May 2010

Tnooz have published the final instalment in my lengthy essay on supplier direct websites moving into the travel inspiration space.

Part 5 of 5 also has links to the first 4 parts of this series.

Otherwise, click on my profile to see links to everything I have written for Tnooz,including this most recent five part series.

The article included a diagram containing a new concept I developed in order to better understand the inspiration landscape. You’ll need to go to Tnooz to read the actual article, but here is the diagram.

I also updated the Bow Tie Diagram to cover inspiration. The point of this illustration is to show that some sites further to the left of the knot are better at inspiration (or lead to inspiration sites) as they attract more uncommitted visitors, whereas the sites closer to the centre of the Bow Tie are more transactional as they attract people who know what they want, when they want it, and are ready to buy:

And I also included a very slightly modified version of the May 2009 model that appeared originally on this site:

I’ve included the diagrams here just to let people know that I am happy with anyone using them if you think they can help you make better sense of the changes happening in travel search.

I previously mentioned the decision to break this series up into five posts over consecutive days, and in hindsight it was the right thing to do given its length. But there was one drawback I didn’t realize at the time. Having a post on multiple pages means you lose the conversation with your readers, as most don’t know where is the best place to leave a comment, and those that do leave a comment, do so on different pages. So there are fewer comments than I would typically get on that site, and spread over mulitple pages so there is no real potential to build further engagement with the audience. This last point is one of the real strangths of social media – sometimes reading the comments is more insightful and more interesting that the actual post itself.  

One last point to reiterate from before, if you like any of these diagrams or any of the concepts I discussed in the inspiraton essay on Tnooz, then feel free to use it as a basis for commissioning your own whitepaper or your own customer study. There is a real need in this industry to understand travel inspiration better. Remember that this blog and anything else I write is just a small sideline to my main job, so hopefully I am just giving the process a gentle kick-along. I would love to see someone with the right resources write the definitive report, as I’m sure there would be a ready market for it.


Tomislav Tepes is a person I’ve known for almost five years, but we would be lucky to speak to each other once a year, usually when I see him at a conference. He has a reputation for being someone willing to lead from the front and try new things online, so I decided to ask him to do an interview with the Shearwater Blog – fortunately he said yes. Read below to see some of his good in-depth answers regarding Croatia Airlines and some of the interesting things they are doing online.

Martin: Tomislav, I’m looking forward to seeing you again next week, but instead of talking about the conference [#1AeCom2010] could we commence with a brief background on Croatia Airlines in general, and your role there. In addition, could you please give an overview of some of the key functionalities you have launched on the website in the past 12 months, and where you see the focus for the immediate future.

Tomislav Tepes of Croatia Airlines

Tomislav: I’m currently employed as an Airline Information Manager within Croatia Airlines IT Department. I joined Croatia Airlines in 2000. In 2008 I acquired a degree from Faculty of Transport and Traffic Sciences (M.Sc.), University of Zagreb. For the past 6 years I have also been eCommerce project manager, in charge of planning and implementing online and mobile company strategy and initiatives.

In the last 12 months we had around 20 implementations of new on-line and mobile services. We build mobile service infrastructure that allows us to develop new services for our passengers. New infrastructure gives us ability to send SMS/MMS messages to our customers worldwide. We developed Schedule Change SMS notification. We are sending PNRInfo messages to users who booked via our contact center. Users no longer need to write reservation details on a piece of paper. Now they simply receive SMS with reservation code, price, reservation time limit and ATM code.

Passengers can also send free SMS messages from our web site. During the internet booking process – FlyOnLine, passengers can agree to receive our SMS promotional messages. If they agree, we award them with some free SMS messages that they can send from our web page. And of course our Marketing department loves new possibility of sending promotional bulk SMS.

We redesigned our mobile site and added some new services like flight status, sending e-mails or ATM locations in Croatia where you can pay for your reservation.

On the web site, we introduced Flight Planner using Amadeus Affinity Shopper. It is a new search engine that targets leisure travelers by allowing them new and innovative way to search for flights. Now, we offer our customers the ability to explore our network by searching not by dates but by their preferences and possible budget – and we display this to them in an interactive route map rather than a calendar display.

We were active also in Social media. We started a Facebook Croatia Airlines page.

The latest new service on our web site is the possibility to chat with FlyOnLine staff. Now if the passenger has a question or problem, they can easily ask the question via chat service and receive on-line instant help. No more mails or telephone calls. Just click on chat icon and ask for help or clarification.

In 2005 when we started our e-commerce project we created the Croatia Airlines eVision:

Build a service that would be simple and adjusted to passengers’ needs.

Now, for 6 years we have been building our e-commerce Internet and mobile services around it and we will continue to do so. We have firm directions of our development and point of interests:

  • Contact center services over the telephone
  • FlyOnLine service over the Internet
  • mobile services
  • Distribution of our services via distribution channels of our non airline partners
  • New payment methods
  • Ancillary services

Martin: Great summary Tomislav, so many topics I could explore further, but a few in particular I’d like to focus on. Firstly, it sounds like you have a good view of the importance of working closely with the contact centre on joint cost saving and servicing initiatives. Where have the biggest benefits come from in this area, and is there anything that maybe in hindsight you would have done differently? Further to that, are the social initatives you mention driven more by cost saving objectives via new forms of disseminating information to customers, or driven by the marketing benefits you see? What is your view on social as a scalable servicing model?

Tomislav: I think that all initiatives on all distribution channels, especially direct ones, are more than welcome. If you don’t adjust and evolve your service you can’t succeed. As society grows so should your service. In my opinion an airline should have answers and strategy regarding direct distribution channel and passengers:

  • How to attract passenger?
  • How to keep and steer passengers needs and behavior?

The answer to first this question is a simple one. Offer them what they want. If they want to use on-line services offer them on-line services. If they want to create reservations over the telephone, provide them service over the telephone. I see it with our customers that if they are satisfied with the channel and with level of service they are using, they will continue to use it. In our eStrategy we created SPS business model. Secure+Profitable+Simple. Secure isn’t all about ICT security. Of course you will use all security procedures, protocols and parameters but secure is also about securing your business processes. You must assure your passenger that your business processes are correct, in place, and that they will get service that was paid for. OK, first goal is now accomplished. Now, you have satisfied customer and you can start to guide them to go on a different channel. Example: Passenger is always creating reservation over the telephone but paying for it at your office downtown. Simply offer them payment possibilities over the telephone. Not one but whole bunch. They can pay via credit card, pay via invoice, pay via ATM, installment payment. People like to have choice. Once paid some other way but directly in your ATO/CTO, and if the journey went well, because you have secure business process, they will stick with it. Now once they start paying over the telephone offer them to go on-line.

You need to explain to them that it is a similar booking process, same IT systems, and same secure business process behind it. If they feel insecure they will have all the help they need. They can phone on-line office or they can send mail that will be quickly replied or they can chat with staff. Once again you must offer them a choice and they will use the one that they want. Once they start using on-line services, a small number will go back to your contact center or office.

This is one of the main reasons why you should have initiatives in the contact center. I think this is one of the main steps if you want to steer your customers on-line.

Your question was about social media as a scalable servicing model? Social media marketing should not be the only tactic companies use, but it should be integrated in an overall marketing strategy. Social media and social initiatives are great and an economical way to start buzz word about your service. I don’t think that companies should start using social channels as a scalable servicing model, so they can answer customer’s posts, engage customer in discussions and try to change customer opinion. The company goal should be creating buzz about company, services that the company provides and gathering information about customer opinion and expectations regarding company’s future services. By applying correct knowledge management tools and other information analytical models on the gathered information, a company can greatly benefit from it. In my opinion this goal is easier to set then to achieve.

Martin: It looks like some of your thinking on social is along similar lines to my own opinion, but I’d say the jury is still out on what will work best when the dust settles as other airlines are using it for servicing and seem pretty happy with the results so far. Final question to wrap up the interview. In your first response you mentioned “Distribution of our services via distribution channels of our non airline partner. ” I was wondering if that was any reference to the digital TV initative I have heard about, and if not, then please tell me a bit more about what you are doing in this area and the impact or results you are seeing.

Tomislav: This initiative “Distribution of our services via distribution channels of our non airline partner” is relatively new one –  about 2 years ago. After we implemented electronic ticket, we realized that entire business process became virtual. We didn’t have any part of a process that required physical interaction, only what we had is electronic information about requested service.

As I’m working in the IT Department this was an exciting discovery for me because a whole new world of possibilities were in front of me. The limit was only our imagination.

Once we started analyzing this new environment we come up with the concept of using banks ATM network for distribution of our services. We contacted the bank with the largest ATM network in Croatia and we proposed the project: Payment and issuing of Croatia Airlines electronic tickets. It was the same bank that was our PSP for and contact center so we already had a good and long relationship with them.

The project was great because it could be implemented with minimal costs because our bank already had an ATM network in place, we had automatic process of payment and issuing of electronic tickets and we both could offer a new service for our customers in what was for them an already familiar and safe environment.

Plus, the new service was incorporated as an additional benefit for the passengers who don’t have a credit card or don’t want to pay over the telephone because they’re afraid that it isn’t safe. Also over the telephone you can’t charge debit cards and via ATM you can. This was a triple win project, win for bank, win for our company and win for our passengers who love this new service.

Once we reached agreement with the bank the implementation was over and service was up and running in less than 2 months. The new service was introduced to the public on 15th October 2008.

As this first project was a success, we had the green light from our e-commerce project board to continue with further explorations of this initiative and it was officially included in e-commerce project.

Our newest project is integration of our services on the largest IPTV platform in Croatia. The project is currently in final phase. This is all that I can say for now but I would be glad to send you some more details and video clips for your blog when we agree a launch date – I hope in a few weeks. Maybe it would be great topic for some future blog?

Martin: The readers here are always interested to hear of initatives other airlines are undertaking in their direct sales channel, so definitely let me know when you are ready to share more on what you are doing with IPTV. I appreciate the detail you’ve gone into in this interview, and no doubt others reading this will feel the same way. Listening to everything you are doing would challenge anyone who thinks innovation is only the domain of the major airline websites. Thanks again for your time, and I’ll see you in Cannes at the Amadeus Airline e-Commerce Conference on June 2nd.

Tnooz have published the first part of my article on supplier direct websites moving into the travel inspiration space – I’ve tried to broaden the appeal beyond just airline direct given the much wider audience of that site.

Click below to read Part 1 in this 5 part series:

Five challenges on the journey to mastering travel inspiration

Kevin May, the editor at Tnooz, asked if I was OK to split the article into 5 pieces and run it over the coming days. Given that it is well over 5 times the length of most articles on that site it seemed like a good idea. I’ve had a few people tell me how they started reading my articles on mobile only to be shocked at how little progress had been made by the scoll bar on the side of the screen. 

The Tnooz article includes an old diagram, a modified diagram, and a completely new diagram. With today’s piece you get the Bow Tie Model that any regular of this site should know as well as me by now! But I’ll be really interested to get some feedback on the totally new concept that I am calling the Inspiration Footprint Matrix. That one should appear in Part 3.

There is one point that I didn’t make in the Tnooz article. In some ways my research (once all 5 parts are published) is a call out to anyone looking to invest in an industry whitepaper in order to try and better quantify some of the models I am using. There is definitely an opportunity to add custom research data around almost all of the concepts I have presented. If you are interested in doing this, then you have my full permission and support. Anything that helps industry participants better understand how to master the move away from pure transactional websites towards moving more into the inspiration sphere would be welcomed by many.

Expect this blog to go pretty quiet over the coming days, as with Tnooz publishing every day, there is only so much of my writing that any sane person can absorb.

The version of this chart which I put up last week proved to be quite popular, but if you have only seen this here, make sure you read that post as well to understand the context a bit better (and see a few caveats on the data). The original chart wasn’t as clear as it could have been so I’ve improved it slightly, and included the axis which whilst not mentioned on the original chart I was given, should be read in millions.

Regular readers will know that this blog is definitely not an outlet for me to parrot the message of my employer. If I like an Amadeus product then I’m not afraid to say so and in the rare cases when I don’t, then I just ignore writing about it. But be warned, as starting Wednesday next week, I’ll be at the Amadeus Airline e-Commerce conference in Cannes, and this blog is likely to become overloaded with Amadeus content for a few days. I promise to bring back a bit more balance once it has finished.

For those using Twitter and wanting to keep abreast of things during the conference, then the hashtag to use is #1AeCom2010

You won’t see anything from me there as I’m a luddite in the microblogging world, but I more than make up for it with the ridiculously long macroblogging posts I write for Tnooz sometimes. I’m putting the finishing touches to one at the moment that was mostly written on the plane back from the US last week, and it is covering leisure travel inspiration. I hope to have it up on the site before the end of the week; especially as I’m interested to speak with airline eCommerce execs at the conference to get their feedback on if, or when and how they plan to move away from transactional websites and further back into influencing potential customers undecided on their destination, dates, budget or any part of the leisure travel experience.  

I’m not familiar with Smart Travel, and any site using pop-unders is hardly qualified to pass judgement on usability of others websites. But to give them a run they have just announced the following: Editors’ Choice Awards 2010: Best Airline Website. The winner was Frontier Airlines, with honorable mentions to Hawaiian and Jet Blue.

Recently I mentioned having seen a chart that I wanted to share, but was waiting for the OK as it was in a slide deck where every page was marked internal. Well I got the go-ahead, so here it is. 

The key takeaway here is how in all markets listed, OTA’s have grown volume whilst the industry was going through very tough times. The chart shows air volume, and only GDS segments, so it is not a complete picture of either the market or the OTA business, but I thought it was interesting nonetheless. I’m not totally sure why Asia Pacific looks low in absolute terms, but don’t pay too much attention to the unlabelled vertical axis and instead focus on the percentages.

I was talking to someone earlier today about the rapid growth of; apparently they dominate the Latin American OTA space and are growing at breakneck speed. Earlier in the week someone was talking to me about a newer US OTA that was doing well but whose name I have forgotten, and I also had a senior airline exec asking me last week about strategies for competing more effectively with OTAs. To be honest, I haven’t watched this sector as closely as I could have over the past couple of years, but with my move to the US for work, this will definitely be changing.  

The other thing I had mentioned that I was thinking of sharing but have now decided not to was from a report commissioned by Amadeus called Show Me the Value: European Online Travel Agencies Activity Based Costing Analysis. It is from December 2009 and a similar version is currently being prepared with US offline travel agencies. If the topic is of interest to you and you are an Amadeus customer, then do ask your account manager to track down a copy and to share whatever can be shared as it is a very interesting read with a lot of financial analysis and comparisons relevant to the OTA market.

Update: Click here for an improved version of the same chart

I heard a story today from a major airline claiming to have calculated that they effectively pay Google €26 for every completed internet booking coming via the search engine. I assume they meant PNR and not booking, but even at the PNR level it is a higher number than what I was expecting. I’ve got no idea how they calculated the number (ie. whether they factored in people being referred through Google but then returning directly to the site at a later date to purchase), but I thought I’d share the number anyway – treat it with caution.

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