From one-size-fits-all to personalization in the travel industry

Then versus now

Organizations used to shape their marketing strategy around the product or service they were selling. Supply wasn’t tailored to individual requirements; instead the approach was a one-size-fits-all in which the product or service used to play the decisive role. Nowadays a different marketing strategy is needed: one where the customer’s requirements come first. Customers don’t want to have to trawl through a never-ending range of vacation options – instead they simply want to get hold of relevant information quickly. Providing relevant information to individuals requires personalized marketing. To accomplish that, organizations need to have lots of information about individual customers. Determining customer preferences is inextricably linked with collecting and analyzing data, creating personal customer profiles and matching products or services to those profiles.

In the travel industry, the transition from one-size-fits-all to data-driven personalization is currently in full swing. Besides this approach being much more effective from a sales perspective, it also helps to build customer loyalty. Parties that cling to the traditional approach and treat the market as a single entity are struggling. An example is the recent bankruptcy of tour operator Thomas Cook, who didn’t succeed to anticipate the trend towards personalization on time.

Disruptive ideas

The travel industry is increasingly starting to realize that customers see travelling merely as a means to a (greater) end. Customers don’t just want a trip – they want an experience. The flights, transportation and accommodation all serve to fulfil the individual’s ultimate need for an experience.Therefore, it’s no wonder that travel organizations are increasingly becoming aware that they need information about their customers to ensure that their offering matches customers’ personal requirements as much as possible. Yet where to begin?

Profiling and optimization in the customer journey

The transition from one-size-fits-all to a personalized offering starts with identifying the different phases that the customer goes through when booking their trip: this process is known as the customer journey. For the travel industry, seven distinct phases can be identified within the customer journey:

1. Orientation
2. Selection
3. Booking
4. Travel
5. Stay
6. Activity
7. Sharing

Organizations can turn their customer journey into a data-driven journey, by which they can decide which personalized information and option they want to offer to an individual, at what phase. Besides that, there is currently also another challenge within the customer journey in the travel world: as travelers are looking for full vacations rather than having to select individual components of their trip from different providers, organizations need to widen their service and offering so that customers can effortless assemble all the different elements into a vacation. This enables suppliers to cater to an ever-larger part of the overall journey and expand what they offer through touchpoints (contact moments with the customer) that are aligned with their existing offering. For instance, NS - principal passenger railway operator in the Netherlands - offers not just train tickets but also accommodation and activities; AirBnB focuses, besides private accommodation, now also on excursions; and KLM allows you to book not just flights but hotel stays as well. Partnerships between parties in successive phases of the customer journey can offer highly lucrative cross-selling opportunities to all parties concerned.

Drawing conclusions from basic data

From all data available, it’s the trick is to derive the clearest possible picture on individual customer preferences. By using smart techniques such as machine learning and artificial intelligence, it’s possible to develop predictive models that can predict the characteristics of individual visitors. From basis data of website visitors, various general conclusions can be drawn. For instance:

• There’s a link between the age of visitors and the time of day when they visit the website.
• Orientation is increasingly being done using smartphones, but when it comes to the booking phase, people generally use computers.
• Even conclusions can be drawn from whether a visitor is using an iPhone or a Samsung device.

These conclusions can be included in a recommender, which ensures that travel customers will always get to see the most relevant offering for them.

The more customer data you have, the better

Organizations in the travel industry need to step up their game and get to know their customers a whole lot better. This will require substantial efforts, but with the aid of smart technologies, it’s possible to gain new insights and customer knowledge even from a limited amount of data. As a result, the industry will be able to tailor its own offering - and that of any external partners – to the customer journey. In a market in which supply is continuously growing, that’s the key to standing out from the crowd.

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