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  • Writer's pictureLucy Hughes

Understanding the scale of lost opportunity through data

Updated: Dec 22, 2020

Following the success of Airline Information’s Co-brand & Travel Reward Cards Virtual Conference 2020, Group Chief Executive Paul Alexander sat down with AI's Ritesh Gupta to uncover why it is now time for airlines to count on data "to understand the scale of lost opportunity".

Paul and Ritesh considered how travel-related spending intent is shaping up, triggers for transaction behaviour, how to identify high-value customer segments and the role of data science in making these meaningful assumptions.

How have your interactions with airlines shaped up during the pandemic? How do you think data can play its part at this critical juncture?

Based on companies we interact with, I think we can divide airlines in to two distinct camps:

  • Camp 1 - those who were thrown into a panic and who are still to a large extent panicking;

  • Camp 2 - those who were thrown into a panic, but wanted to use the data they have at their fingertips and the insight we can glean from that data, to diagnose issues and attend to them fast.

And that’s what is vital - the key in the current environment (lies) in using data to diagnose issues and opportunities fast and mobilising the organization to respond at light speed. For that you need the data, the people who know what they are doing with it, the tools to automate quickly, and the organization ready to adapt. All of those things need to be lined up.

Airlines’ main focus right now is on capturing demand and taking as many bookings as possible. What role can data analytics play in revenue generation, be it via their core product, air ancillaries, non-air ancillaries etc.?

Focus on bookings is key and is the right thing to do, particularly when there is so much pent-up demand in the marketplace. As restrictions lift, airlines need to be perfectly positioned to grab that demand, which will soar and then decline back down to ‘normal’ levels (whatever the new normal is going to be). However, equally important is ensuring that delivering to pent-up demand when it is unleashed doesn’t impact upon customer experience.

We operate across multiple sectors, and we have seen instances of where retailers (for example) whose businesses have soared after retail has reopened, but then have failed to service the increased demand. Now more than ever, the data needs to be joined up to understand the customer from core transaction/booking systems, their interaction with ancillaries (non-air and air), customer feedback surveys, web interaction... Generating bookings at any cost will be good for short-term results, but beware long-term reputation damage if you can’t handle the work.

What should they focus on when it comes to sustaining spend from existing base of customers from their respective FFPs/co-brand credit card relationships?

‘Sustaining spend from an existing base’ is different to ‘sustaining spend from your best customers’ and whether it’s revenue, profit, or both. I’d argue, taking a snapshot of the most valuable customers before COVID and looking at how they are interacting now and how to engage them, as restrictions lift; how to find more of those customers, rather than all customers, will be key.

“A customer spending $1000 via a merchant’s co-brand partner relationship is spending $5000 with competition. What would you do differently as a result of that knowledge?" Beyond Analysis recommends in understanding a consumer and delivering the most relevant proposition. How airlines can focus on this?

Most businesses know what their customers are doing these days, but what aren’t those customers doing but should be, particularly if you perceive them to be loyal? I use the example of someone who heads in to a DIY store to buy tiles, but not the grout to stick them to a wall. We know they need to get the grout somewhere, so what’s wrong with our proposition – the price, or the quality of the product?

It’s time the airline industry started more extensively using data to understand the scale of the lost opportunity. I fly from London to Sydney with my favourite airline, and two weeks later fly from London to Paris with the same airline. How did I get back from Sydney? Why didn’t I choose my favourite airline? Was it price, schedule, capacity…? Industries who fail spend too much time looking at the ‘false positives’ - the people who did do something; the people who didn’t but should have done, are key to unlocking growth.

What’s your recommendation to airlines when it comes to capitalizing on data – for both the short-term and medium term?

Work within your leadership team and your experienced data partners to prioritise the activities you collectively think will make a positive difference to results. Use data to confirm which activities are actually going to make a positive difference if you can execute. Execute those activities fast. Rinse and repeat.

Credit: For original interview with AI click here.


To hear more about Paul's presentation on 'Driving Spend with Big Data' and to discuss how to implement a co-brand driven strategy contact our team of experts.


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