The drivers behind airline digital transformation

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The success of online giants such as Amazon and Netflix relies, at least in part, on their ability to understand their customer. The companies have achieved global success, with their customers enjoying the benefits of logging into their account and instantly being presented with highly relevant content, tailored to their preferences.   

Today retailers, online streaming services and even automotive firms have reinvented the customer experience to provide personalised content. However, the airline industry’s main focus is on traveller needs, rather than what individuals truly value.    

Traditionally, airline brands did not need to intimately understand their customers in order to compete within the market, as they often had a monopoly over a route or region. However, the market has since evolved with travellers focusing more directly on choice and flexibility. Traditional airline segmentations are less relevant, as new offerings spring up outside of the standard long and short haul journeys. Heightened expectations from airline customers are coupled with increased competition for the most popular routes, is driving airlines to change the way they merchandise their products.  

There are endless factors that might influence whether a traveller makes a purchase with a brand or not. These are not constrained to only personal preferences – the device they are using, the time of day and even the weather can have an impact. This means airlines are evolving to look beyond basic segmentation of their customers and aim to understand what individual travellers value each time they make a booking. 

Price vs Service vs Convenience   

In order to get to grips with what travellers value, a report by Amadeus, ‘Embracing Airline Digital Transformation: a spotlight on what traveller’s value,’ suggests that airlines should use a Price vs Service vs Convenience paradigm. The saying goes that everybody has a price. But in order to have a price, everybody has to have a value. The idea is that for airline customers, this value is the sweet spot where they feel that the balance between product, service and convenience is achieved. 

This value will differ depending on the type of traveller being served. A backpacker might look for the cheapest flight possible; a business traveller will need a direct flight at a convenient time and family might look for priority boarding and supportive staff. While this may seem somewhat obvious, it is how this offer is communicated by airlines to a prospective customer while they are searching for their trip that is important. 

 Communicating the true value of the offer 

When travellers search for a flight, unless the airline is able to convey how they differ from their competitors in terms of product, service or convenience, the customer will base their decision on the only variables they can see when searching online: price and flight schedule.  

This is a wasted opportunity to sell the customer something they want, and for them to engage with an airline’s unique offering. 

Instead, airlines are starting to transform their websites as a portal between their customers and their brand. Embedding useful data, such as what seats are remaining on the flight they are searching for, can make the shopping experience much more engaging and allow the customer to understand the potential value of the product before it is purchased. Iceland Air has taken a more literal route to this and shares aspirational photography, along with promotional opportunities to add a stopover in Iceland on the way to the US or Canada, on their website. This helps travellers visualise their potential trip and positions the airline in a different light.  

It is also important for airlines to understand their potential passenger’s entire online persona, as this can help them to communicate the best offer for that individual. The online travel platform, Fliggy, is one tool that is helping airlines to achieve this. They are part of the ecosystem of the Chinese online retail giant, Alibaba, and can therefore interpret every online purchase made by that person. This allows airlines to push relevant content to customers browsing their sites. If a consumer has recently been purchasing bikinis and snorkels, airlines can share beach holiday options, rather than a trip to a ski resort. By using intelligent tools such as this, airlines can ensure they are marketing their products effectively and ultimately create a more valuable relationship with the consumer.  

Speaking passengers’ language 

Many consumers today are accustomed to being presented with information instantly. Whether they are tracking a parcel or waiting for a taxi, real-time information has become the norm. Today, however, airline trips remain fairly fragmented and the customer is not provided with as many updates as they have become familiar with. By moving towards a more conversational style of communication, airlines have the opportunity to stay in touch with their passengers on trip, and will gain more opportunities for upselling opportunities.  

In coming years, it is predicted that airline sales will move into social media channels, such as Instagram and WhatsApp. These could even take place in a playful manner, which simulates what younger consumers are used to today, with the filters and accessories included on their apps. While it may seem frivolous, keeping up with the way that consumers shop, play and interact with technology will be important to all businesses in the future, especially those with a market as competitive as the airline industry. The rewards are there to be reaped by those who are willing to embrace the challenge and make brave changes in the way they engage with their customers. 

The AI agent 

Despite the importance of an innovative digital channel, the fact that air travel consumers are continuing to seek advice from multiple sources highlights the importance of maintaining an omni-channel approach to customer service. 

As well as the fact that a small minority of consumers remain unfamiliar with booking air travel online, airlines should consider how they can inspire their customers to try something different. So far, most technology has concentrated on helping consumers search for things they know they want to find – but what about trips they had never previously considered?  

This is where the role of a traditional travel agent, or a frequent flyer membership programme from an airline, is key. They have the ability to read their customers and instantly understand most of their needs. 

A dialogue of suggestions can begin and agents can pin-point exactly what their customers are looking for with relative ease. 

As technology evolves and improves its ability to replicate the above process, the need for traditional agents will not be negated. Rather than eliminating the need for a human touch, tomorrow’s technologies will work with agents to provide the ultimate service. Fully automated chat bots are in no way ready to be used to solve all a consumer’s problems, but machine algorithms can overtake menial tasks, which will allow agents to focus on delivering a personalised service. 

It is these key technologies, coupled with organisational change and greater collaboration across the industry, that will enable this move towards customer-centric airline digital marketing. By understanding what customers truly value, and communicating these offers in a personal, engaging way, airlines can open their customers’ eyes to a world of niche travel experiences they may not have previously considered and create a unique position for themselves in a crowded marketplace.  

Robert Sinclair-Barnes, Strategic Marketing Director, Amadeus Airlines 

Image Credit: Robert Stearns / Pexels