Invest in technology and equip teams with the skills to glean meaning from it, says Treasure Data’s Andrew Stephenson
It goes without saying that it’s been a tumultuous few years for airlines. From pandemic travel restrictions, to a wave of subsequent supply chain issues – the industry hasn’t had it easy with the cards it’s been dealt.
If that wasn’t enough to contend with, last month it was revealed that the era of super low-cost travel could soon come to an end as the EU looks to charge carbon-intensive industries more tax to tackle emissions. Whilst the global airline industry is expected to return to pre-pandemic levels by June, this has the potential to throw a spanner in the works for customer demand over the next decade.
As airlines yet again find themselves at a crossroad, it raises the question: how can airlines minimise a subsequent drop in demand and ensure they don’t alienate cash-strapped consumers in the future?
It’s about data, plane and simple
As a critical first step, airlines must make obtaining a full 360 degree view of their customers a priority. At the heart of this is data. Travel businesses are sitting on a goldmine of information about their customers and what makes them tick – from whether they take a short escape for some winter sun each year, or have been planning a lengthy getaway.
Data will be crucial for airlines when it comes to making a calculated decision not only on how much of a price increase consumers will tolerate, but when and how the change should be communicated. It can also be used to determine things like if a penny-pinching consumer could be incentivised to complete their purchase journey by providing added extras, like a discount on hotels or transfer.
That’s why the bedrock of any strong data management strategy is the ability to create and maintain a unified view of your customer. The service airlines provide is a valued and cherished consumer expenditure, so it’s pivotal any decision made is based on a foundation of data to ensure that they don’t lose customers to better prepared competitors.
Fly through the fog by avoiding data blindspots
Despite having access to a treasure trove of insights spanning their entire organisation, it’s important that airlines maintain a connected view of their customers, otherwise it will be impossible to provide the service they expect. This means businesses must work to eliminate any organisational silos in their midst that may be creating data blindspots in their view of their customer.
One way to do this is to ensure that there are effective channels of communication between different parts of the business – for example, between marketing and customer service. If a customer is already disgruntled with the service they have previously received, they’re unlikely to take well to a hike in fares without seeing a change in value of the service provided. The impact of not doing this could cause anything from creating inefficient marketing communications, to causing serious reputational damage if left unaddressed.
However, if data from across the business indicated that, say a 15% rise of customers are especially conscious of their carbon footprint, communicating the change in price by emphasising the benefit of offset emissions might be helpful in minimising any loss in demand.
Making the most out of your data – from insight to action
There’s simply no such thing as too little data anymore – only too little intelligence. Airlines need to be fully equipped to turn their data into meaningful insights if they want to successfully navigate this next era of change and future-proof their business. A strong data management strategy is a pivotal first step – but like a plane, it cannot fly without being manned by a properly trained team.
Airlines need to make it a priority not just to invest in technology that can take the heavy lift out of stepping into the data-driven age, but also in equipping teams with the skills needed to glean meaning from it. Turning insight into action simply won’t work if you don’t have a team properly equipped with the right tools and training.
Whilst new EU regulation may take up to a decade to come into full force, there’s nothing stopping forward-thinking airline brands laying the groundwork now for their future success. Making decisions utilising their biggest asset – data – will ensure airlines keep their ear to the ground and able to best mitigate rising prices and declining demand, whilst their head is in the clouds.