16th November, 2020
Interview with Paul Alexander, Group Chief Executive, Beyond Analysis
How is travel-related spending intent shaping up? What can trigger a transaction in a specific category? How to identify high value customer segments?
The role of data science in making a meaningful contribution at this juncture is being scrutinized.
Ai’s Ritesh Gupta interacted with Paul Alexander, Group Chief Executive, Beyond Analysis about the same. Excerpts:
Ai: How have your interactions with airlines shaped up during the pandemic? How do you think data can play its part at this critical juncture?
Paul Alexander: Based on companies we interact with, I think we can divide airlines in to two distinct camps.
Ai: Airlines’ main focus right now is on capturing demand and taking as many bookings as possible. What role can data analytics play in revenue generation, be it via their core product, air ancillaries, non-air ancillaries etc.?
Paul Alexander: Focus on bookings is key and is the right thing to do, particularly when there is so much pent-up demand in the marketplace. As restrictions lift, airlines need to be perfectly positioned to grab that demand which will soar, and then decline back down to ‘normal’ levels (whatever the new normal is going to be). However, equally important is ensuring that delivering to pent-up demand when it is unleashed doesn’t impact upon customer experience.
We operate across multiple sectors, and we have seen instances of where retailers (for example) whose businesses have soared after retail has reopened, but they have failed to service the increased demand. Now, more than ever, the data needs to be joined up to understand the customer from core transaction/ booking systems, their interaction with ancillaries (non-air and air), customer feedback surveys, web interaction. Generating bookings at any cost will be good for short-term results, but beware long-term reputation damage if you can’t handle the work.
Ai: What should they focus on when it comes to sustaining spend from existing base of customers from their respective FFPs/ co-brand credit card relationships?
Paul Alexander: ‘Sustaining spend from an existing base’ is different to ‘sustaining spend from your best customers’, and whether it’s revenue, profit, or both, I’d argue. Taking a snapshot of the most valuable customers before COVID and looking at how they are interacting now and how to engage them. As restrictions lift, how to find more of those customers, rather than all customers will be key.
Ai: “A customer spending $1000 via a merchant’s co-brand partner relationship is spending $5000 with competition. What would you do differently as a result of that knowledge?" Beyond Analysis recommends in understanding a consumer and delivering the most relevant proposition. How airlines can focus on this?
Paul Alexander: Most businesses know what their customers are doing these days. But… what aren’t those customers doing but should be, particularly if you perceive them to be loyal?
I use the example of someone who heads in to a DIY store to buy tiles, but not the grout to stick them to a wall. We know they need to get the grout somewhere, so what’s wrong with our proposition – the price, or the quality of the product? It’s time the airline industry started more extensively using data to understand the scale of the lost opportunity. I fly from London to Sydney with my favorite airline, and two weeks later fly from London to Paris with the same airline. How did I get back from Sydney? Why didn’t I choose my favourite airline? Was it price, schedule, capacity…? Industries who fail spend too much time looking at the ‘false positives’ the people who did do something, the people who didn’t but should have done are key to unlocking growth.
Ai: What’s your recommendation to airlines when it comes to capitalizing on data – for both the short-term and medium term?
Paul Alexander: Work within your leadership team and your experienced data partners to prioritise the activities you collectively think will make a positive difference to results. Use data to confirm which activities are actually going to make a positive difference if you can execute. Execute those activities fast. Rinse and repeat.
Paul spoke at the recently conducted Ai’s Co-brand & Travel Reward Cards Virtual Conference 2020.