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What Airlines Reveal About Technology And Customer Loyalty

In an industry where price and convenience rule, how can brands differentiate?

22Nov

Digitization in almost every industry has created opportunities to add value for both consumers and brands. A more convenient, better service for the consumer means not just greater opportunity for sales but an increase in customer loyalty. And, if there’s one industry that has been affected and improved by technology and data, it’s aviation. The experience of booking an international flight is so radically different to how it was 15 years ago, that its difficult to think

of an industry that has been so dramatically turned on its head by technology.

The experience of walking into a travel agent, discussing the options for a holiday and booking often with very little idea of the alternatives is dead; this is the age of transparency. Take, for example, the aggregators and comparison sites - like Skyscanner - that have streamlined the process of booking flights down to a few clicks. In one place, customers can now search for the very cheapest, most direct route to their destination with the price breakdown right in front of them available for adjustment. Budget airlines have always had a hold on the casual traveler, and it still values convenience and price above all else. Comparison sights, though, allow luxury airlines to have their cheaper options presented to the low-end consumer, and vice versa.

Though convenience (26%) and price (25%) are still most travellers’ key decision influencers, the importance of transparency has recently ballooned. In a recent survey by TripAdvisor, 71% of travellers responded that they found baggage fees and seat selection fees to be a particular pain point, particularly given that these features would traditionally be included. Consumers want a system in which the price you see is the price you pay, a system not necessarily encouraged by airlines that would rather not be directly compared.

It’s here that airlines have to be careful. True transparency would be to give consumers the full price, including their additional ‘extras’, alongside that of their competitors. Travellers expect to pay more for an upgraded seat or included car rental, of course, but too many additional costs that many would deem essential - like luggage - will turn customers off. Tech gives airlines the capability to keep the consumer informed at every step of the purchasing journey as to what exactly they’re paying for and why, though this can be something of a poisoned chalice for budget airlines looking to build an income on additional fees.

What a direct price comparison also means is a difficulty building any modicum of brand loyalty. Particularly among budget airlines, how does a brand differentiate itself from its competitors when the key metric is price, short of lowering theirs? Technology can help here, too. 57% of consumers would like mobile or email communication regarding waiting times at check-in and security prior to arriving at the airport, and 48% would like travel information to and from their destination. Some 30% would like information on suggested destinations based on their previous travel history - the opportunities for airlines to deliver a positive digital experience are numerous.

‘Every carrier is facing the same competitive pressures, which makes it even more important to find new ways to differentiate your brand,’ said Florent Coudyser, Head of Travel, Relay42. ‘The good news is that digital technologies can be quickly implemented. However, carriers need to be methodical and strategic in their approach. If individual applications are not integrated it will create a disjointed picture of customers, which will lead to frustration not stronger customer engagement.’

The airline industry is an interesting example of one dominated by regulation and hyper-competition. With consumers able to be swayed by the slimmest of price margins, airlines are forced to find other ways to bring value to their customers, and almost all drivers of convenience in the industry at present are digital. In an industry with huge disparity between budget and luxury brands, those at both ends of the spectrum are competing with ultimately very similar competition. The use of technology can make the buying process both more streamlined and transparent, but also has an important impact on the customer experience both leading up to, and during, the journey. Brands from all industries should consider both. 

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