"We're seeing tangible, pragmatic business benefits using big data, whether it's to increase the look-to-book ratio, decrease the cost of operations, boost revenue yields or increase customer satisfaction," says Herve Couturier, executive VP at reservation services giant Amadeus. Couturier's observations stem from "Big Data in the Travel Industry," a report Amadeus just released with analysis provided by Tom Davenport, the noted analytics expert, author and college professor. The report finds that innovative approaches are flourishing, with a growing list of real-world examples of big data and advanced analytics in action.
British Airways Know Me
British Airways (BA) is a big data practitioner that wanted to improve customer centricity. Where the airline’s knowledge of customers was previously siloed across operational systems and the loyalty program called “Know Me” instituted last year blended loyalty information with data on the online behavior and buying habits of 20 million BA customers.
British Airways is doing this to remember personal preferences For example, it can spot when passengers choose window seats for short-haul flights and aisle seats for long-haul flights because they want to stretch their legs, and that pattern can then be repeated or generated automatically next time the passenger makes a booking on BA.
Know Me is powered in part by analytics software from Opera Solutions that helps the airline come up with targeted thank you offers for continued loyalty or upgrade offers to offset service lapses such as misplaced luggage.
"Previously it took six to nine months to build a single analytical application at BA, but now they can do it in two to three weeks," said panelist Arnab Gupta, CEO of Opera Solutions. "That has let loose their innovative energy, and if they want to come up with a seating upgrade offer, the can quickly figure out who to target."
Opera works across many industries, and Gupta said the most consistent big data stumbling block he encounters is the mindset that it has to be a big-bang IT infrastructure project. "People make the problem larger than it needs to be," he said. "If you just shift your perspective to solving specific business problems in specific domains, it will open up a world of projects you can get done relatively quickly."
"They're combining everything they know about passengers, and historically that sort of information has been very fragmented across a variety of system," said Davenport. "They're also bringing that information to the front lines -- even to the cabin crews using iPads -- so it adds up to an impressive effort."
Not without its Critics
BA’s Know Me program also uses Google Image search to help staff recognize “captains of industry” and million-mile fliers when they enter the airport or first-class lounge and approach those customers to provide tailored attention. Since last November, the airline has loaded iPads with the travel itinerary, complaint history, and frequent flyer status of high-spending passengers and handed these iPads to about 2,000 front-line employees. But this has sparked a furor among privacy advocates, who are upset that the airline hasn’t asked permission to do the searches, that it stores the images that are linked to profiles, and that front-line staff might in some way abuse the information.
Joe Boswell, British Airways’ head of customer analysis, responded saying “We’re essentially trying to recreate the feeling of recognition you get in a favorite restaurant when you’re welcomed there, but in our case, it will be delivered by thousands of staff to millions of customers. This is just the start. The system has a myriad of possibilities for the future.”
But BA is not the first airline to be accused of inappropriately using passengers’ online information to “enhance” the flight experience. When KLM announced “Social Seating” in December 2011, privacy advocates suggested the new program was inappropriate and could easily be abused. KLM ultimately made the program optional, and it requires electronic consent from each passenger prior to enrollment.
In any case, it is well understood that every time you try to link and integrate consumer history and behavior in order to gain more insight into their future needs and ultimately to make more money, some privacy advocate group is going to raise some concerns, finding the right balance is not easy but that is a topic for another discussion.