Take a look at the most successful businesses today, in any sector and they are tailoring their products or services to meet their customers' individual needs. Whether it's offering preferential rates for loyalty, or tailored advertising based on buying habits, companies that are embracing new technology to achieve personalisation are giving themselves the best possible chance to drive revenues. Travel is no different. Consumers expect to be treated as individuals, whether that means being recognised as a repeat customer or being offered bundled ancillary packages to create a customised travel experience.
Airlines are thinking about this more and more, partly driven by growing competition from low-cost carriers (LCCs). To differentiate their offerings, they are now integrating customers' personal data into the search and sales process, enabling them to deliver personalised customer offers based on individual needs and preferences.
Airlines are also maximising their revenues from ancillary sales, which were worth $31.5 billion globally in 2013, up a staggering 1200% since 2007 (from the annual CarTrawler review by IdeaWorksCompany). However, despite their growing dependence on ancillary revenues, many have yet to capitalise fully on the commercial opportunities available.
Creating 'stickier' customers requires a more agile, smarter approach to distributing and selling unbundled products. Not only must airlines eliminate disconnects in the booking processes for fares and ancillaries, they must also collect and analyse data to support personalisation, making it possible to reward their loyal customers.
So what can travel buyers learn from the airline experience and how can they explore ways of giving their customers the most personal experience possible?
Buyers firstly need to be able to access the most comprehensive travel content possible, including ancillaries from LCCs and rooms at independent hotels. They need to be able to clearly see suppliers' key sales messages, products and services in a graphically rich format, enabling them to effectively articulate, compare and contrast the value of these products. By doing so, they can then better tailor their suggestions and itineraries to their customers or corporate travellers.
The fact that buyers currently need to break out of their standard workflow to book ancillaries, for example, reduces efficiency and slows down the booking experience. Even more importantly, buyers can't easily access information about ancillary products from within these systems, making it impossible to offer a truly tailored service to the end user.
By offering personalised choices, buyers can increase the chances of take-up from their customers while keeping costs down. However, to really achieve effective personalisation, buyers need to get to know and understand their customers and their travel habits. When do they like to fly and from what airport? What seat do they prefer? Do they travel with hand baggage only? Do they pay for meals or additional leg room? What sort of hotel do they like to stay in? All of these things are important to know and understand.
This shift in approach also turns a one-off 'transaction' into a long-term relationship. However, a shift in mindset is needed to achieve it. It's about searching and booking intelligently. By knowing your customers' travel habits and preferences buyers can not only tailor a trip to meet their specific needs but add real value by building in the options they really want to see.
Buyers leading the way in this space are working with intuitive corporate booking tools that get to know a business traveller's preferences and proactively suggest options that best suit their preferences. Some are also taking a lead from travel agencies in the leisure space who are more effectively using PNRs that give them a better understanding of a traveller's unique history so they can see travel patterns developing over time.
While ours is an industry that is slow to accept change, the trend towards personalisation means that established ways of working are no longer fit for purpose. What's needed is a new approach to merchandising and distribution that makes the full range of travel content, including LCC fares and ancillaries from airlines and independent hotels as well as the leading chains, available to buyers from inside their existing booking process.
Change is always a challenge, and successful migration to a flexible, next-generation merchandising and distribution platform requires vision, strong leadership, investments in technology and effective risk mitigation at every stage of the process. The potential prize for travel buyers is worth it though and by moving to a more customer-centric approach, they will build long-term relationships with corporate travellers that last the test of time.