Back in January this year I made 5 predictions that I thought would be key travel industry trends applicable to airlines seeking profitable innovation in 2009. The time for self assessment has come. Were any of them on the money, or was I living in a land of self-delusion eleven and a half months ago?
I’ve rated the accuracy of each prediction in percentage terms – 100% means I was a visionary (at least in my own mind), whilst 0% means I was had no idea what I was talking about. Here we go.
1. Nudge is the new Push (Prediction Accuracy 50%)
Here I was basically saying that marketing to customers will get even more sophisticated, more segmented, and less obtrusive. What I wrote on BlueKai back in April was one example of this trend (albeit with some privacy concerns), and retail data specialists dunnhumby fitted this trend as well, but in June when writing on passenger fare alerts it was becoming clearer to me that this prediction probably wasn’t going to score 100% when it came time to write this review. Maybe if more airlines were following the ancillary revenue model of Air Pacific, I might have scored better on this one.
For more on this trend, especially how it ties into social, go to the 10 minute mark of the interesting video below from Rich Wong at Accel Partners. He claims we are only 5% of the way to understanding how social will impact marketing. Some of his relevant quotes are: “Social is the new SEO” and “The new emerging space (in marketing) is the use of these social techniques” and “any marketer… that doesn’t understand how to use social is going to miss out.” Maybe social will become the ultimate embodiment of Nudge Marketing, but we are clearly a long way from that today.
I liked a lot of what he was saying, as we now have so much data that enables us to market better to customers, but how many of us are actually using it in an intelligent way?
2. Defriending (Prediction Accuracy 10%)
From a recent WSJ article:
Just as Facebook turned friends into a commodity, it has likewise gathered our personal data – our updates, our baby photos, our endless chirping birthday notes— and readied it to be bundled and sold.
But I will also remove the vestiges of my private life from Facebook and make sure I never post anything that I wouldn’t want my parents, employer, next-door neighbor or future employer to see. You’d be smart to do the same.
I really thought more people would react the same way when I predicted a mini backlash against what one might call social networking just for the sake of it. To me personally a social network only makes sense when it adds value to my life. Linked in is really only useful in that it is a way to keep email addresses up to date for people who I might only want to contact once in a blue moon (actually the Tripit plug in is also a plus) - ask youself, what value do you really get from the site? Massive potential, but I could have said exactly the same of Linked in back in 2005 when I first signed up. This year I’ve even been turning down some connection requests, and reducing the amount of personal information available. So whilst there hasn’t been a big move towards defriending, I am sensing from the behaviour of those around me that many are becoming more discerning in their use of social networking.
Twelve months ago a number of airlines (well, almost any company in any industry really) had the “build it and they will come” mentality with social networks – so they did built it, but the users didn’t come as expected, and those that did rarely came back. Defriending may not have panned out the way I expected, but people working in social applications now are taking a very different approach to how they grow the network, especially when you look at the rise of OpenID and Facebook Connect combined with the novelty having worn off social networking just for the sake if it. Maybe I need to think of a new term, as defriending doesn’t properly capture what is happening in this market.
3. Location, Location, Location (Prediction Accuracy 100%)
This was my best prediction of the lot! Back in February I was writing about Latitude, and then a few weeks ago I saw a Morgan Stanley report claiming mobile internet will be twice the size of desktop internet. But this prediction was not just about mobile travel apps, it was specifically about using a person’s current location to sell to them more effectively, such as the potential BA or Sojern have if they do it right (some lower tech examples of location marketing). The best example of location, location, location I have seen in travel is from Lastminute. I was recently alerted by Eye for Travel to the Topsee iPhone app. They wrote:
You just shake the iPhone and 9 pictures appear floating on the screen as well as their distances from you. The pictures are of food, coffee, sweets, some are statues, bars, signs, works of art, dancing, caves or beds or just about any of the wonderful things you can find in London, or any cosmopolitan city. When you select a pic it gives you a better explanation of the attraction and access to its address, phone number and a street map showing where you are and where you have to go. If you don’t like the selections shake it again and 9 more images float up to you. It’s a great mixture of good looking intuitive design, interesting copy and map content.
Outside of travel you have really innovative companies like Foursquare, but for travel, take a look below at this lastminute demo of their app.
Then go back to the first video of Rich Wong, specifically the 13.30 mark where he says, “I think that mobile location space is a pretty interesting space; it’s a space that many of us continue to look at.” His firm funded AdMob that was sold to Google, so he definintely has credibility on mobile.
Without even thinking about this too hard I can visualize something I’d love to try with an airline that involves using location, location, location and building a simple yet compelling app with real revenue generating potential aimed at business travellers. My location prediction above might score full marks, but unfortunately I am not seeing airlines really take advantage of what is possible. There are too many me-too apps from the majors, but the real innovation is being left to start-ups. It almost brings tears to the eyes of someone like me who is such a strong believer that innovation and intrapreneurship really can exist within large companies.
4. One efficient airline direct channel back office (Prediction Accuracy 25%)
I’ve been working with airlines such as Qantas, Mexicana, Aegean, V Australia, El Al, Cathay Pacific, Avianca and others during the past year on different initiatives aimed in part at making their direct channel back offices more efficient. Despite achieving some really good successes at a number of airlines, I have to be honest and say that I am not sensing a groundswell of opinion developing within the wider airline commuity to aggressively go after these costs in a structured manner that will yield long term benefits. There are some very interesting initatives in the pipeline with various existing and prospective customers that I can’t disclose here at this point, but even these are not widespread enough to warrant a score above 25%.
One thing I’d love to do is host a conference and get airlines to share ideas, problems and success stories in this area, but unfortunately at the moment it is not something currently in my plans for 2010. Noboby would deny that it is hardly the sexiest of topics, but in a market over-crowded with conferences on ancillary revenue and mobile, a conference on back office automation (maybe even tied in with fulfillment of ancillary services and electronic miscellaneous documents) would be something guaranteed to show a very positive ROI for airline industry participants.
5. Web 2.0 Killer App (Big Fat Zero Percent)
When I wrote my 2009 predictions I knew that this prediction was a long shot. At the time I said it only had a 20% chance of coming true. But something inside of me was really hoping I would be able to write about a massive success story at the end of the year. Alas, it wasn’t meant to be. I wrote about valiant attempts from Air France KLM, Amercian, and The Virgin Group to claim the crown on this and by June I was practically begging any airline to do it properly. Many of the ideas I had for this category a year ago are still waiting for an innovative airline to grab hold of – things like maximising use of existing PNR and loyalty data, targetting travellers on competitor flights with a compelling social offer tied to your own flight operations, linking the pre flight experience to the in flight experience via social marketing to generate incremental sales, and so many more. As of writing, the throne sits conspicuously empty, or at least no-one in the airline industry can claim to occupy it. Maybe the championship title will be awarded in 2010, or then again, maybe not.