In our framework for loyalty, customer experience is key. Expectations of the travel industry are changing rapidly: travelers seek seamless, flexible and highly personalized experiences. Loyalty programs need to be reimagined as data-driven, real-time tools for decision-making, that are highly adaptive and can be evolved to meet tomorrow’s needs.
That vision can only be built on the foundation of coherent insight drawn from customer and business data. It demands the capability to gather, integrate, and analyze vast amounts of data. Yet for many companies, this is a work in progress: legacy IT infrastructure is a major barrier to this level of insight and agility.
A fully future-ready level of maturity that is cloud-, AI- and blockchain-enabled
Organizations at level four—with the right technology and data capabilities, talent and aligned processes—enjoy 1.7x higher efficiency and 2.8x higher profitability than their competitors.
However, just 6 percent of companies in the travel industry describe themselves as future-ready now. Only 30 percent expect to be future-ready by 2023.
higher profitability at level four versus competitors
higher profitability at level four versus competitors
The ones that lag behind will struggle to give travelers what they want, and their bottom lines will suffer. For the travel industry, the journey to digital maturity is critical.
Into the cloud
One of the best powerful levers for revitalizing the data model, leveraging better insights and enabling action on-the-go to capture customer loyalty, is switching to cloud technologies.
Accenture’s Right Cloud Mindset in Travel Research (August 2021) shows that 30% of companies have implemented cloud at scale, while 35% are in the transform phase and have implemented cloud for specific purposes. With around two thirds defining their road map for the cloud, there is a clear direction of travel for the industry.
of companies have implemented cloud at scale per Accenture research.
of companies in the transform phase and have implemented cloud only for specific purposes per Accenture research.
Cloud capacity is not a prerequisite for companies to rethink their data model. Those without cloud capacity cannot wait before using data to revitalize their approach to customer loyalty. Yet it is a powerful enabler for the future, allowing data to be securely integrated and analyzed at scale and enabling new networks between previously unconnected services to enhance the customer experience. For example, passenger data could be linked with baggage systems to provide better information about luggage location. They could nudge late-comers with mobile alerts—or offer expedited airport service for a fee.
The cloud also democratizes access to data across the organization and enables sharing with trusted partners. This means that companies could offer travelers targeted add-on services, such as in-flight meals from an airport restaurant, or a rental car with flexible collection options. And as customer behavior data builds up, data insights allow for better targeting: recommending a customer’s favorite restaurant when it is available in a different location, for instance, or offering a promotion on the car they have hired before.
The link between data and customer loyalty depends on how effectively travel companies can use data to surprise and delight customers by providing exceptional and seamless services. Some aspects of great service— great communication, convenience, mobile updates, and personalized offers—can be automated with technology.
But in travel, it is the human touch that has always marked out the very best of the industry and generated lasting loyalty. So the real value of data is unlocked when firms combine a data-led approach with that human touch to create superlative experiences.
This means giving frontline employees access to customer specific insights in real time along with relevant choices to delight the traveler, and empowering the employee to make decisions based on it without having to defer to management. They could, for instance, offer a complimentary hotel meal to a guest who gave a low satisfaction score for a previous stay, for instance. Virgin Hotels is one brand that has made much of its ability to personalize guests’ stays. Defining personalization as giving its employees the tools and empowerment to deliver to client expectations—whatever it may mean—has seen the chain respond to quirky one-off requests such as comic-book-themed room ‘takeovers’ to more mainstream gestures like free room upgrades and dining offers.
This approach needs an empowering culture that enables staff to make decisions without continually escalating them to management—to enhance the travel experience, and to fix problems, fast, if something goes wrong. And it requires a high degree of data literacy across the relevant set of employees—especially department and function managers—spanning sales, marketing, customer engagement and revenue management.
Create a virtuous cycle of data-sharing
There are two developments in the business environment that have strengthened the case for cloud. One is the tightening of data protection and privacy regulations in many parts of the world. The second is the response by some tech firms, led by Apple, to offer customers greater online privacy. This could mean the end of cookies, denying marketers the ability to target customers through the use of third-party data. The result is that travel companies—like other businesses—will rely more heavily on proprietary data.
To encourage customers to share their data, travel companies must prove that they are using it to deliver great products and services, creating a virtuous cycle where customers are eager to share data in return for improved benefits. Most users of leading tech firms like Google or Amazon do not hesitate to share their data, because they implicitly know that they get a significantly better service in return. To help create the habit, instant rewards—delivered through redesigned loyalty programs—may help incentivize data-sharing.
Get creative to attract and retain digital talent
One easily overlooked dimension of digital maturity is talent. Implementing the technology to collect data is one thing: generating actionable insights to win customer loyalty is another.
It means that travel companies are now competing for talent with leading digital businesses. As some of Accenture’s clients have realized, travel companies need to show the opportunity to work on exciting projects and offer clear career paths for professionals such as data scientists, whose skills have not typically been needed or valued by the sector. The travel industry cannot compete with the tech giants for reward packages, so it needs to get creative in developing employee propositions that attract the talent it needs.
In some ways, the travel industry has been slow to digitalize. In an era of intense competition for market share and customer loyalty, data will be critical. It is time to accelerate change. When it comes to the ‘mind’ of customer loyalty, now is the time to rethink the data model.
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