A few months ago, I had the opportunity to attend a travel industry gathering. One of the guest speakers – Andreas Nau, Expedia’s Managing Director for Central Europe, talked about the necessity for online travel agencies (OTA) to scrutinize the sustainability of their business model today, in order to secure the longevity of their future relevance. Faced with a very noisy and homogenous market, Nau believes the three critical components needed for OTA’s to remain differentiated lies with having the right management team, the right culture to adapt quickly, and the right technology to support product innovation. As a Marketer and travel industry aficionado, I’d add a fourth to that: achieving customer intimacy through systematic CRM practices.
The travel industry has gone through a remarkable transformation over the last two decades, as we’ve witnessed the entire go-to-market model shift from back-end GDS systems, to online self-service booking engines. Alongside managing the traditional supply chain, technological dexterity has become an essential core business function, at a time when almost 40% of all global travel bookings are being conducted over the web. The magnitude of online transactions has created an unprecedented volume of data, and the statistics from Expedia are staggering. In 2014 alone, Expedia users conducted in excess of 5 billion air travel searches, while the Company sold enough flights to fill 88,000 747 aircrafts. They currently employ over 700 data analysts to make sense of the avalanche of consumer data being generated from their website – data which would populate 6.2 billion 200-page notebooks.
With such an excess of customer data points, you’d be forgiven for thinking OTA’s are the poster child for insight-driven marketing practices. While there are some very slick operators leveraging all sorts of conversion techniques that range from welcoming you to their site with a display of your last booking search history, follow-up emails containing time-sensitive promotions to aid conversion, and geo-location specific mobile alerts to name a few, the vast majority of OTA’s underutilize even the most basic of digital recognition techniques. What’s considerably worse is when the provider fails to personalize the user experience, even when users are logged in to an account connected to travel interest and preferences. There’s a reason why 74% of online consumers admit they become frustrated when content appears that has no relevance to them. Underestimating what sits at the core of consumer behavior is a perilous state to be in for any online business, as it’s counter intuitive to offering relevance amidst fleeting consumer trends and disruptive challenger brands.
Online travel buyers expect recognition for their custom, because their choice of patronage is driven by the logic that a website often frequented, will inherently be able to offer more personalized travel choices. Thanks to the likes of the Optimizely, Google Analytics and Mixpanels of the world, maintaining a deep and intimate understanding of buyer behaviors, purchase preferences and consumption patterns is no longer a huge ask in itself. More importantly, doing so gives OTA’s the ability to target online buyers with timely interactions as part of an ongoing marketing dialogue that’s sophisticated in its approach to conversion optimization. The knowledge of what’s important and interesting to a user, teamed with adeptness at applying the right selection, sequence, timing and packaging of travel products is what aids conversion, and goes a long way towards establishing customer loyalty.
This is where the art of ‘show me, you know me’ becomes invaluable. As supported by the statistics from Expedia, the travel industry has access to an inordinate amount of user intelligence collected from digital interactions. Consumers trust us with their personal preferences, we track their every move and in return, they reveal all kinds of behavioral insights that must be put to effective use. Online travel buyers are no longer just driven by price and value deals. They want recognition and context to make the experience of a travel purchase more relevant, timely and customized. Customer relationship management is foundational to building an effective engagement strategy for any OTA, and adopting CRM practices as a means to getting closer to the customer will undoubtedly result in achieving better conversion from existing and future business.