Airline loyalty programmes have long been emulated by other verticals like retail, hospitality and entertainment. For decades the industry has been looking to innovative solutions in order to improve customer experience and to differentiate on service including in-flight entertainment, lie-flat beds, onboard Wi-fi, and in some cases fine dining and comfy bedding.
So it’s fitting that in 2013 airlines and their partners will continue to innovate while still looking for ways to monetise better service, both directly through ancillary revenues and indirectly through fares.
Specifically, more airlines are learning that for passengers, the key to an enhanced in-flight experience comes down to delivering genuine customer engagement, alongside a variety of retail offerings, just as they’ve come to enjoy and expect elsewhere in their lives. But in order for that to take place, several commitments from airlines must be met:
• An unflinching embrace of passenger technology - think smartphones, tablets and smart cards that include NFC technology or other contactless payment methods - so that the cabin becomes more akin to everything passengers do on the ground.
• The use of PEDs by cabin crew to augment their knowledge of passenger needs, wants and desires, turning a passenger into a name with a history that goes beyond their immediate travel plans… not just as an anonymous seat and row number;
• The reliance on next-generation In-Flight Entertainment (IFE) and Point-of-Sale (POS) technologies that make the shopping experience seamless and pleasant, for both passengers and cabin crews.
Central to an enhanced – and monetised – travel experience, one that offers value in a genuine manner, is knowledge of your customer. Like retail stores, using analytics to collect, organise and act on the metrics generated by the point of sale technologies is critical if the cabin is to become an engaging sky-high shopping destination that rivals those on the ground. Analytics or business intelligence data now include: product and sale performance, passenger behaviour, passenger profiles and preferences, the routes they typically fly, and whether they are travelling for business or for pleasure. With this knowledge, an airline can now understand passenger demand in each market and truly deliver on it. And, in the process, the airline will not only satisfy its customers but materially improve its onboard revenues.
Evolving from point of sale to point of service
In the cabin, point of sale must transform into what I like to call “point of service,” evolving from an anonymous transaction-based environment to something far more knowledgeable and personal, for example:
• Does that passenger prefer a glass of red wine, or a glass of scotch?
• Are they a frequent flyer and what information about connecting flights and gates do they need?
• What will the passenger do at the destination and can the airline help them make the trip more enjoyable by offering a relevant selection of ground connections and destination-based activities?
Previously, customers swiped a card and the transaction was complete. Today, passengers are viewed holistically with personal histories that go beyond their immediate travel plans and therefore the products offered to them speak to that finely tuned picture.
The good news is that airlines are already going in this direction. US Airways, for instance, became the first airline in 2012 to go live with contactless payments and retail analytics, while British Airways launched its “Know Me” programme, which allows cabin crews to search images of passengers via Google on their iPads in an effort to literally connect a name with a face. For passengers, these developments mean enhanced services. For airlines, it means new ways to promote service-driven ancillary revenue solutions and improved profitability.
Next generation In-Flight Entertainment (IFE) solutions offer an entirely new customer experience, not only through much larger selections of entertainment options but also expand beyond movies, music and games. IFE solutions now become an extension of an airline’s store, offering passengers relevant content they want based on their destination. The end result is that travellers no longer have to wait until arrival to purchase activities and ground connections, but can do so from the comfort of their seat while making great use of their time in the air. What’s more, these IFE solutions now come at much lower cost points and weigh less by utilising streaming technology. Combined, these weight reductions and wireless solutions can translate into millions of dollars of fuel and maintenance cost savings per year. And if that’s how much one airline can save in costs and earn in extra revenue with a single change, think about the impact on the industry when these tech-centric and consumer-focused policies become more accepted and common throughout the cabin?
Airline retrofitting costs aren’t cheap and the required cabin crew training also comes with a price tag. But customer centricity and customer service is a lesson that winning airlines are fully embracing to better weather global economic challenges, rising fuel costs and aggressive competition from new and old rivals alike.