Customer as a data packet

Customer as a data packet

To gain greater insight into changes and innovations that could usher in
a new era for travellers, the Economist Intelligence Unit (EIU) conducted
parallel surveys of 100 airline executives and 810 air-travel customers in
August and September of 2013. Augmented by interviews with 16 industry
leaders and in-depth analysis, research into this topic culminated with the
whitepaper, The Future of Air Travel: Improved Personalisation and Profits
through the Integrated Use of Customer Data. This is one of a series of five
articles elaborating on some of the most salient points that emerged from
the findings.


Airlines are not so very different from the logistics industry — both must be able to coordinate the location and
movement of equipment, staff and resources with tremendous precision. The logistics industry accomplishes its
mission by treating all of these elements as “data packets.”
Based on the research, carriers whose aim is to be something other than the lowest bidder will need to do much the
same to optimise and customise the travel experience for
their customers. Viewing travellers as data packets is not as
cold as it may first seem; such perspective would actually
allow airlines to minimise inefficiencies and maximise personalisation. This makes for happier customers who arrive
at their destinations on time — much as packages do today.

Better and more sophisticated use of information — across
the full trip, from the moment travellers begin researching flights to their post-trip feedback — can help airlines
achieve greater efficiencies and deliver a more personalised
experience. How data are collected, used and transmitted
can even bring to business class and coach some of the
features of first class. Making sure that they have the most
complete data packet possible is the first step for airlines if
they want to deliver a seamless yet balanced interaction,

that is, trips that are coolly efficient, but warmly personal.
Getting it right, making it personal
The information airlines now offer and collect is relatively
sparse, as are the corresponding options available to personalise flights: first class or coach; window, aisle or centre
seat; vegetarian, kosher or halal food. Better information
exchange and analysis, a more unified and complete data
packet, can open up more options — much as it does for
the hospitality industry — from comfort levels to entertainment possibilities to pre- and post-flight activities.

When it comes to handling data, airlines can also learn a
great deal from other industries. Analysing the information
that consumers continually generate allows hotels, casinos, supermarkets and global companies such as Netflix
and Amazon to personalise the customer experience with
greater precision. And, thanks to mobile phones, GPS and
locational tracking of Internet use, among other technologies, customers become datapoints, transiting virtual networks in parallel with their physical movements. As tracking
and data analytics become ever-more precise and granular,
some systems are even able to vary offers made to supermarket customers, for example, based on personal profiling
and the specific aisle where the shopper is located.

For example, business travellers, vacationing families and
“adventure” travellers value different services. Providing
more opportunities at the booking stage for customers to
self-identify — or using predictive analytics to extrapolate

2

CUSTOMER AS A DATA PACKET


their category and needs with greater precision — would

allow airlines to offer more relevant personalisation options.
Airline loyalty programmes that have more comprehensive
customer profiles — the product of data gathered across
multiple flights — should also be able to read trip purpose
and context and respond accordingly. Dr Wong might be
offered business-bundle options when travelling alone but
family-bundle options when travelling with spouse and
child, for example.

For an airline, stranded passengers can be thought of as
data packets to be re-routed through the air-travel network. Such real-time mapping would extend the reach of
the airline to cover more of the trip, so that an airline that
compiled particularly rich passenger data packets could
offer more personalised care far beyond the flight. When
airport traffic threatens to make a business traveller miss
a flight, for instance, she might prefer the time savings of
a van to the comfort of a limousine. A family with a young
child, forced to change reservations at the last minute,
might value a hotel with child-friendly facilities over one
with in-house business services like meeting rooms and
computer and printer access.

“In the next 10 years, technology, and information technology in particular, will be what matters most” in improving
industry service and efficiency, says Henry Harteveldt, a
travel industry analyst and the founder of Atmosphere
Research Group, a boutique research and advisory firm
focused on the global travel industry. The amount of investment necessary to reap the benefits of this technology
is relatively insubstantial, he argues. “The average airline
spends about 2% of its revenues on technology, compared
to about 30% each on fuel and staffing,” he says. “Even

increasing investment in technology to around 5% of revenues could have enormous benefits.”

The fragmented data packet
As in other sectors, fragmented information remains a
challenge. Fragmentation can be seen across the travel
industry, even though the mutual interests of the transport,
lodging, dining and entertainment sectors are served by
sharing data to create the most accurate and comprehensive data packet possible. Such sharing would make for
greater efficiency and reduce duplication and its costs. A
data packet so rich in detail would be useful both to providers and to travellers.

Data packets move and change
The more information an airline has about the full trip —
beyond the flight segment — the more it can do to personalise and tailor the flight segment to mesh smoothly
with the other parts. A full-itinerary data map facilitates this
when everything works properly. Real-time data mapping
— following the data packet the way logistics companies
follow packages — is of even greater value when a trip
doesn’t go as planned.

“Customer demand really argues for interoperability,” says
Valyn Perini, senior vice president at Kalibri Labs, which
conducts revenue-performance analysis in the hospitality
industry, and previously chief executive officer of the Open
Travel Alliance, which works towards information distribution standards. With technology getting so much less
expensive and more software developers devising better
solutions, “the reasons not to support interoperability are
becoming less and less compelling”, she adds. Still, she concedes, the fear of working with your competitor is real.

3

CUSTOMER AS A DATA PACKET


Internal conflicts

We have the technology

In-house customer data can be siloed in different systems
that not only do not share information, but can present
compatibility problems. Software development that advances interoperability will play a great role in minimising
this, as well, notes Ms Perini.

Viewing the customer as a data packet, whether explicitly
labelled as such or not, has been the practice in a number
of industries for some time now. As the cost of information
gathering, storage and analysis continues to fall, airlines can
genuinely begin to play catch-up, Mr Harteveldt says.

The split between marketing and customer service, however, is another way in which the conflict between siloed
divisions within a company can come into play. Reading a
data packet fine-tuned for marketing purposes, for example, might logically lead to providing fewer incentives to the
most loyal customers. Since they’ve already demonstrated
their commitment to the brand, given limited resources,
every dollar spent on incentives for loyal customers is a dollar not available to woo new customers or to forge a closer
connection with less-loyal customers.

Reservation information, loyalty programmes and connections to other travel providers give airlines a solid base on
which to build a richer and more comprehensive customer
data packet. As with other companies, they can also purchase access to additional databases. Acquiring the technology and the mindset to harmonise information across

the full range of sources will allow airlines to create a richer,
more accurate and holistic view of their passengers. This is
positive for both airlines and their customers.

While that sort of conclusion is a logical one, it is based
on an incomplete understanding of the passenger as data
packet — as if one were to separate out a single line of
computer code in a program that runs a full page. The
virtue of assembling a more fleshed-out, balanced data
packet is the resulting “full-page view,” allowing the airline
to understand and design solutions that will benefit all its
passengers as well as its own bottom line.

4

CUSTOMER AS A DATA PACKET


Worldwide Headquarters
Sabre Airline Solutions
3150 Sabre Drive
Southlake, Texas 76092 USA
Please contact our nearest
regional office for more information:
Europe, Middle East, Africa
Tel: +44 208 538 8539
Email:

The Americas
Tel: +1 682 605 6750

Email:

Asia Pacific
Tel: +65 6215 9500
Email: