24 June 2015

Airline Customer Centric view – Time to do or die

There was a time when airlines would focus mostly in their flight operations, in transporting passengers from one place to another without knowing who the passengers were. That time has come to an end. 

With little customer intelligence spread across their present business intelligence models, airlines have been collecting lots and lots of data for historical, archiving and compliance purposes. By working on top of this information, they were able to increase their operational hindsight and insight, they were able to better the future by understanding the past and the present.

But what about the customer? What do they know about a customer that just booked a flight to Paris? Is she a new customer? Could she be interested in joining the frequent flyer program? Or is she a "known" customer? One that has already several complaints registered and hogging her with new marketing campaigns will be the trigger that will make her abandon the company?

Now is the time to embrace this new challenge: take value from data in order to get customer intelligence, one that will allow the company to known their customers. Airlines are now facing the challenge of building a complete journey of the customer, based on both operational as well as emotional aspects, the challenge of building a CUSTOMER CENTRIC VIEW Model.
Their future will be defined by the ability to obtain & process a Customer Centric View Model, faster than the pace at which customer behavior and business environment might change.

CRM, What Else?

The needs and goals of a Customer Centric View can be easily mapped to a CRM (Customer Relationship Management) business model. This kind of model will allow to define a unique vision of a customer within all possible customer feeds amongst their business, one that will drive the company to understand and provide solutions to their customers as a mean to the ultimate goal, increase profit.

All these goals relies heavily on being able to build an integrated view of a customer which can bring together many touch points and data sources that may or may not reside within the airlines ecosystem. This will then allow the companies to have a deep knowledge on customer profiles, transaction details, complaints, social behavior- likes & dislikes, psychographic data, techno graphic data etc.
 
However, it is easier said than done. Creating an all-containing repository of information is not trivial and it may come as a resource intensive task. Even more if we consider already existing carriers, in which the new data systems will have to co-exist with prevailing "legacy" architectures.

Nevertheless, once this intelligence sets in place, airlines can utilize it to perform behavioral merchandizing, recommend products & services, personalize their offering for every customer in a better way, up-sell & cross-sell and develop new revenue stream altogether.

Airlines getting a breath of fresh air

If we pay attention to the news, we can see how Airlines Industry is a competitive one ranging from capital-intensive operations to "market control" requirements. Nevertheless, and even when positioned in an economically harsh situation, it is still possible to take the first baby steps towards evolution.
"As we speak", there are companies that are starting to build their own MDM (Master Data Management) system, increasingly believing in the benefits of such a step. They are in fact putting in place what will be the first stones for a CRM solution, by defining the data repository that will point to a customer regardless of its touch point with the company.

Since the beginning of MDM concepts, content techniques and solution portfolios have evolved and have been swiftly progressing. He now have a market full of MDM solutions ranging from the less to the wealthiest solutions, represented in Gartner's Magic Quadrant for Master Data Management of Customer Data Solutions (October 2014):

Still, even having such options, there are situations where companies don't start walking this path with a full suited solution. Instead, they chose to start by breaking down MDM's must have system requirements, essential data flows and concepts, and started building on top of it. One could wonder if this was the best road to take since it can lead to some less positive points like increased development time, processes not so state-of-the-art, misleading problems, etc… Still, by being in the battlefield, I can see otherwise. By doing this, they gain important knowledge about their data, redefining business processes, creating rules to standardize and cleanse data sources, defining matching and survivorship rules to define what they see as their single customer.

I see them doing their homework before going full throttle on a full-suited CRM solution, a gigantic POC capable of providing a ROI in its own.

CRM… check! What's next..?

CRM Models cannot stand alone as the saviors for all customer oriented business models. With well-known analytical designs, they can tell for instance, how the frequent flyer customers have behaved with respect to point accrual and redemption pattern but they can't tell the probable non frequent flyer customers who will enroll into airlines loyalty program in the future.

For that, it requires a statistical analysis capable to predict trends and customer behavioral patterns. It requires the capability to do predictive analytics.

This technique focuses in the characteristics of the passengers who exhibit the same behavior on various attributes and uses that to find out the potential passengers who can show similar behavior, based on the correlation between their attributes. It allows to make correlations, isolating patterns and tracking trends to serve up the type of information that airlines need to tailor the customer experience for improved engagement and better profits.

Predictive analytics will allow Airlines to move from Hindsight and Insight maturity levels, into the all new level of Foresight, always towards optimization.

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   Hugo Teodoro
     Consultant