Airlines need to invest in unifying customer information across their systems
Published: 26 Nov 2007
According to Patrick Grubbs, Industry Director - Aviation & Hospitality, Oracle Corporation, "Airlines need to invest in unifying customer information across their systems for marketing, reservations, operations, revenue management, and financials. With a unified customer profile airlines can up-sell/cross sell additional travel options and services leading to customer retention, lower costs of customer acquisition, and enhanced marketing that is relevant and useful to the customer."
Grubbs spoke to Ritesh Gupta about Oracle's expertise, optimal use of customer data repositories and much more. Excerpts:
Considering Oracle's expertise in offering integrated Customer Relationship Management (CRM) solution, what new trends have you witnessed as far as airline and hospitality industry are concerned?
Well, first, the most prominent trend is a renewed focus on the customer. Since 2001, the focus in the travel industry was cost containment and right-sizing the operation to adjust to the new travel paradigm. Now, that's not to say that the customer was totally ignored, but it was obvious the attention was on survival. Now that fundamental changes are in place, the focus on attracting and more importantly retaining profitable customers has risen to the top of the priority list.
There is also a customer trend to consider and this is seen in the traveler's behaviour, much of it was a result of the situation that I just referred to. The impact of the changes thoroughly frustrated the frequent as well as infrequent travelers to the point that they've recently demanded that government step in and provide traveler protection. So the traveler has become more demanding of the travel providers to provide value – beyond low fares. This customer is looking for the best possible pre-travel, travel, and post travel experience. As competition continues to be intense, the best way to provide more is via CRM initiatives – beyond just the "earn and burn" aspect of frequent flyer programs. With the traveler's permission the airlines have to use customer data to enhance the marketing of additional services such as lounges, reserved travel as opposed to standby travel for a small fee, and enhanced airport check-in systems to make the process of boarding and check-in more efficient.
The same holds true for the hospitality sector. It is not sufficient to just provide a bed and a pillow. Customers are looking for innovative packaged solutions and collaboration across the travel providers to make the experience better. The reliance on the airline loyalty programs is also diminishing as the hotel & resorts have provided tangible benefits to their frequent and profitable customers. Knowing customer preferences is also key for hotels to offer additional services that allow them to increase their wallet share from services.
In developed markets, commercial databases are now allowing airlines to uniquely identify above 90 percent of all of the customers who get on their aircrafts. Where do you think this puts suppliers like airlines when it comes to capitalizing on such developments?
I think the airlines are cheering the availability of these databases. Now they can mine and analyse disparate data and attribute it to a customer and reference it against preferences and patterns. I feel that this is a defining element that has enabled the industry to go from a "PNR Centric Environment" and a "Customer Centric Environment." To capitalise on this, airlines need to invest in unifying customer information across their systems for marketing, reservations, operations, revenue management, and financials. With a unified customer profile airlines can up-sell/cross sell additional travel options and services leading to customer retention, lower costs of customer acquisition, and enhanced marketing that is relevant and useful to the customer.
Companies have number of customer data repositories, often not shared between departments and certainly not used in a coordinated manner to ensure that everyone has a complete 360-degree view of the customer. What do you think is still resulting in failure related to truly integrate customer data?
Integrating customer data continues to a challenge for most companies. Most companies understand the importance of customer data integration and the benefits across the order-cash and procure-pay process flows. However, they tend to keep postponing customer data integration projects because customer data is embedded in complex legacy systems and they have real concerns about cost, schedule, and operational impacts when there are issues. The decision to create a global customer repository often gets coupled with decisions to replace legacy systems. In the interim:
· Key enterprise processes are run on unclean / incomplete data (e.g. sales, service, marketing, risk management, compliance, and operations)
· The analytics that customers are able to get are weak because of inconsistencies among existing data sources
· Error-prone integrations result in data repositories that are not reliable.
Unless, IT departments become more pro-active and less risk-averse this will continue be a real challenge for most companies.
With studies showing that requests for personal information deter customers, how can you obtain the greatest amount of CRM data from your online customers?
There are ways around this challenge. Customers will be more willing to share personal information if they are given clear incentives. Ideas include: (a) running campaigns and giving customers points for updating data, and (b) collecting data in increments through each customer interaction. However, more importantly, the personal information can never be abused. I don't mean compromised from a security perspective, that goes without saying, but I mean that just because I agree to be marketed to based on a certain segment criteria, it doesn't mean I want to be bombarded with offers and promotions.
How can you drive standards across your various travel partners to standards - ultimately reducing costs?
The travel industry has a long history of collaboration between trading partners. The industry has been working to develop XML-based standards for key interactions through organizations such as the Open Travel Alliance. As airlines, hotels, car rental companies and global distribution system providers adopt service-oriented architectures and modernize their legacy reservation systems the move to adopt and accept XML-based standards will really gain momentum.
Oracle has been and continues to be a strong proponent of Open Standards and we will continue to push the growth of Open platforms with its investments in Fusion applications and Fusion middleware.
How can CDI (Customer Data Integration) help you provide consistent customer treatment across all consumer touch points irrelevant of channel?
This is the primary objective of Customer Data integration. CDI solutions provide comprehensive functionality to manage customer data over the customer lifecycle from capturing customer data, to cleansing address and spelling, identifying potential duplicates, consolidating duplicates, and enhancing customer profiles with external data, and distributing cleansed customer data to operational systems. Cleansed customer data is stored in a customer data hub that now becomes the centralized source of all customer data that is used to drive existing legacy systems and interactions with trading partners. Through pre-built integration components, CDI takes the complexity out of manual maintenance of clear, accurate customer data. Audit trails allow you to monitor when and how customer data changes.
How can CDI help you understand the customer lifecycle of your customer and increase up-selling and cross-selling opportunities?
The challenge for organisations that have customer data spread across multiple business units or departments and across disparate systems is getting a unified customer view of customer interactions captured across the customer lifecycle. CDI addresses this challenge by creating a unified customer data repository that captures core customer data and customer interactions from multiple source systems. Deep analytics on this data will yield information on customer choices and buying preferences that can then be used to address the desire of the customer.
How do you think travel suppliers and retailers can get both the infrastructure and the consumer-centric "business rules" they need to gain a strong return on their CRM investments? What is key to this?
Building a unified customer repository, analysing the data in the customer repository, and building the consumer-centric "business rules" are all key steps in building a strong CRM ecosystem. Business rule engines can be used to match real-time transactional data such as an airline or hotel reservation with customer profiles, promotions, and product catalogs to identify up-sell and cross-sell opportunities that get presented to the customer at each stage in the customer lifecycle. Travel suppliers can use consumer-centric business rules and consumer demand data to offer targeted promotions. Travel retailers can bundle promotions from their suppliers to offer targeted offers to their consumers. Business process management solutions offer the automated workflows and rules-based processing that is critical in volume intensive and highly competitive industries such as travel.
(This interview is part of CRM Technology for Travel USA 2007 Special. EyeforTravel is scheduled to conduct CRM in Travel USA 2008 Conference at New Orleans on 29 and 30 January 2008.
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