March 2009


Dennis Schaal has written a  good article in Travel Weekly on Expedia and their PassportAds program that I referred to in this post. Expedia are working with BlueKai, and if there is one link you should definintely click on in this post, this is it. If you have previously visited Expedia or any of the other BlueKai partner sites, you may be surprised at the information that appears. If you work for an airline internet site and you use a white label (aka private label) website from any supplier (not just Expedia) then please re-read my original post and be sure you understand how data gathered on your current or prospective passengers is being used, and make yourself comfortable that it is being used in the best interests of your airline. I received an email yesterday from someone working in the hotel industry who told me he had heard of white label contracts excluding use of data in the way I am questioning, but it would be interesting to know if the BlueKai model would be excluded from such legal wording. Finally, I was just taking a look at the Financial Times whilst sitting in an airport lounge before jumping online to post this, when I saw this article saying

European authorities are to investigate consumer profiling by online advertisers amid allegations by senior EU officials that “basic rights in terms of transparency, control and risk” are being violated.

Personally I am a big supporter of almost all technology that allows increased marketing effectiveness, especially if it is using non personally identifiable data, but until today I’d never even heard of “deep-packet inspection” so I’ll have to reserve judgement on that particular technology.

Andrew Compart who works as a Senior Editor at Aviation Daily has put together a good collection of resources on AirAsiaX. Worth a look if your airline is planning to go full a la carte with your fares on long haul. Jay Sorensen from IdeaWorks (who incidentally is on the podium just before me at an upcoming conference) has written a long piece on the AirAsiaX model and he shows a good table of the fees passengers will up for and states that 55% of the passengers are pre-ordering a hot meal. And whilst on the topic of an easy way to compare a la carte fees by airline, this link at hotelscheap.org is excellent. Could save a junior analyst in an airline or a management consulting firm hours of surfing the terms and conditions on every individual airline website.

I mentioned them once before when writing about someone I sat next to on a flight who has previously flown with AirAsiaX, but time will tell if the financial belt tightening going on around the world right now is something that works in their favour, and whether the long haul pure LCC model will succeed in its current form.

Finally, I wasn´t sure where to put this, but I copied it a while ago from a comment I was reading on the consumerist website. It came from someone calling themselves Chris D

Check out these Allegiant fees I paid:
FEDERAL TAXES: $57.06
SEGMENT FEES: $14.40
PFC: $18.00
911 SECURITY: $10.00
SEAT SELECTION FEE: $44.00
CONVENIENCE FEE: $27.00
PREPAID BAGS: $30.00

Added $200. There was only one segment and you have to choose seats. WTF is a convenience fee? What is PFC?

Nothing like a bit of confusion to lure in the passengers; it doesn´t seem to be stopping people from flying with them.

As I write this I´m sitting in a business class lounge at Madrid airport waiting to board a flight to Latin America, frustrated at the fact that it is a Sunday, and my flight is currently showing as being delayed by around 3 hours. The two harsh lessons I learnt today are  

  1. My time must be worth little or nothing to the airline
  2. Google is not infallible

One of the limitations I have with this blog is that I have to be very careful about criticizing an airline as they are virtually all customers of my employer. A very small price to pay in the scheme of things. In this case (no names of course), the check-in staff knew as soon as I arrived at the airport (90 minutes prior to scheduled departure) that the flight was delayed at least two hours and offered me a lunch voucher for one of the airport cafeterias. What would have been 100 times more valuable to me (on a Sunday especially) would have been a phone call or even an email 30 minutes earlier telling me the flight was delayed, thereby enabling me to spend some quality time with my wife and daughter instead of sitting here writing this! Taking a look at the passenger detail fields on checkmytrip, I can clearly see that there are two email addresses and a mobile telephone number within my PNR, as well as a frequent flier number which obviously links to a profile with even more personal data. For anyone to suffer from a delay like this is unpleasant, but as a business class passenger with high frequent flier status, this sends a really bad message about how valued a profitable customer is by the airline. But every cloud has a silver lining, and as I will actually be visting the airline in question this coming week, I´ve now got a whole new topic to discuss and a potential new sale to be made.

The second lesson I learnt was about Google. This is a company for whom I have almost as much respect as they hold data on me, and that means a lot of respect. But this morning, before leaving for the airport I typed my flight number into the search panel and the first result was from Flight Stats showing that the flight was currently on time. So now that I know the flight is definitely delayed, I do the same search again from this PC in the airport lounge, but by now it is probably 2 hours since I did the search from home. Flight Stats via Google is still showing the plane of being on time. But when I click on the Flight Stats link, it tells me the flight is currently delayed by 190 minutes – just checked again and the delay is back to 120 minutes on Flight Stats, but Google is still showing it being on time. I did try and go to the airline´s own homepage to see what they were saying, but the homepage was down – that would have been very embarressing if it was hosted by Amadeus, but fortunately it is not the case. So going directly to Flight Stats is the lesson learnt, and unfortunately a lesson learnt the hard way.

I recently read about an interesting and innovative paid service called FLTAdvisor, but I think the real answer in all of this is airlines using technology to better communicate expected delays with their customers.

In November last year I put up a slide at an airline ancillary revenue conference showing a quote from Michael B. Adler, the CFO of Expedia. I was full of praise for their approach, but at the conference I said words to the effect of, every airline in Europe should be paying extra close attention to his last sentence. I have copied the quote below:

“The one area that we are going to be pretty focused on Expedia for 2009 is really on the attach rate…. We think there’s a big, big opportunity there…Targeted emails convert at much, much higher rates; five, 10, some of them 30 times the rates that call it non-targeted emails go out…”We saw you search for this flight. The price has changed. Do you want to buy?” That email converts at multiples of call it an email that’s not personalized 10 to 20 times non-personalized emails. We’re going to expand those programs into the European markets and hopefully we’ll see some good returns there.”
  

 Following on from this theme of Expedia innovation in marketing, I have been directed to a good interview by marketing publication Behavioral Insider with  Doug Miller, vice-president of global media solutions at Expedia. In the article he talks about the importance of tracking consumer behaviour leading up to a travel purchase and serving up the most relevant content and advertising across multiple sites to maximize sales success. But on top of just talking about it, he give a good insight into what Expedia is doing in this area, and it really does sound quite impressive. Part of the focus of my current work is using IT to improve the effectiveness of cross selling once the passenger has purchased their tickets on the airline website, and a large part of this is segmentingthe customer offer and paying special attention the the timing and presentation of the offer. So it is always interesting to read what others are doing prior to purchase; this must also have great significance to managers of online direct sales at airlines, especially outside of their home markets where brand recognition and frequent flier program enrollment are much lower.   

With all this impressive innovation happening at Expedia, I just wish they’d invest a bit more into their white label hotels offering. As one airline client of mine who is also a client of Expedia white label wrote to me recently

“Expedia is a bit of a “black box” so may be difficult to track an ‘email’ generated enquiry once the user enters the engine”  

I asked Expedia a few questions on behalf of the airline, but was stonewalled when I phrased the question in a way that asked how white label airline clients can audit their commissions. Maybe Expedia didn’t realize my job is to provide Amadeus IT solutions and that I’m not in the distribution side of the business, but it was a frustrating experience. It turns out that clients can embed some tracking code on the Expedia Hotels booking confirmation page, but I haven’t had a chance yet to properly investigate how much information is passed back to the airline and how flexible this code it to modify. Maybe there will end up being a way to track the passenger from post airline ticket purchase, to cross sell email, to email click through, and then to hotel purchase; ideally using record locator appended to white label site URL, and then with complete purchase information passed back from the white label site in real time – if there is, unfortunately Expedia wasn’t in a hurry to tell me or my airline client. 

The internet opens up massive scope for improved marketing efforts, and hopefully Expedia will permit their white label airline customers to benefit in a similar way to themselves. I would hate to think that one day they might use marketing data gained from white label websites branded with an airline logo to aggressively market airline tickets on Expedia.com to those same consumers. That is a thought that just came to me, and wasn’t the original intention when starting to write this post, but now it’s really got me thinking… it might be time for airline lawyers to pull out those white label contracts from all suppliers and re-read the terms and conditions, or at least keep it in mind for the next time the contract is up for renegotiation.

Onboard sales is not an area my work ever sees me get involved in (except as an airline passenger!), but some readers of this blog do work in this field , and this makes me want to keep one eye on these developments in so far as they pertain to ancillary revenue. So it was with some interest that I read about a company I had not previously heard of called Onboard Retail Solutions. They recently signed with Spainair and already have Air Europa as a customer. I guess they are similar to GuestLogix whom I’ve written about before, but their website was a little vague so I can’t really be clear what the compelling argument is for airlines – but there must be something if they have some good customers already. If anyone from Onboard Retail Solutions wants to get in touch I’d be interested to makes things a bit clearer to save readers having to navigate their website.

Which leads me to the headline of this post. Did you know that such an award existed as the Inflight Sales Person of the Year? I certainly didn’t. And the winner of this award was one Anthony Fung of Dragonair. I suppose a belated congratulation is in order for Anthony – well done.

A few days ago I posted what one person told me they perceived as a slightly negative post regarding Continental. I didn’t see it that way, and I never retract what I’ve written unless it is factually wrong, but for today at least, I’m changing my tone regarding this airline.

Example number 1:

“I might have said some of the same things five years ago on what we are trying to get done. We’re still getting the hang of better email marketing,” said Mark Bergsrud, senior vice president of marketing programs at Continental Airlines Inc., considered an industry leader in mining customer data.

Honesty counts for a lot, and the quote above deserves respect. A lot of people in working marketing claim to know it all, but even something as basic as email marketing has massive room for improvement from every airline I have seen to date. Whether they would admit it is another thing.

Example Number 2:

“The ability to immediately make your Web site relevant to your online customer is a fundamental tenet of marketing in today’s Internet culture. With the geolocation data from Quova we’ve been able to shorten our sales cycle by matching an IP address location with the correct country homepage, which funnels people directly to the information they want and need,” said Ken Penny, managing director of Internet planning and development at Continental Airlines. “Quova’s geolocation data has all of the attributes we were looking for in a geolocation partner. Fast, accurate, reliable and granular, Quova’s solution has already helped us significantly improve the customer experience for our international customer base and we’re only scratching the surface of what’s possible.”

One of the immediate benefits of integrating geolocation data into the Web site was eliminating the need for many customers to self-identify a country. Prior to working with Quova, every visitor to continental.com, regardless of physical location, landed on the Web site’s homepage. This forced many customers to self-identify their country and language, which slowed down the buying process and added steps to the sales cycle. Geolocation streamlined this process. In addition, Continental is localizing the marketing banners and placements on its Web site based on country-level geolocation, and in the near future will begin to target its marketing placements at the metro level. These changes have helped Continental improve the click-through rates of its homepage marketing banners by as much as 200%.

I know it’s a press release and I defininitely take the “by as much as 200%” line with a grain of salt, but it’s good to see that whilst in the 10-k Continental were complaining about internet being low yield, at least they are doing some good stuff using geolocation. I don’t really mind hitting a landing page (so long as it uses cookies to ensure I only do it once), but it does look much smoother if these fields are preselected and you are jumped to your own country specific home page for the airline. From reading above, using this data to serve custom banners clearly seems to be paying dividends for them. Maybe this localisation effort is a small part of the reason why ticket revenue on Continental.com was up 11% in 2008 when passenger numbers across the entire airline were down 3.2%.

Example Number 3:

I came across a blog from an Amanda Vega who runs a marketing consultancy. Her recent post against Southwest is most relevant here,  but her post comparing Continental with US Airways has one good quote:

“Fly Continental whenever you can. They seem to be doing a LOT right – especially in first class. It’s NOT all the same. Be discriminative…especially with luxury items.”

I add her comment because it comes from someone outside of the airline industry and her more recent blog post on Southwest highlights the importance of communicating properly with passengers. Previously I have written on the range of communication options offered by KLM on their “manage my booking” page. The scathing text about Southwest on Amanda’s blog is worth a read in full:

“If my Continental flight is running late, which is rare (sorry – don’t ever believe any of those “on time” records you see of flights because they are bogus) I get an alert. I get notified consistently by phone, text, and email. I would have, for example, known today before I even left the house if my plane were already two hours behind. (Southwest knew my plane was late out of Houston according to the gate agent since prior to me calling the airline to check – because their online updates are always inaccurate, and the flights to Vegas are always late.) Knowing that I could have optimized a good 2 hours of work – PAID billable hours. Not being informed is unacceptable. There is technology out there, and it’s not expensive.” 

No arguments from me on that last line at all. I’m in discussions with one major airline at the moment about improving the way they communicate disrupted flights close to departure – I’m told the process is very manual at the moment and what made it even more urgent recently was that a top tier frequent flier was so annoyed about not being informed of a major delay that he contacted senior management. They pushed it down to middle management with the directive that what was already a high priority project, now be made even more high priority. Apparently the problem was traced back to a change in shifts and the new worker not knowing where the previous worker had stopped using his highlighter on a large ream of paper showing passengers affected by disrupts!

Do the people working at companies that commission market research ever get back results from a customer survey they have conducted and realize that the percentage in favour or the percentage of respondents expressing a certain option is not really giving any insight except into the weakness of the original question asked? 

“The research reveals a clear connection between self-service and passenger preference, with 82 percent of respondents indicating they are more likely to choose a travel company that allows them to interact easily via kiosk, online and mobile self-service channels. “

82% of people will consider choosing a travel provider based upon the self service options offered. This finding is nothing short of complete and utter garbage. With few exceptions, it is much better to look at what people do, not what they say they will do. So much market research these days is just an excuse to put out a press release, but this one from NCR takes the cake, at least for this week.

Next Page »