How Airlines are Using Big Data
The use of Big Data technology is revolutionizing every industry. Harnessing insights from Big Data provides companies with a significant competitive edge. Among the industries with access to diverse data from various sources, airlines are leveraging data collection and analysis to their advantage.
Airlines have long been experts in customer experience, both before and during flights, with successful loyalty programs such as airmiles. However, many airlines have yet to fully embrace the potential of big data technology. With their access to substantial data, prioritizing data collection and analysis could enable even smaller airlines to utilize big data to adapt to market trends and meet customer needs.
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Let's start by examining the data that airlines and their frequent flyer programs gather about us in order to monitor, assess, and analyze our behavior.
- Search history
- Purchase history
- Checked luggage
- The date and time of departure and arrival.
- Destination & Departure city
- In-flight sales/duty free spend
- In-flight food choices
- Hotel, rental car connections
- The count of individuals traveling with us.
- Credit card points earned
- Miles used
- The impact we have on others through our social media presence.
Here are a few examples of how the airline industry is harnessing the vast amount of data we generate for our benefit:
Personalized Offers
Let's talk about one of the key benefits of big data: personalization. We all understand how customized offers can enhance customer satisfaction and ultimately build loyalty, which is the ultimate goal for any company. Airlines have a unique advantage in collecting customer data, as even a single booking can yield a wealth of valuable information.
Many airlines are leveraging big data to enhance the customer experience. For instance, United Airlines has implemented a sophisticated "collect, detect, act" system that analyzes 150 variables in a customer's profile. This system takes into account everything from past purchases to customer preferences in order to present personalized offers. As a result, United Airlines has seen a significant increase in year-over-year revenue, exceeding 15%.
British Airways has also implemented a 'Know Me' feature, which conducts a thorough analysis of each customer's data to deliver personalized results. According to the airline, their customers are busy individuals who value relevant offers and don't have time for irrelevant ones. The 'Know Me' program uses customer data to create tailored and targeted 'next best offers' for their consideration. This approach has garnered positive feedback from customers, who appreciate British Airways' understanding of their air travel needs.
Improving Marketing Efforts
Airlines commonly utilize big data to enhance their marketing efforts, which is essentially the next step in personalization. By gathering detailed data from individual customers, airlines can offer them special deals, increasing the likelihood of a positive response. This, in turn, allows airlines to understand how customers think and behave, informing future marketing activities. For example, an airline might launch promotions for flights to Italy after analyzing trends that show increased interest in travel to that destination.
An illustrative case comes from Boxever, a marketing platform for the travel industry. One of their clients developed a marketing strategy focused on abandoned carts and sent personalized emails to these customers. This initiative resulted in subsequent bookings worth $1 million per week from these communications.
Pricing and Network Strategies
Many airlines are going beyond basic data collection and analysis. They are delving into big data, tracking travelers' purchasing activities and monitoring travel demand patterns globally. When an airline observes an increase in demand for flights from point A to point B, they can adjust prices accordingly. They can also identify which customer segments are sensitive to pricing and assess the price range for each segment on a given route. EasyJet, for example, has invested in an artificial intelligence algorithm that dynamically sets seat prices based on demand in real-time.
Big data analytics can leverage historical information to predict demand up to a year in advance. It also aids in decisions regarding the launch of new routes, schedule adjustments, and codeshare alliances.
Smarter Flights
During a flight, an enormous amount of data is generated every second, including pilot reports, incident reports, control positions, and warning reports. When this data is carefully monitored and analyzed, it has the potential to enhance flight safety.
Southwest Airlines has collaborated with NASA to identify potential safety issues. Through the use of machine-learning algorithms, they have developed an automated system capable of analyzing vast datasets to detect anomalies and prevent potential accidents.
Increasing Customer Satisfaction
- Real-Time Baggage Status: Delta Airlines has launched a mobile application that enables customers to track their luggage from their mobile devices. The application utilizes the same baggage data used by Delta staff. Despite initial skepticism, the app has been downloaded by over 11 million customers.
- Wearable Technology & IoT: Turkish Airlines is set to utilize big data and Internet of Things (IoT) technologies at Istanbul's new airport in 2018. They will deploy beacons in the new Istanbul airport that will interact with smartphones to help customers navigate to lounges, dining options, retail outlets, and boarding gates. Additionally, customers will be able to save the location of their parked cars and track their children using smart bracelets, even when the children are traveling alone.
- More Insightful Customer Behaviours: Southwest Airlines utilizes a speech analytics tool that enables customer service representatives to grasp the intricacies of each recorded customer interaction. They also analyze real-time data from various online channels, such as social media, to gain deeper insights into customer behavior. This data, in turn, guides service personnel to provide the best solutions in every scenario.
Conclusion
In conclusion, the airline industry is leveraging big data to revolutionize customer experience, marketing efforts, pricing strategies, flight safety, and overall satisfaction. By harnessing the power of data analytics, airlines are able to offer personalized offers, improve marketing efforts, optimize pricing and network strategies, enhance flight safety, and increase customer satisfaction through innovative technologies. This proactive approach not only benefits the airlines but also enhances the overall travel experience for passengers, showcasing the potential of big data to transform the aviation industry.
FAQs
Q: How are airlines using big data to enhance customer experience?
A: Airlines are leveraging big data to personalize offers, improve marketing efforts, adjust pricing and network strategies, enhance flight safety, and increase customer satisfaction through real-time baggage tracking and the use of wearable technology and IoT.
Q: Can you provide examples of how airlines are using big data for personalized offers?
A: United Airlines and British Airways are using big data to analyze customer profiles and deliver personalized offers based on past purchases and customer preferences. This has resulted in increased revenue and positive feedback from customers.
Q: How are airlines improving their marketing efforts with big data?
A: Airlines are using detailed customer data to offer special deals and understand customer behavior, which informs future marketing activities. For example, Boxever's client saw a significant increase in bookings by sending personalized emails to customers with abandoned carts.
Q: In what ways are airlines using big data to adjust pricing and network strategies?
A: Airlines are tracking travelers' purchasing activities and travel demand patterns globally to adjust prices accordingly. EasyJet, for example, has invested in an artificial intelligence algorithm that dynamically sets seat prices based on real-time demand.
Q: How is big data being used to enhance flight safety?
A: Southwest Airlines has collaborated with NASA to develop an automated system that uses machine-learning algorithms to analyze vast datasets and detect anomalies, thus enhancing flight safety.
Q: How are airlines increasing customer satisfaction through big data?
A: Airlines like Delta and Turkish Airlines are using big data to provide real-time baggage status updates, utilize wearable technology and IoT to enhance the airport experience, and gain deeper insights into customer behavior to guide service personnel in providing the best solutions.
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