Travel CMOs get personal with data analytics
CMOs of travel firms take note: Data analytics is reshaping your industry. And according to SapientRazorfish’s recent report Asia’s Evolving Online Travel Market, 2017 will be the year when data analytics will shine.
The report, which sampled 100 of Asia’s travel industry decision makers, saw 80% pointing to data analytics as a major focus this year. If you are not on the data bandwagon, it is high time you did.
Competition and Change
Why? The main reason is competition. The ability to digitize and collate data for insights has allowed new online entrants to fight for the same market share.
“OTAs (online travel agents) have had a huge impact on the travel industry, they’ve changed travel habits and expectations. To compete, traditional travel businesses, like hotels and airlines, must evolve and offer a wider utility to meet the needs of travelers, and ultimately make a sale,” said Seton Vermaak, the head of strategy at SapientRazorfish.
Also, traveler behaviors are changing. Today, many are more likely to book for trips and share insights over a single platform. And this has turned the travel industry upside down—literally.
“Tourism bodies, previously expert sources of inspiration, are now becoming transactional. On the other end of the spectrum we're seeing airlines and hotels, previously transactional, providing more travel inspiration in the hope of maintaining their share wallet,” Vermaak said.
Increasing lifetime value
One area where data analytics is helping travel brand CMOs is personalization. “The smart use of data allows travel brands to deliver the personalized experiences today’s travelers are expecting,” Vermaak said.
“Our report … shows real-time analytics of online behavior has leapfrogged traditional areas of focus such as past purchase behavior, and this is one notable example of the ways in which the APAC travel industry is maturing,” he added.
Through personalization, Vermaak sees a strong link between data analytics and increasing traveler lifetime value. With personalized experience, travel brands can extend and improve this important measure by maintaining customer interest, strengthening their relationships and increasing brand value.
“Without having a grasp on the fiscal value of a lifetime customer, it’s extremely difficult to have a conversation about acquisition and loyalty. Each brand has a unique definition of loyalty, but marketers must know how much that loyalty is worth,” Vermaak said.
Turning data into insights
Acquiring data is not a problem for travel CMOs. In fact, many travel companies are awash with it. In fact, Vermaak noted that the volume and diversity of data allow brands to move beyond "historical constraints and antiquated segmentation models and instead move to models that react to behaviors in the moment."
The winners will be those who can turn their vast treasure troves of data into useful insights. “Some brands have a lot of data, but they don't have the capacity to turn it into useful insights. Brands who can use smart, nimble data are winning and retaining customers,” he noted.
Vermaak noted that it is one of the reasons why SapientRazorfish partnered with DigitasLBi for travel, hospitality, and loyalty brand projects.
DigitasLBi uses various individual data points to develop models that show when a member “has a predisposition to perform an action." It allows travel brand companies to proactively engage their customers on incentives and rewards.
“These models have helped clients in the hotel sector understand when a guest would be most likely to redeem their points on a spa treatment or identify how we can surprise them with dining rewards that fit with their tastes and preferences. Personalized, relevant offers like these ensure a guest remembers their stay and returns time and again,” Vermaak said.
Such capabilities are now impacting the entire travel business. “Discovering a customers’ travel and shopping preferences, and personalizing services for individual customers is now a real-time activity that affects the entire business from supply chain through to customer payment methods,” Vermaak added.
It is the reason why 85% of those surveyed stated that they are looking to improve customer loyalty through data analytics.
Vermaak also noted that CMOs play a major role in using data analytics to realign the travel business to become more customer-centric.
“In order to service a single view of the customer, the internal silos of a business must be brought down. It’s simply not possible to provide this single view on the outside when departments are silo-ed from the inside,” he said.
Two future data-driven trends
Thanks to the increasing adoption of data analytics, the travel industry is evolving even faster. Vermaak noted two new trends that his firm is focusing on.
The first is what he called “Loyalty 3.0.” “[It is an] emotional experienced based loyalty that allows you to choose how you want to engage with a brand on your mood and mode.”
Another concept is “data as concierge” where brands become modern concierges, trading information customers share for premium experiences “that allow customers to level-up.”
“It’s very challenging and exciting times for the travel industry,” he added.