What is the key to personalization? Hint, it’s not NDC

AeroTime is excited to welcome Ann Cederhall as our columnist. An instructor with IATA on Airline Distribution Strategy and with Aeroclass on Airline Retailing, Ann is a frequent speaker and panelist at industry events. She has authored numerous highly regarded articles and white papers in the travel industry press. As one of the owners of the consulting firm LeapShift, Ann brings an extensive track record of delivering business value in project and product management roles worldwide. 

The views and opinions expressed in this column are solely those of the author and do not necessarily reflect the official policy or position of AeroTime.   

What is the real key to personalisation? Here’s a hint, it is not new distribution capability (NDC). 

The real key spells CDP, which stands for customer data platform. But we don’t need to get wrapped up in which acronym to use. We can call it 360° platform or full customer view, it doesn’t really matter.  

Wouldn’t you rather be predictive than reactive? CDP and automation help you with doing just that. The magic lies in harnessing, centralizing and crunching as much relevant anonymized and personal data as possible and applying it. It goes without saying that you must adhere to rights of privacy such as GDPR, the American Privacy Act, etc.  

What has been a game-changer for CDP is AI (Artificial Intelligence) and ML (Machine Learning). Both AI and ML are models that work with data you can “train” and improve.  

In my opinion, ML is currently the more relevant tool and is seen as the real industry game-changer. It’s more scientific and easier to understand from a toolset perspective which means that it is safer to apply when dealing with sensitive data. AI and ML often work side by side, each fulfilling its own function. And a great benefit is freeing up time. The marketing teams need to focus on strategy and execution rather than data handling.  

This article is aimed at describing the benefits in a simple way rather than an attempt to deep dive technically and looks at the relevant data that can help an airline (or any company) with personalization.   

A CDP is all about the following: 

Customer intent – collecting and analysing what the customer is looking for 
Purchase history – what is the customer buying and when? 
Travel patterns – when does the customer typically arrive at the airport? Or visit the lounge? 
Customer journey logs – what has happened throughout the customer’s travels? 
Interaction with the airline – when and how does the customer contact the airline?  
Measuring CDP value  
Customer intent  

Intent is a key component for CDPs, as it triggers actions toward the customer. Collecting and enriching data, then understanding intent (in real time, online) allows airlines to respond promptly and adequately – not too late or too early – which drastically improves the customer experience. 

Purchase history and patterns 

Personally, I limit my use of the word “behaviour” specifically because CDP doesn’t directly analyse behavioural classifications. With some regulations, this could even conflict with GDPR, as psycho-emotional data can be considered “health information” which is protected. 

CDP is all about segmenting customers, and there are various approaches that indirectly reflect behaviour but aren’t fully based on it. For example, “loyal/disloyal, at-risk of churn,” “last-minute buyer vs. early planner,” “price-driven vs. comfort-driven,” or “responsive vs. non-responsive to communication”. These create detailed customer profiles without conflicting with more sensitive information.  

It also comes down to your relationship with the customer. Would I be willing to provide more information about myself to get better offers and service? My answer is ‘yes’.  

I always buy fast track and an overhead bag, and I often buy lounge access. I would love for the airline to make me an offer such as “here is fast track and bag in hold at a 10% discount”. Suddenly, I feel seen and immediately an emotional connection is established. AI and ML are also of great help when it comes to purchase predictions, offering up suggestions based on, for example, what other passengers have bought. 

Travel patterns 

Travel is stressful, and so anything to help relieve pain is welcome. I love it when theapp messages me where my next gate is, how far it is to walk, or whether there is congestion at the airport. By knowing the type of traveller, you can alleviate pain as well as engage proactively.  

CDP can also help in identifying ‘churn’ (which means how often the passenger cancels and rebooks) and it can also predict whether you are at risk of losing the passenger and help with retention strategy.  

The journey 

Stuff happens. Flights get delayed, aircraft are changed, connections are missed, and bags are lost. By recognizing what has happened and keeping track, it is easy to say, “we apologize and here is a token of our appreciation for your patience” or “we apologize for the delay and please find attached a discount to be applied for your next trip”.  

And then there is the post trip opportunity. Leisure travel customers are inclined to book their next trip when they have just got back. It would be fantastic if you got the message to say, “Ann, we know that you want to go to Tbilisi, we have a special to Georgia in May”. But at the same time, if I have just returned from a trip where I have suffered flight delays and problems enroute I am not likely to book.  

Interactions with the airline 

Interactions with the airline are of enormous value. The last time I called an airline was to report a serious functional error and, sadly, the person I talked to sounded like he’d pay money to get rid of me as quickly as possible. It is a huge commitment for a person to take time to report something and of enormous value. It should be tracked.  

Measuring CDP value  

In my humble opinion, the quality and quantity of properly digitized customer knowledge is directly proportional to how the market might value an airline. And not only how the customers perceive the airline. If I were an investor, I’d be more inclined to invest in a company that knows its customers well and, more importantly, knows how to use that knowledge to create and deliver value. Passengers, in my view, easily pick up on these ‘vibes’ and can quickly (often subconsciously) sense whether an airline is adding value.  

CDP doesn’t have to be astronomically expensive or take an army of consultants to implement. There are solutions for all types of airlines and budgets. But don’t make the mistake of thinking that a CRM is the same as a CDP. It is far from it. My advice is that you identify what you want from a CDP. I would recommend that you consider CDP in the following areas: retail, personalization, customer service, marketing and sales.  

Start by identifying some use cases you would like to offer and areas you would like to improve. Always remember that you have enormous value in your existing customer feedback and loyalty program – leverage it.  

Another huge advantage is that travel is sexier than a hardware store and people enjoy giving feedback which is not necessarily the case with nuts and bolts!  

And lastly, has any of this anything to do with NDC? No, NDC is a messaging standard. It cannot achieve personalisation or relevant offers.  The post What is the key to personalization? Hint, it’s not NDC appeared first on AeroTime.

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