In an excellent piece on how Amazon uses big data to win over customers, Sean Madden explains exactly what Amazon does right that so many of its competitors do wrong: “In order for interactions to feel individualized and human, they must be well informed.”
At any time, an Amazon service rep can pull up a customer’s purchase history, the way they’ve interacted with the website, and all of their saved information on file. That’s why they can solve problems painlessly and within minutes. They have you at “Hello.”
Yet most companies don’t use their data the way Amazon does. As Sean points out, many corporations are far more interested in big data’s impact on efficiency than its potential for real, meaningful customer conversations.
The airline industry is no different. Aside from a few pioneers, most airlines around the world are still a few decades behind. Their offices are full of paper trails, and their servers are a jumble of disorganized and unstructured data. This shouldn’t be the way of things. With small investments in data collection and analysis, even smaller airlines could use big data to impress, delight, and re-engage existing customers.
Here are 4 examples of how modern airlines are leading the big data revolution:
1. Highly Personalized Offers
There’s nothing inherently surprising or innovative about automated offers. Every industry has them, and it doesn’t take particularly long to write up a customized algorithm that makes sense for a given set of products and customers.
But when a single airline booking has so many moving parts (e.g. checked luggage, destination, departure date and time, departure city, arrival time, in-flight amenities, hotel, rental car, etc.), things get a lot more interesting. Airlines have to get creative to stay on top of the ball and out-offer their competitors.
For example, United Airlines switched from a traditional “collect and analyze” approach of up-selling add-ons to a smart “collect, detect, act” system that analyzes 150 variables in a customer profile. Everything from previous destinations to prior purchases are assessed in 200 milliseconds to determine a flyer’s likely actions, and to come up with a tailor-made offer. This new system has increased United Airlines’ year-over-year revenue by more than 15%.
2. More Insightful Calls
Meanwhile, Southwest Airlines has paired up with Aspect, a software company, to create a new suite of customer contact and workforce optimization solutions. One solution that stands out from the rest is a speech analytics tool that will allow customer service reps to understand the nuances of every recorded customer interaction.
But it doesn’t just end at phone calls - Southwest reps can also analyze online data from channels like social media to gather even more information about customers in real time. Different metrics will guide service personnel to the best solution in every scenario. Southwest Airlines has always been admired for its award-winning customer service, so it’s likely many other airlines will soon follow suit.
3. Smarter, Safer Flights
As pictured in the infographic below each engine of a Boeing 737 produces over 20 terabytes of data per hour. A typical six-hour cross-country flight generates 240 terabytes of sensor data from a single plane. Southwest Airlines has 696 airplanes, and a whole lot of data it can mine.
Going straight to the experts, Southwest has partnered with NASA since 2008 to data mine its massive sensor data cache in an attempt to improve air safety. Powered by machine-learning algorithms that teach computers what to look for, NASA has created an automated system capable of crunching vast data sets to find anomalies that could indicate potential safety issues. Southwest hopes that NASA’s expertise will allow it to one day fly its fleet of 696 planes without a single incident.
4. Real-time Baggage Status
According to Paul Skrbec, a spokesman for Delta Air Lines, “every customer has had the experience of boarding a plane after checking their bag and wondering if it was there.” That universal fear is why Delta Air Lines has introduced an innovative baggage tracking app for customers.
The new app uses the behind-the-scenes baggage check data that Delta personnel use to make sure bags don’t get lost, and simply presents it in an easy-to-use tracker for worried flyers. Radio Frequency Identification (RFID) will replace the barcode hand scanning that’s been an industry standard since the early 90s.
Delta has always had a major interest in guaranteeing the safety of the 120 million bags it handles annually. It’s invested millions of dollars in baggage tracking in the past, and the new RFID system at 344 stations will cost a cool $50 million. It’s a rare example of a major airline making a big, untested innovation to improve customer satisfaction.
If Airlines Build It, Passengers Will Come
Marketing, flight operations, crew operations, and air cargo are all areas of rich opportunity for airlines to develop integrated big data solutions. When airlines are so focused on selling seats with existing inventory systems, there’s still a huge gap in the market for better personalized marketing and customer experiences.
Like happy Amazon customers, frequent flyers want to know that their airline knows where they are, who they’re traveling with, and what the weather’s like at their destination at all times. These are valuable data points that airlines already collect - they just need to find a better way to connect the dots.