New technologies for gathering and analyzing data are bringing significant changes to how airlines use their growing cache of personal information about passengers and how agents sell travel
Under competitive pressure to differentiate themselves in the eyes of their passengers by delivering a customized service, airlines are trying to get "under their skin" in the words of one travel technology executive, tweaking the customer experience with tailor-made offers based on a combination of real-time and mined data.
For example, the tweaks might be damage control after flight delays or cancellations. An airline could put a high-value, time-pressed business traveler on the next available flight and upgrade him.
On more routine travel days, an airline could identify a traveler who has just gone through security and text her an attractively priced offer to bump up to priority boarding. At that point, the airline knows she has not checked bags and might want to increase the chance she'll get overhead space for her carry-on.
Airlines can now do this to a greater degree than ever before because they can marry real-time data about each step in a customer's travel with increasingly accurate data about the customers themselves, mined from outside sources.
"Travel agents will have to learn to offer and sell these things in addition to selling just air, car and hotel," said Bob Offutt, senior technology analyst for PhoCusWright, which is owned by Northstar Travel Media, publisher of Travel Weekly.
Airlines have always had a lot of information about their travelers. But that information was linked to PNR numbers. Both those numbers represented a single trip and meant that an airline could easily have multiple identities for a single passenger.
For example, Offutt noted that he goes by Bob, short for Robert, which is actually his middle name; That means an airline could have at least three separate, unlinked identities for him. But the move to traveler-based travel management means airlines can now consolidate all of this data into a single profile. Airlines have made this shift over the last four or five years, Offutt said.
At the same time, airlines are getting real-time data about customers as they go through the many touch points of any trip — booking, check-in, security, visiting an airport lounge, on the flight and after they return home.
Airlines can use the data to identify customer behavior patterns and know that if a customer does A and B, then that customer will probably respond to an offer for C. The intended results are a better customer experience and an improved bottom line for the airline.
For example, after a customer has passed through security an offer could be made for a bump-up to the first boarding group for $10 in order to have a better chance at overhead space.
Or it could be bundling a snack and WiFi together or offering a seat upgrade to a passenger sitting in an airport waiting area.
Moreover, these systems can place a value on individual travelers, so the airline can reserve its discounted offers to its highest-value customers.
When flights are delayed or canceled, airlines can identify the time-pressed, high-value business traveler and put her on the next available flight in a higher class of service, while offering a backpacker on that same flight a free night in a hotel.
It can even go so far as to offer a car rental to a passenger whose flight was canceled to a destination within driving distance. A four-hour drive might be more attractive to some travelers than nine hours hanging out in an airport waiting for the next flight.
Having a more complete customer picture prevents airlines from making a customer service faux pas, such as offering free entry to an airline's airport lounge to someone who already has lounge access.Company offerings
Technology providers including Amadeus, Datalex, Farelogix, Sabre and Travelport are launching these programs with various airlines. Lufthansa, for example, is the launch partner for Amadeus' Altea Corporate Recognition program, which is designed to help airlines and travel management companies provide TLC to their most valuable customers.
"What we are going to do is get under their skin," said Rob Sinclair-Barnes, director of strategic marketing at the Amadeus airline IT group.
Sinclair-Barnes said that making merchandizing offers to travelers can increase airline return by close to $20 per total purchase. Add personalization to that, and the return shoots up to almost $40.
Amadeus is deploying Corporate Recognition in both the direct and indirect channels because the majority of Lufthansa's business travelers book indirectly.
Sabre is taking a slightly different tack with Virgin America, its launch partner for a trio of personalization tools: Customer Experience Manager, which Sabre introduced last year; the newer Customer Data Hub; and Dynamic Retailer. Customer Data Hub holds the passenger information. Customer Experience Manager and Dynamic Retailer interact with Data Hub in real time to seek relevant offers for the traveler.
Initially, Sabre is offering this personalized merchandising only in the direct channel, but it is planning on making it available through the agent channel, as well.
These tools enable airlines to up-sell, cross-sell, upgrade and reaccommodate passengers. Sabre has identified 35 touch points during the planning and travel experience that present airlines with chances to make an offer to customers.
For the moment, Sabre is enabling the sale of only airline ancillaries, according to Stan Boyer, vice president of marketing for SabreSonic, part of Sabre's Airlines Solutions division, because it is simpler to implement and offers a faster return on investment. But, ultimately, airlines will be able to use the technology to make third-party offers to their customers.
Sabre sets up business rules that determine how important a customer is to an airline, and that determines subsequent actions when dealing with that customer, Boyer said. The more airlines use the system, the more data they gather, both on consumer behavior in general and on individual travelers.
Datalex, which provides e-commerce and retail software solutions to airlines, also offers a retail commerce platform that enables dynamic pricing and merchandising either bundled or a la carte. And it can personalize those merchandising offers across all devices, touch points and channels, said Brian Borg, the company's head of airline retail.
Stephen Kavanagh, chief commercial officer at Aer Lingus, a Datalex client, said the Datalex platform enables Aer Lingus to make personalized offers to its passengers.
Jim Davidson, CEO of Farelogix, which provides merchandising technology to airlines, said, "All of these systems are getting smarter."
He said that what is important about the systems evolving today is that airlines can see what works with customers and, just as importantly, what doesn't.
Davidson is working with Triometric, a service that provides service monitoring and travel analytics to enable airlines to make personalized offers to passengers on the fly. Ultimately, he said, "it reduces the ridiculous offers and starts to increase relevant offers."