
Customers today are adept at sourcing travel information and accessing data from many entry points, be it their mobile devices, websites, social media or the ticket counter. Airlines must unify these channels to create a seamless, consistent and differentiated passenger experience. At the same time, they must seek to capture and retain travelers by offering new and relevant opportunities.
Think of it this way: Passengers have complex tastes and preferences that can vary from trip to trip. Perhaps a customer prefers booking an aisle seat for a lengthy daytime flight while opting for a window seat during an overnight flight. Capturing these nuances, and ensuring each customer interaction reflects the most up-to-date information, is essential. For example, when a customer checks in at an airport kiosk, the system should be able to recognize their preferences and loyalty status to offer the most relevant experience. Surfacing outdated information or providing irrelevant promotions could end up frustrating customers, rather than enriching their experience.
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Sky’s the Limit
When airlines think like digital companies, they stop focusing on where customers are flying and start thinking about why they’re flying. If an airline knows where its customer has been, why they traveled, and what they preferred, could it improve the customer experience? Certainly.
Airlines could offer discounted flights for a traveler’s birthday. Or optimize the flight experience based on the purpose of travel — business versus leisure, for instance — by using context captured during the booking process (Did the customer use a corporate card? Are they traveling solo or with children?). Perhaps seating plans could automatically assign an individual to their favorite location on the plane or trigger a notice to the flight service team to offer the passenger their favorite beverage. With shared and accessible information, airlines can drive ancillary sales and create loyalty-building personalized experiences.
Digital organizations engage customers differently — to the mutual benefit of the customer and the company. They move their business from a transactional mindset (here is the merchandise available) to a subscriptive position that recognizes the customer as an individual. With a holistic view of each customer, airlines can make compelling service offers to meet and exceed customers’ needs.
This carries over into cargo journeys, too. Customers today have a general view of their cargo logistics as “somewhere between Kentucky and Michigan.” But what if it were possible to track a package’s transit completely? Airlines can do this by using real-time contextual information to create compelling advantages.
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From Retailer to Digital Company
Some well-known online retailers already operate as digital companies and use data to execute sales. They recognize the individual traveler and shopping history. They monitor what they buy — and what is left in an online shopping cart. They then combine the data to make individualized, proactive offers.
For example, a customer purchases a wallet online for $200. They like the wallet so much they decide to purchase it as a gift for a relative. When they visit the site, the wallet costs $100 more. They decide not to purchase it, abandoning the wallet in their shopping cart. In this situation, a digital company could trigger a price adjustment to encourage the sale.
This example demonstrates the merchandise doesn’t matter. What matters is the context created by data from previous purchases. Data analysis can close the sale when the company acts digitally first, and as a retailer second.
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Customers Are On Board
Customers are willing to provide information. Think about businesses that stream on-demand media. Subscribers are happy to have their viewing and listening histories logged and will rate content in exchange for a unique experience. The streaming business relies on this core of collecting, managing and using information to deliver not movies or music, but value.
Beyond just accepting it, customers are beginning to expect it. They’ve experienced holistic, consistent and customized experiences in retail, media and other industries. So it's time for airlines to begin connecting with customers in new ways that are tailored to their preferences.
The next disrupter in the airline industry will be a digital company that can leverage its expertise in transportation to serve someone well. It might not even be a transportation company at all. Disruption could come from alternatives in the market, such as a travel aggregator site with strong brand equity, begging the question of who ultimately powers the customer experience. Airlines must act now to discover and deploy the digital opportunities that will allow them to tap into their powerful customer data and reach new heights of service.
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