Travel technology is now at a point where airlines can do virtually anything with the right partners and platforms, yet in many ways, legacy systems – and legacy thinking – have limited their ability to gain actionable insights into their passengers’ behaviors and motivations.
If airlines don’t know what their customers are doing or feeling (or aren’t acting on that data), how can they remove travel stressors like hunger or boredom and positively change passenger experience?
Airlines already have more passenger data than they could ever use. They don’t have to “boil the ocean” to put their data to use by spending time trying to connect silos such as CRM, PSS, loyalty, booking, and other systems. This can be hard and takes time – but useful data is already available and ready to use.
Airlines know who their customers are, where they are going, in which seat they’ll sit, what they like when they’ll leave – and when they’re coming back.
The trick is getting all of that data together and using it in the most effective and profitable ways.
To help airlines get started, here are three specific areas of the passenger journey where better use of data can help identify, anticipate and solve customer pain points.
The Day of Travel
Overall, in-flight sales have been flat across the airline industry for the past several years, even as ancillary merchandising has really taken off.
Outliers that have “beaten the trend” have been the airlines that use their onboard retail platform to extend their offerings to the entire day of travel.
By offering items like jumping the boarding line or pre-ordering food from the moment the passenger purchases their ticket, not only has the window for revenue expanded greatly, but passengers now have some control over their journey.
It allows them to customize some additional aspects of their trip, creating the positive emotions associated with affirmative decisions and/or purchases, rather than feeling forced to pay for things they used to get for free.
The Onboard Experience
According to the London School of Economics, inflight broadband could create a $130 billion global market within the next 20 years, resulting in $30 billion of additional revenue for airlines by 2035.
Airlines will need to connect their data silos and build out their retail systems if they want to capture this opportunity.
Unfortunately, catering vendors still control the central onboard experience by virtue of the trolley, but a caterer doesn’t have the keys to all the passenger data that the airline does.
Airlines can regain this retail program by integrating the onboard experience into a larger selling window across the day of travel.
But to do so, they need the data and retail systems capability to personalize options, make recommendations and predictions, and create a seamless path to purchase.
Baggage and Boarding
Some airlines offer a baggage tracker to passengers via a mobile app, eliminating the stress of waiting and worrying about the potential of lost luggage.
The upshot of this approach for airlines is that they can reduce passengers’ stress triggers (worry, boredom, anger) while boosting the opportunity for sales through an ancillary service offering.
Recognizing this opportunity, Delta recently spent $50 million on its RFID system for baggage tracking – and likely anticipates a return on that investment.
Like baggage, the boarding process is another built-in opportunity for passengers to turn potential “losses” (long lines, no bin space) into gains (jump the line privileges, guaranteed bin space).
Imagine if passengers could simply open an app on their smartphone and pay for what they want, right there at the gate with no assistance from the desk…
Airlines generate $57 billion in ancillary revenue every year, amounting to $15-$17 per passenger. But their selling window doesn’t have to end at the arrivals gate – airlines can double, triple or quadruple ancillary sales by catering to the “connected” traveler at their destination.
During airport arrivals, airlines can boost passenger experience and extend their selling window to after the flight, simply by connecting passengers to other services (limousines, hotels, activities) through the airline app – personalized just for them based on the airline’s data.
These four stages of the journey represent the most common areas where airlines can use data to improve passenger experience and drive revenue, but there are many other areas where passenger data can be invaluable.
What matters is your airline’s commitment to incremental changes that directly improve the everyday passenger experience. The goal is to make every passenger feel first-class, even if they aren’t flying first-class.
The gap between what many airlines think they’re doing for passengers and how passengers actually feel has been growing for quite some time.
But instead of dwelling on who’s to blame or how it happened, the best way forward is to fix the passenger experience little by little.
Here’s a quick and easy “plan of action” for airlines thinking about new possibilities (and technology solutions) for their “untapped goldmine” of data and revenue.
- First, airlines can expand the sales window from onboard the aircraft to the entire “day of travel,” and offer a much-expanded catalog of goods and services.
- Second, they can create a direct channel to passengers via mobile app, leveraging machine learning to create individual passenger profiles, but also to create “people like me” personas.
- Third, implement a full campaign engine for retail analytics allowing them to drive targeted, personalized marketing campaigns.
- Fourth, use data analytics before, during and after the flight to make product recommendations based on data insights and algorithms.
- And fifth, use data insights to optimize inventory and get the right products on the right flights, to the right passenger and at the right time.
Best of all, this simple plan of action doesn’t require that airlines “boil the ocean.”
They often imagine that the sheer scope of upgrades needed to improve the passenger experience excludes making even gradual or incremental changes.
But other global brands like Starbucks or McDonald’s didn’t transform their retail systems overnight; they were phased in alongside legacy systems, calibrated and tweaked incrementally, and addressed certain processes and customer pain points before others.
For airlines, passenger experience is the best place to start, because it impacts the customer most directly and can leverage their mobile devices as hardware.
Just focus on using data to solve specific problems and create immediate revenue opportunities – that is a strategy for airline success.