Discussions on travel & hospitality related industry challenges, innovations, trends and information

May 1, 2013

What is Customer Experience? - A synopsis

Customer Experience is a term that, like its predecessor 'Customer Relationship Management (CRM)', is being sufficiently discussed, debated and talked about. Here I would attempt to summarise the vast literature around it in meaningful way, which even a layman can understand while making the best of efforts to ensure sufficient academic stimulation for the well-informed of the field.

1. Customer Touch points

First, let's look at what is a customer touch-point. A customer touch-point is defined as a point of interaction between the customer and the business that is selling the product/service which the customer requires. This customer-business interaction may happen over any of the channels of communication

2. Customer Experience Channels

There are multiple channels to facilitate interaction between a customer and a business. These could be classified as direct channels (like the call centre) or indirect (like TV advertising). Based on the use of technology, these channels could also be classified as Digital Channels (like Website, mobile phone) and Physical Channels (like retail store). There may also be social channels of customer experience. These are indirect channels typically where a potential customer hears about a product/service experience of a business from his/her friend. These are typically social channels, traditionally limited to word-of-mouth marketing (WOMM) but more recently including new age Digital channels like Facebook, Twitter, etc.

3. Customer Lifecycle & Stages

Customer Lifecycle is the sum-total of all the stages that a customer goes through during his/her interaction with a business from awareness, discovery, attraction, interaction, purchase, use, cultivation to advocacy/termination.

Customer_Lifecycle.png

4. Customer Journey

Each stage of the customer lifecycle above has a customer objective and the customer goes through a series of steps to achieve his/her objective. This is known as a customer journey. And Customer Journey Mapping has its promoters and detractors and the benefits have to be weighed in by the business before undertaking it.

5. Customer Experience Definition

With those basic components defined, I believe we are at a point where we can define Customer Experience. Customer Experience is a cumulative total of what a customer feels (experiences) across all touch-points, across all stages of the customer lifecycle, across all customer experience channels.

6. Customer Experience Classification

Several sub-sets of customer experience have been attempted. From online experience to User Experience to Digital Customer Experience, there are many attempts to classify/slice-and-dice customer experience subsets. But most are in its infancy and industry specific.

7. Differentiation from Customer Relationship and other previous concepts

Customer Relationship Management (CRM), Word-of-mouth-marketing (WOMM), Customer Service, Voice of Customer (VOC) initiatives and Net Promoter Score (NPS) are all concepts related to customer experience. Each of them deserves its own discussion but broadly speaking they all represent a segment/subset of customer experience but not customer experience in its entirety. E.g. WOMM & NPS mainly reflect the outcome of customer experience but do not measure its enablers.

Customer_Experience_CRM.png

8. Challenges of Customer Experience (CX)

Lastly I want to briefly touch upon the current challenges of customer experience. So assuming you comprehend CX, its value to your business but the obvious next question is how? The primary obstacles in enforcing a proper CX strategy in an organisation are as follows, in my opinion:

a. Tools for Customer Experience - There are very few IT tools available for CX namely along the following objectives:

i. Customer Experience Innovation - How do I use technology to innovate CX of my business? Are there existing tools that I can implement and let them suggest innovative solutions to my CX challenges?

ii. Customer Experience Delivery - If I have a CX strategy in place, what IT tools should I procure to implement them in my existing IT ecosystem?

b. Customer Experience Monetization - What CX strategy should I implement so that I get the maximum bang for my buck? I have attempted to address the challenge of "Customer Experience Monetization" for hotels industry in one of my other articles.

c. Customer Experience Measurement - How do I as a business quantify "experience" and then measure it? Should I measure it using financial metrics like revenue or service metrics like FCR (First Call Resolution) or survey based metrics like CSAT (Customer Satisfaction) or social metrics like NPS.

I hope the definitions and the challenges articulated would serve to give a foundation to those looking to learn about "What exactly is customer experience?" For experts in the field, I welcome them to contribute about what are the other major challenges that I might have missed out as well as proposing their solutions to the challenges I have elaborated above. I look forward to learning from my peers and seniors in the field...

Posted by Abhishek Singh at 9:39 AM | | Comments (0)

April 16, 2013

Travel & Leisure Industry: Trends & Challenges

In my last blog, I wrote about the importance of both understanding what your customers want now and more importantly, what customers are going to want in the future.  Now, I want to introduce some of the trends we are seeing today in the travel and leisure industry, and then mention some of the challenges the industry faces because of these trends.     

So, what are the current trends?  First of all, customer service continues to play a giant role in property selection.  Customers nowadays demand higher levels of customer service and want customized travel experiences.  The same is true for business travel.  There are so many options for business customers to choose from.  If one property fails to meet the expectations of a customer, he or she has plenty of other options.  Likewise, it's much easier now for a potential customer to shop around themselves to get the best value via property websites as well as travel websites like Orbitz and Travelocity.  However, people still want first class treatment.  They want something unique...something they will remember.  Business clients, while perhaps easier to predict and to cater to, make up the majority of travelers and they want comfort, and for their experience to remind them of home.

Another trend that we are seeing in the travel and leisure industry, the use of social media, has become a prevailing part in how customers shop for their hotels.  Customers are checking out many websites before clicking the "buy" button.  They tend to follow the advice of their favorite bloggers and/or friends through vehicles such as Twitter, Facebook, and Yelp to form their opinions before they make their purchase decisions.   Also, more and more potential customers are doing this on a mobile platform.  Not only do they do their research via mobile, they want to book while mobile, too.  Companies must be prepared for this if they want to be successful in this new environment.

Although customers want better experiences, the global economy (and their personal checking accounts), continue to play large roles in their decision making.  Because of the global economy, another trend we are seeing in the industry is that customers are looking for vacation resorts closer to home.  With rising fuel costs, people have less money to spend on air travel.  Thus, potential customers are looking for "all-inclusives" so they know how much they need to budget.  This price sensitivity becomes a challenge for properties as they are forced to get creative in how they package their offerings.  Similarly in business travel, businesses are becoming stricter as to which properties its employees can stay at and how much they can spend.  I know from personal experience that trying to find a hotel on a tight budget that offers the amenities I want is difficult.  Price plays a big part in my decision making process. 

A final trend that we see in the industry is that customers are looking for more "socially responsible" resorts to stay at on either business or holiday.  The topic of sustainability has become a leading one and hotel/resort customers want their properties to offer eco-friendly accommodations and experiences.  Hotel managers are certainly looking for ways to save money and going "green" often is a good way to reduce costs.  Some of things important to customers (and the businesses) are properties that are saving on water, energy, and solid wastes.  Similarly, being "green" means guests and the staff are healthier which is something we all want.

These trends are driving changes in the industry.  So, to stay abreast as to what customers want, businesses need to do the following:

·         Hotels and resorts need to use Social Media to engage their customers.  What does this mean?  Well, certainly the company must interact with their customers via Facebook, Twitter, etc.  They must keep their information (posts) fresh and perhaps offer specials through these channels.  Next, they should monitor public conversation.   The moment there is something negative posted online, they must react and reach out to the person and try and get the matter resolved. 

·         We've talked about the power of the mobile trend.  Travel and leisure businesses must allow customers to book via mobile.  More and more people would rather book mobile because of its speed and efficiency, and perhaps they just don't want to spend the time talking with somebody on the other end of the phone.

·         Green and Sustainability are not just fancy buzz words anymore.  People want to make a difference in the environment, so hotels must make their properties more eco-friendly.  Customers are placing an emphasis on properties implementing eco-friendly practices.  This could be as simple as asking their guests whether they prefer a "green" service limiting the washing of towels and sheets (unless requested), or even timers on HVAC and lighting in the rooms.

·         Finally, properties must continue to stress a high importance on customer service.  Great customer service builds customer loyalty.  In such a highly competitive industry, hotel properties must always focus on improving their offering and staying focused on its customers.

Trends need to be given the attention they deserve.  Hoteliers that do this have a much better chance of beings successful in such a competitive environment. 

Posted by Jaime Walker at 7:22 PM | | Comments (0)

April 15, 2013

Hotels - Customer Experience Index (CXi) & revenues

Customer experience as a concept is not alien to the hotel industry; some might even suggest that Hotel industry invented customer experience. With its star-ratings for establishing consistent product features to brand consistency as envisioned by Marriot, Hilton, Intercontinental, etc. hotel business has always been about creating positive experiences. From Weddings, birthdays and conferences to prom nights and honey moons, almost every consumer of the world has had some of his/her most memorable experiences in a hotel. So what is this hype about Customer Experience and can a hotel make more money with it?

Forrester's Harley Manning in his blog dated Nov' 2012, has defined Customer Experience as "How customers perceive their interactions with your company". It encompasses all touch-points while aiming to distinguish customer service and marketing from Customer Experience. Forrester has measured Customer Experience Index (CXi) since 2007 across 12 odd industries including Hotels. Hotels typically perform well in these measurements and are also one of the greatest benefactors from further improvements. Of the 150+ brands covered in the 2012 measurements, the "Good" performers from hospitality included "Hampton Inn/Suites" and "La Quinta Inn & Suites" among the top 10 Customer Experience brands. Additionally, Forrester estimates that if a hotel were to move from a below-average CXi score to an above-average score, it could see more than $1.3 billion in total revenue benefit. This roughly translates to slightly over 6% in projected increase of topline. Really? For business already excelling far beyond any others in terms of customer experience, is such a significant increase even possible?

Whether you like it or not, change is a good thing. It creates possibilities. With internet, the information and the digital age, rise of the Generation Ys and Zs, things are more dynamic than ever. With multiple channels of customer experience and competition nipping at the heels of every major hotel in the world, it is no longer about just consistency and quality. It is also about differentiation and expectation. So where do we start?

First, let's look at the different channels of customer experience

1.       Physical channels - Print Ads, Billboards, on-premise, in-room, restaurant, facilities, employee interactions, etc

2.       Digital channels - Delivered online through internet, via a laptop, Mobile, Tablet, etc. This is sometimes specifically referred to as "Digital Experience"

 

Next let's examine the different stages of customer experience. A generic hotel customer engagement lifecycle would consist of the following stages:

1.       Inspiration (Awareness of Need and Discovery of Info)  Hotel_CXI_stages.png

2.       Planning (Evaluation of Options)

3.       Purchase

4.       Preparation

5.       Stay

6.       Engagement (Advocacy or termination of relationship)... think social media and online sharing here

 

 

And then there is the how to achieve and who should be responsible? Whether you like it or not, employee engagement is a key to creating memorable customer experiences across touch-points, especially in a people intensive business like hospitality.

 

So in my opinion the three key features to maximise customer experience for a hotel would be as follows

 ·         Relevance through Personalisation - As popularised by Netflix and Amazon among other is the key to creating unique experiences

·         Ease of use - Everything from booking to check-in to ordering room service should be easy to use from the customer perspective. So obviously your IVR system asking guests to choose from 5 options for at least 5 questions before letting them talk to a customer service agent is a BAD customer experience product.

·         Fun to use - People like to repeat doing things that create pleasurable memories. We mortals are pleasure-seeking creatures and things that are fun to use and leave us with happy memories automatically draw us back to them. This is why we love our theme parks so much.

 

So why should you re-invent your product to align it with personalisation, ease and fun concept. The answer is simple - it makes business sense.

Assuming we take a hotel with following characteristics

1.       Revenue - US$4B

2.       RevPAR (Revenue per available room) - US$135

3.       ADR (Average Daily Rate) - US$180

4.       Customer base - 10 million annual visitors

5.       Average stay - 2.2 nights

Using a standard revenue projection methodology, you would be able to generate up to US$178M in additional revenue including additional ancillary sales. Furthermore, you could get additional cost savings of US$1.56M per annum.

 

 Hotel_CXI_ROI.png

 

As you can see, it pays to be rated highly on your CXI ratings. Do you still need another reason to embark on a customer experience journey? J

 

P.S.: This is the second in the series of 5 articles for Customer Experience Strategy for hotels. Previous one here

 

 

 

Posted by Abhishek Singh at 3:50 PM | | Comments (0)

April 3, 2013

Inflight Retailing - then, now and beyond...


As I took a domestic India flight over a lazy afternoon last Sunday, I was pleasantly surprised to see them make retailing efforts on-board - selling food and beverages at first and then some consumer goods like watches, eyewear, bags, etc. I was flying this airline for the first time. And it brought back pleasant memories of when I was first exposed to the concept of inflight merchandising. It was in mid-90s aboard a Singapore Airlines flight when a couple of flight stewardess rolled out the duty free cart in the second hour of the flight. Preceding that was an announcement about the same with reference to an in-pocket duty free sales magazine which had the entire product catalogue. The magazine titled "KrisShop" was printed on high-quality glossy paper making it look more expensive than any magazine you could buy in your neighbourhood shop. It had images and presentation style that would entice any window shopper to make a purchase. Not to mention the duty free rates seemed better than most airport stores. It had some very desirable luxury items at prices that not only seemed reasonable (given they were tax free) but seemed like a very good idea simply for their novelty. Back then to say "I bought it aboard a flight from Tokyo" seemed a lot better than saying I bought it in the local mall. Flying was still not commoditised in those days.

Fast forward to 2013, and the idea seemed like a stretch and a drag. Captive audience with nothing else to do, since there was no inflight entertainment on-board, it caught the attention of many but the buyers were relatively few. Food/Beverage sales were far better than merchandise, although fetching far lower prices. Here I must mention the extremely credible efforts of the inflight crew, who seemed both trained and professional in their sales efforts but meeting little success.

So what was missing?

In my opinion, at least the following:

1.     Product Catalogue - We are way past magazines for product listing. In this day and age when you can switch on your own laptops/handhelds during the flight, people are not so keen on browsing the back-seat pocket inflight magazines. Airlines have to think of a whole new product listing approach

2.     Novelty Factor - Flying is commoditised. Everyone flies and buying things on flight seem more "last-minute" than attractive. So unless you are buying something for yourself, it seems like a waste of money

3.     Optimum Sales Cycle and Price Point - Consumer products have a typical sales cycle for each price point. Some products are purchased after several browsing, comparisons and trials and some at the drop of a hat. The distinction of how long it takes to make a purchase decision for a category of the product must be factored into the choice of having it on-board. For e.g., personally I would not buy a watch costing upwards of US$50 in less than 1 hour. After all I am going to be stuck with it for a while and hence want to be careful. So trying to sell it to me on a flight with total flying time of less than 3 hours is not going to have a high probability of success. Finding the right balance between the price points and their sales cycle is very important. Fast Moving Consumer Goods (FMCG) products may be more successful in short haul domestic flights while some travel accessories like phone/laptop chargers more so in international flights.

4.     Optimum Product display - The sales carts used to sell the products must have an attractive display. We are now living in a digital age where visual appeal is a given and without it the best of sales efforts would fail. It can no longer be a cart with racks stacked with items. It needs a visual appeal to it that draws attention without seeming intrusive.

5.     Total Sales cycle - It is more about making a sale than just making the sale on-board. So the passenger should be engaged right from the pre-flight check-in to post-flight baggage collection through creative means to get them to make a purchase, rather than just limiting the sales process to 1 hour during the flight itself. I spent 40 additional minutes at the check-in gate due to the flight delay - bored out of my mind with absolutely nothing to do. Perfect opportunity to give me something engaging to read or browse. Free internet access to Airlines online product catalogues at the airport can further help to engage passengers. Digital advertising, mobile phone apps, etc.

6.     Advertising - When I went on the flight, I had no idea they would be selling things on-board. Some passengers seem to be aware but most were clueless. Most of us were short on small change as well. We were mostly carrying large currency denominations of Rs.100 and Rs.500. I did not have Rs.40 to buy a cup of coffee. Simple advertising at the gates and check-in counters, making notes of small denominations available at the gates would have gone a long way to raise my awareness as well as ensuring I was positively influenced to make an on-board purchase. A cup of coffee at the airport was cost me Rs.90. If I knew I would get a drink on-board, I would have exercised discretion.

In these difficult times, where Airlines are constantly battling unpredictable demands with wildly fluctuating oil prices, it makes sense for them to get creative about inflight retailing. Break it down, map the customer journey, re-invent the entire experience, make it enjoyable and creating a new revenue stream for themselves while improving the overall flight experience for the passenger, seems like the need of the hour for most Airlines.... I hope someone is listening, more importantly thinking about.....

Reinvent your inflight retailing to differentiate your customer experience, the time is now is all that I can say to the Airlines of today....

Posted by Abhishek Singh at 6:41 AM | | Comments (1)

March 18, 2013

Guest Personalization or Social Media Stalking: Where does a hotelier draw the line?

Guest Personalization is the ability to utilize all known customer elements about travelers to drive personalized offers and product offerings.  The goal is to generate customer loyalty, and ultimately increase revenue in the current trip and/or future travels.  This is not a new technique.  However, with the evolution of Big Data, Social Media, and business analytics, travel providers are improving the data consolidation and rapidly advancing the automated personalized experience.  As this becomes more common practice, providers NOT personalizing will be left to the wayside as guests drift to the providers that know them, making them comfortable with the experience and end product.
But what are the risks?  How close to a fully personalized experience can the system get without crossing the line to offending the guest?
Use of Social Media data to personalize the guest is highly desirable for the travel provider.  Retailers are doing it currently on many sites.  A company can offer and achieve incremental revenue beyond the basic product offering, through a little social media intelligence, revealing interests, past travel experiences, personal contacts, etc.  For example, a guest's profile including favorable pictures of a previous cruise to the Caribbean, with positive remarks, and conversational exchanges with friends can lead to offering other similar trips and/or packages that could extend to friends as well.  However, mentioning the actual names of friends may cross the traditional line of personal space boundary.  Does the guest get "creeped out" that a business knows the names of their friends?
How about the example of a hotel placing a framed family picture of a business traveler's family, found on his FaceBook page, in his room when he is away on Father's Day?  Does the guest want to know that you've accessed pictures of his children?  It might depend...  If the guest is a frequent repeat guest, who is very congenial with hotel staff, then it might be fine.  If it is a first-time or very private guest, then it may be offensive.
Yes, Social Media is by definition public data.  However, the general public doesn't want to acknowledge that they have been totally open to world, nor do they want it to be placed in front of them that they have opened themselves up to automated scrutiny.
Is there a clear line of demarcation between a fully customized, highly personalized traveler's experience and Social Media stalking?  No, I suggest it is more of a gray zone that needs to be tread on thoughtfully and carefully.
Very interested in your ideas in this thought provoking and emerging area...

Posted by Chauny Dunbar at 7:49 AM | | Comments (0)

March 13, 2013

Dynamic Pricing: What are the barriers to the perceived revenue optimization holy grail?

Dynamic pricing...a highly desirable capability that hoteliers believe will lead to the ultimate in revenue production and drive REVPAR upwards. What is it? Is it a shopping cart capability, allowing guests to plug and play with their purchases, creating customized packages? Not really...creating customized packages is dynamic packaging. Dynamic pricing is the ability to generate a price, in real-time, for travel products a guest purchases based upon many revenue management input factors, including forecasted occupancy, projected hurdle rates, projected demand, city events, group bookings, guest attributes, products requested, etc. The price generated at 1pm may be different from the price generated at 1:05pm in a truly dynamic system.
The key to truly dynamic pricing is the real time factor of the equation. Today's travel consumer expects instantaneous responses to pricing requests for travel products. In order for travel suppliers to respond to the thousands of requests hitting their systems per minute, the technology needs to be able to compute and respond with sub second response time to the traveler's request. Hence, technology has been a major inhibitor to delivering the desired functionality.
Traditional monolithic Central Reservation Systems (aka CRS) have been designed with rate databases that store room rates and related rate data in static flat file structures. As hotel companies strive to move rates onto relational database structures in conjunction with major technology moves, they open up the possibilities to move towards dynamic pricing capabilities. However, the database rate storage structure is not the only barrier.
Operationally, major hotel companies have Revenue Managers, who manually peruse the system to analyze the factors leading to the opening and closing of rates at any point in time for future stay dates. Several of the major companies have already or are in the process of moving to varying levels of Yield Management automation, systems that use scientific analytic formulas to recommend rates for future dates. Note that even with these systems, the rates are recommended, and not in all cases actually accepted and stored. There is still a level of evaluation of the recommended rates prior to pure usage in the CRS. The cost of these systems and the needed integration is not trivial. Hence, the population of hotels utilizing this level of automation tends to be focused in high volume, higher end properties. There is a large population of mid-level and transient hotels that have not made this level of investment. These properties rely on manual methods of defining and storing static rates in the CRS. Manual definition of static rates cannot support a truly dynamic pricing request in real-time.
Coupled with the manual rate definition, inputs to the Revenue Management systems are in many cases relatively manual. Inputs include city events, STAR reports, and year-over-year occupancy levels. The more manual inputs to derive the optimal rate at any point in time contribute to the difficulty in delivering full rate automation. In addition to the input, the systems must have the inherent intelligence to act accordingly to the inputs, integrating into the Yield Management systems, and subsequently deriving rates based upon all of the relevant data points.
Lastly, the evolution of high "look to book" ratios driven by travel distribution shopping engines in distant locales has magnified the "real time" technology challenges. As shopping traffic increases beyond what the CRS technology and networks can support, hotel companies are forced to deliver a set of cached rates to these shopping engines, thereby reducing traffic on the CRS to the booking side of the transaction rather than the full shopping experience. Cached rates, by definition, are not computed in real-time unless a complex set of business rules were to be developed and distributed to support dynamic rate calculation.
Is there a hotel company delivering true dynamic pricing in today's industry? No, but many are talking about it...

 

Posted by Chauny Dunbar at 8:18 AM | | Comments (0)

March 4, 2013

Understanding Your Customers: Know who they are and what they want... both now and in the future

In my last blog, I wrote about how significant customer service is to the success of a business.  In this one, I want to be more forward thinking and hit on the importance of both understanding what your customers want now and more importantly, what customers are going to want in the future.  I will also touch on the how vital it is to be aware of the trends that are active in the industry and how that relates to the ever-evolving customers' needs.  
It's essential to know your customers (and markets) to continue to generate growth.  Nowadays, a number of tools are available for companies to use to do just this.  One such tool, big data, has been mentioned quite a bit recently to describe the potential for capturing vast amounts of customer information both internally and externally, and using it along with advanced analytics to identify customers' needs and wants (ie: their behavior).   Wide ranges of industries recognize that knowing your customer leads to improved service for the buyer and results in a more loyal customer.  I would agree with this, but I would say that businesses must also analyze industry "trends" (and how these trends have evolved over time) to better forecast customer demand for products and services. 
There is certainly rich customer information available in different forms of media like email, call transcripts, and social media outlets.  Advanced analytics has the potential to fundamentally change how hospitality companies relate to their customers along with enabling better price optimization, demand forecasting, etc.  Businesses can and should leverage this information to grow relationships with customers. 
Hotels have always lowered prices to stimulate sales when demand is weak and raised prices during peak demand periods.  Hotels can now update prices for all future arrival dates to match market demands each day via advanced market intelligence applications.  Likewise, revenue management is going to all new levels with a focus on demand optimization utilizing big data and more and more hotels look to social media as a way of generating revenue and bookings.   Plus, it has already become more of a key component of Search Engine Results Page (SERP) algorithms.  As pointed out in Rauch's article in hotelmarketing.com, "Facebook's posts are already integrated into Bing search and Google+ emerged with native integration into Google search.  Hotels can no longer afford to linger over adding social media to their marketing mix. It's now a necessary element of traffic-driving success."
What do we do with this detailed knowledge of our customers you ask?  Well, we must identify what trends are taking place in the hospitality industry so that we can better forecast demand.  If we know what our customers want and how that has changed over time, we can better forecast how that will continue to change.  Knowing our customer's behavior is only half the battle.  As a business, we must then leverage the trends taking place that will spike the interest of our customers.  What capital improvements should we make?  Should we begin to cater more towards families?  Should we offer all inclusive pricing or a la carte? 
One major trend taking over the hospitality industry is mobile. The majority of all hotel and travel bookings will be done online over the next few years.  Information made available from Google states that in 2010, this # was practically 0, and in 2011 it was up to 20%.  Likewise, guests are using aps on their smart phones and social media to shop and book hotel stays.  Hoteliers need to leverage social media outlets like Facebook to see how their customers shop for hotels.  The question here is do customers like your hotel chain...and do their friends like it?
Another trend in the hotel industry is that guests now want more comfortable, "home-like" hotel rooms. They want better service, a nicer meal, employees that know them by their name when they arrive.   These additional services can mean everything from better furniture to up-to-date technology (ie: WiFi, newer fitness equipment with machines equipped with Apple and Nike hook-ups, apps, etc.).  These aren't easy requests, but these are customers' expectations, and hotels must do whatever they can to accommodate if they want to stay competitive. In a recent Wall Street Journal article, some hoteliers are offering top-shelf experiences that go beyond the typical tennis lesson or cooking class. Hoteliers are finding that they can't just offer a nice spa or a great restaurant. "To stay competitive, properties say they need to give guests access to activities--and people--travelers wouldn't have otherwise.  The activities don't usually generate big profits themselves, hotels say. But as a marketing move, the programs--particularly the most extravagant ones--can create buzz on social media."   As we've learned, a 'buzz' on social media can mean great rewards for your business.

Continue reading "Understanding Your Customers: Know who they are and what they want... both now and in the future" »

Posted by Jaime Walker at 9:42 AM | | Comments (0)

February 25, 2013

Airlines and Customer Experience Management

 

My recent article on Tnooz about Big Data's role in increasing Airlines Ancillary Revenues, went on to become the most commented article for the week on Tnooz,although it was published only on Thursday. And almost all the comments were NOT around ancillary revenues. The readers  seemed to care less about how airlines could make more money and were more interested in how they, as passengers, could get more leg room, transparent fees, friendly staff and value for their ancillary services like cost sensible movies and on-board meals.

The traveller today has a sense of mistrust towards the airlines, as an industry. Paying exorbitant prices for fairly simple and trivial requests and then being humiliated and embarrassed by airlines staff in condescending and unfriendly manner (extreme example of that being called Stupid), the air-traveller seems to be extremely frustrated with the poor service levels provided by their Airlines. Constantly changing prices, in the name of revenue management, further fail to give any clarity or visibility on the fair prices to the prospective traveller for his/her frequent and/or favoured destinations. There seems to be a real need for Airlines to embark on a Customer Experience Transformation journey, if they aim at profitability levels that some of their related industries (like Travel Agencies and Hotels industries) seem to be enjoying without the prospect of losing their customers to the next player on the block.

Personalised Customer Experience - easier said than done for Airlines needs a concerted effort on part of the Airlines. Forrester has done a great job of defining customer experience. Industry players like Oracle are doing a great job at defining the impact of customer experience as well as providing a probable solution for the problem from an Airlines perspective. Forrester has a recurring report on the Business Impact of Customer Experience, the 2013 version due anytime soon. Airlines - as an industry - fairs very poorly in these Customer Experience reports when compared to other industries, further echoing the views of most passengers today.

So what can an Airline do to improve the quality of its customer experience without breaking its back in terms of investments required? What are the trends in other industries that Airlines can learn from? What technologies are out there to help today? Are there any successful case studies that we know of?

I look forward to hearing your thoughts as I embark on an exploratory journey to answer these questions. Stay tuned...

Posted by Abhishek Singh at 3:38 PM | | Comments (0)

February 18, 2013

Big Data Analytics and Airlines Ancillary Revenue

The Airline industry today is extremely curios about two key trends - Big Data and Ancillary Revenues. Everyone is talking Big Data but what is it exactly and how does it help an Airline to make money. And then of course we have the whole song-and-dance between passenger and airlines around Ancillary Revenues and customer experience. A lot of Airlines today are fixated on the point that the only way to make more out of their passengers is to charge them large fees for trivial additional requests and of course to call them 'stupid' for not reading the fine print.[1] For an industry which practically invented the concept of customer experience as part of the pre-flight and inflight services (remember United Airlines hiring its first stewardess in 1930s[2], on-board food services, the romance and adventure[3] of the job) as well as some of the most successful Customer Loyalty Programs (Airlines miles being on the forefront) it is quite disheartening to see it struggling for survival due to runaway oil prices and employee unions. But just like any other exigency, it's time to get creative, not combative.

Big Data as understood and accepted by most industry stalwarts today is high-volume, high-velocity and high-variety information assets[4] with require veracity[5] in turn creating substantial economic value[6] and helping in effective operations, decision-making, risk management and customer service[7](Think of it as 5 Vs). So how does Big Data help to create "economic value", for an industry that has suffered with a "Loss of Shareholder Value" since 1993 at least (Refer to image).

IATA.png

As IBM strongly believes, Big Data is the "cusp of next evolution" in the field of Information and Data Management.[8] So let's look at some of the successful case studies first. Retail industry is one of those which have been on the fore-front of technology consumption (and sometimes development) of constructive data analytics to increase their sales. In the past, Amazon and Netflix[9] have been renowned for their very successful recommendation algorithms in the eCommerce space, just like Target and Walmart have been hugely successful in competitive pricing and shelf placements using advanced data mining techniques.  So whereas DataWarehousing was all about taking transactional data out of the transactional system and storing it elsewhere for offline (or non-real-time) processing, Big Data is more about processing large volumes of Data in almost real-time, to create on-the-fly value. Remember data is perishable. It has a shelf life just like everything else and whereas DataWarehousing has traditionally been unable to handle the temporal deterioration in the value of data, Big Data aims to fix it with real-time execution.

So what can an Airline really do? Firstly, I think it should STOP thinking how to make more money from its passenger and change its mind-set to what can it do to add more value for its customers. Secondly, with Big Data and real-time processing ability, it is no longer about "one size fits all". With greater value creation and increased personalisation, a higher pricing ability is natural. If I take a leaf out of the history of online commerce, it was always about selling the screen real estate to the highest bidder based on the demographics whose attention you wanted to attract. So inflight merchandising and inflight advertising are two natural offspring to this chain of thought, but not just random "one-size-fits-all" advertising. Inflight social networking and inflight entertainment are not too far behind. "Constant connectivity" - a primary human requirement that changed the world of telephony from fixed line to mobile to "smart" mobile is yet another value driver. So Airlines ancillary revenue should not just be about baggage fees or "unbundling" but should aim to create value propositions based on increasingly real-time information about customer preferences and needs and using that information for targeted services and "increased value perceptions". Other questions that Airlines can start asking themselves

1.       Are all my passengers going to need roaming facilities on their mobile phones when they travel away from their native land? Can I help them lower their roaming charges? Can I pre-stock local SIM cards of the destination I am flying to? (Think British Airways and JetStar)

2.       For customers who are travelling on a business trip, can I help them arrange local transport like taxis? Or mobile phone chargers?  Or International plugs? Or arrange for a pre-paid taxi from airport to hotel from the flight?

3.       Inflight advertising? But caution must be exercised to do it tastefully and without intrusion. Mixing it with free Wi-Fi access and premium inflight entertainment could make it seem reasonable. One could target teenagers and low fare customers before premium passengers in a personalized manner.

4.       Can I negotiate for priority immigration clearance for my business travellers who are authenticated by their employers for a certain fees? (Think  IATA's STB initiative)

5.       Does the Airline know if a passenger should get a gift for his/her spouse because he/she happened to be inflight on their Anniversary day? Can it help? Does it know the names of all the passengers who are travelling away from their homelands on Valentine's Day with their partners? Christmas? Holidays? How does it make these passengers feel part of the celebrations and not like they are missing out on something being away from their loved ones?

6.       And if you are an airline, that just want to focus on your core-competency of operating flights - safely, can you outsource pre-flight, inflight and post-flight ancillary operations to an entrepreneur with the highest potential? When you can outsource back-office operations, why not ancillary revenue operations? United Airlines with partnership with DirectTV, and Singapore Airlines' Krishop being operated by DFASS are just two shining examples of the potential opportunities. With Airlines collecting valuable passenger information, these outsourcing partners can generate substantially higher values than the airlines can do themselves.

Can we put back the romance and adventure in flying that it once was?  It's time to get creative and move up the value chain. The next generation of passengers demand not just a flight but an experience, a personalised one at that. Are you ready to serve? For the technology that can help is already here... 

Posted by Abhishek Singh at 5:45 AM | | Comments (0)

January 15, 2013

Customer Service: Earning Repeat Customers by Providing Exceptional Experiences

Hospitality businesses have the daunting challenge of trying to ensure their customers have a positive experience 100% of the time.  Particularly in hotels, there are numerous opportunities where things can go wrong.  Most of these opportunities occur at places that we in the hospitality business refer to as "touch points".  Touch points are quite simply: opportunities that customers have to interact with your products.  In hospitality, that could be anything from the points of service to the condition of the room...anywhere the customer's overall experience is impacted (either positively or negatively). 

The challenge here is that at a hotel, touch points encompass the 'entire customer experience'...from the moment they arrive to the moment they check out.  Hospitality managers plan for and do what they can to address this.  They put their best employees on the front line to greet guests as they walk through the door, when they check in at the front desk, and have some of their sharpest employees sitting at the concierge desk.  But what about all of the other steps in between?  What about the person on the other end of the phone when the customer has a question or needs help with something, or the cleanliness of the guest's hotel room, or the food the kitchen prepares that is served in the guest's room?  Personally, I can't stand it when my TV remote isn't working properly. 

Many things in between the guest check in and check out points can (and do) go wrong.  Hospitality managers know that these areas are the most difficult to manage but also the most critical to the success of their businesses.  They try their best to influence their customer's experience by aligning these touch points with better service and/or products.  However, often unforeseen situations occur and management is left to react to the situation and try to mend the relationship with the customer.
 
Managers hope the customer complains, and then Mr. or Ms. Manager has an opportunity to better the situation with a give-away, a discount of some sort, or maybe even just a nice hand-written letter of apology (do people still do this?).  The worst thing for management is when the customer does not complain to the business, but rather complains to his or her friends...or even worse, posts something on their Facebook page, writes an undesirable article on their blog, or a dreadful review on Yelp.  This form of negative marketing can be detrimental to the business.

So, how do we as hospitality managers try to mitigate this?  Yes, we can try to hire the best people and continuously train them and provide them with the tools they need to be successful.  But, the most important thing we can do is earning repeat customers by providing exceptional experiences.  What do I mean by this? 

First and foremost, we must ensure the quality standards are being met.  As I mentioned earlier, we want to try and shape our customer's impressions with positive "touch points".  To do this, hoteliers have to first define the quality standards, and then 'inspect what they expect'.  Are your employees doing what you expect them to do?  The only way to find out is to set the standards, determine whether they are being met, and hold people accountable to the expectations. 
 
Then, we want to remove as many opportunities for things to go wrong as possible.  This is very simple...you must tighten your processes up.  Have a checklist for your staff where it requires them to check the TV remote after the floor is vacuumed.  As we focus on our customers through delivering positive experiences, we then begin to "market" our services.  

Lastly, we need to make things as easy for the customer as possible, and often times this means improving technology so that our customer's experience is as seamless as possible.  Some of the things hoteliers are doing now in this arena are as simple as offering hi speed Wi-Fi in the rooms, mobile check in/out, and the means of identifying our customers by name without having to ask them for it. 

When touch points are given the attention they deserve, the customer's experience improves considerably.  Hoteliers that do this ensure their guests have an enjoyable visit, and reviews are reflected positively on social media sites.  You too can earn repeat customer through providing exceptional experiences by focusing your energy on touch points...and ultimately, your customers.  Could this be as simple as a complimentary coffee station and newspaper in the mornings?  Or is it strengthening your technology capabilities?  Whatever it may be...your goal should be to make sure that your guest has an enjoyable stay...and keeps coming back!!

Posted by Jaime Walker at 4:04 AM | | Comments (0)

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