Customer profiling will replace ‘stupid’ search, say experts

Sophisticated profiling of customers, allowing suppliers to personalise deals, is set to challenge “stupid” comparison search systems that show the lowest price first.

Experts at a Travolution round-table with technology firm partners SAS and IBM said they expected to see the use of more-intelligent revenue management systems that would allow suppliers to tap into customer data to decide what deals they offered.

These systems will know if a potential customer is a loyal former passenger, or if they are travelling on business or for leisure.

Lufthansa UK general manager Marianne Sammann said the challenge, as more people opted not to use an agent and book online, was to develop search and booking engines that could display all the different offers available.

“How do you flag that up in an online booking engine instead of just having a stupid engine that says the lowest fare of the day is such and such?” she asked.

“It’s not only on the consumer side but also on the business-to-business side where this becomes increasingly important.”

Maarten Oosten, senior analytical consultant at SAS, said he saw greater scope for “dynamic pricing systems” to further “unbundle” air fares with pricing that reflected the specific circumstances of the customer.

“It could be a business-class customer on his way back trying to change a flight,” he said.

“You may want to treat him differently than someone going out just looking for a way to get there.

“In order to really make the most of that you need to have a tool that helps the airlines and hotels to differentiate the customers and give them different replies to their requests.”

Tony Berry, HRG’s director for industry and air fare distribution, said unfettered access to product online meant travel management companies had a more important role to play ensuring travellers were complying with corporate travel policies. 

“We have actually become kings of compliance. If we don’t work in partnership with corporations we are not going to be successful because we control the booking process.”

Predictions for 2011

The SAS/IBM panellists reveal what they expect to be the main trends in the travel industry in 2011

“One of the things we are keeping our eye on is the retail Christmas electronics market for what’s going to come. We are already seeing a small but significant amount of traffic coming from iPhone or iPad or Samsung or Nokia, and while we are developing applications and mobile platforms it’s still come a bit sooner than we kind of anticipated, but all the indications are that come Boxing Day it will be all on the iPad.”
Drew Robinson, Virgin Holidays general manager sales and distribution

“The most important change perhaps is going to be brand protection and seeing how we can use all the information out there including social networks to see if we can get all the information on the table to help us understand the value of the brand and protect it where possible. You can learn things about your brand even when it’s not positive and learn things from it.”
Maarten Oosten, senior analytical consultant, SAS

“It’s all pretty chaotic at the moment. I think we’re at that tipping point where something needs to happen, either a huge investment or a complete change. It all seems very bitty at the moment.”
Douglas Acton, sales and distribution general manager, Von Essen Hotels

“I think we have finally reached critical mass in the three big airline alliances. They will start focusing on how they are going to start changing the industry. So most of our focus is going to be on what happens with the alliances next, particularly with reference to how they can leverage their technology to bring the margins up a bit.”
Jim Zalles, senior managing consultant with IBM’s business analytics and optimisation

“Mobility is a demand and boundaries are fading between what is personal and what is business and there is more focus from commodity to the value of the corporate traveller. On the personal travel side, more and more is going to go via the websites so it’s about what attracts people to the websites and then what keeps them; about how to upsell and have a good, user-friendly shopping experience, and a really good after-sales experience.”
Marianne Sammann, general manager UK and Ireland, Lufthansa

“It’s a watching brief on suppliers because differences between low-cost carriers and full-service carriers have gone away. They are both inexorably marching towards each other. So the behaviour of both ends of the spectrum is changing and there will be a greater emphasis on more services being sold at the point of sale, a lot like in leisure. There will be a lot of pressure on all intermediaries.”
Tony Berry, industry and air fare distribution director, HRG

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