Ai Editorial: Disparate databases not really a big hurdle in starting data-driven FFPs

First published on 10^th June, 2016

Ai Editorial: Implementing data-driven technology can be a complex issue in case of dozens of databases. However, not all of the databases might be relevant to implement first steps, writes Ai’s Ritesh Gupta

I recently interacted with a couple of senior executives, one associated with a full service airline and the other one with a LCC, to gauge areas where airline loyalty programs can improve.

A common point of discussion with both these executives was being astute with the available data, and working on the requisite infrastructure to make the most of it. A common theme was managing data, to be precise what and how to manage, and achieving results. Here we focus on both the aspects -  

1.    Managing databases – focus on relevancy

Talking of managing databases internally, the FSC’s executive acknowledged that the number of disparate data sources is over 75. The relevant data is available. But these databases  “are not yet talking to each other”. In terms of progress, a team has been established to address the issue.

Implementing data-driven technology and business rules might indeed get quite complex in case of dozens of databases, says a source.

“However, not all of the databases might be relevant to implement first steps towards data-driven technology. (For instance, for distribution) the majority of the important information is most likely stored in the PSS, the CRM and might be enhanced with certain other sources. You probably won’t need to connect all available databases together,” explained the source. As for how an airline approaches areas like digitalization is not necessarily the type of carrier they are. “The main difference on how quick airlines are moving towards digitalization or data-driven FFPs is more the internal mindset from what we’ve seen in the past. Airlines that have achieved to implement a mindset that’s open for change and innovation are moving faster than airlines that don’t support or even force innovation that much. Ryanair, for example, has established a dedicated innovation lab to drive and push change towards digitalization and to be able to keep up or even ahead of the competition. Other airlines don’t have this mentality and focus more on stabilizing the systems rather than changing them. A key element here is iterative development, one that indicates gradual progress.”

Talking about FFPs, the LCC executive I spoke to mentioned that for as long as each department has their own databases and there is no push for a unified or central datawarehouse, “there will be loads of customer data within the organization”.

Another source added, “A regional low cost carrier in Asia began its loyalty program with multiple types of membership - paid membership with basic loyalty card, paid membership with a prepaid card, free virtual membership (card-less). The membership with the financial product naturally resided with the financial service provider! Internal database simply is a collection of data regarding information on market and consumer behaviour. So yes, there will be many of these databases within an organization. The task for CRM would be to consolidate all this data throughout the organization and use this to analyse, segment and connect with customers accordingly).”

Carriers are now looking at a modern CRM platform framework that enables the integration of all relevant operational systems.

A carrier in Europe is working on one such initiative. This carrier currently only offers a booking based login for their customers. They don’t have a customer profile, as a customer I’m not able to see an overview of all my bookings. As a consequence, the airline has no transparency on the customer. The new CRM platform will create customer profiles based on historical data, but also enhanced with data that the customer is willing to add. The customer service will have access on this information, so if the customer calls the call-centre, they have transparency on his profile. The possible ways to enhance this initial CRM platform will be to integrate the pricing engine as well, so that the airline will be able to first identify the customer within the booking flow and then react on booking requests by offering him a unique and personalized flight-package. “This solution is currently still a concept and not implemented, but that’s the direction where the journey will lead to,” shared a source.

Key points to consider:

-       Not all of the databases might be relevant to implement first steps towards data-driven technology.

-       Identify all relevant operational systems, and look at optimal ways to integrate them.

-       There is also a need to explore other sources of data. Data your partners hold may be the missing link in your marketing chain.

-       Treat each new data source individually and focus on formatting and structuring it so there are constant updates and that it remains accurate.  By then focusing on commercializing individual data points one at a time – FFPs can build out their marketing platform in baby steps.

2.    Serving the FFP member better

The bar has been raised considerably when we talk of delighting a customer.

One would expect to be able to receive relevant offers, either based on information one has shared with the airlines or from understanding of my transactions / behavior pattern. “As a traveller, I would be pleasantly surprised if the airline used this information to connect with me. It would certainly hit the right chord with me,” shared the LCC executive. But this isn’t happening at large when it comes to “personalisation to individual needs”. He added, “Airlines have so much data available to address individual needs, but yet they usually blast offers to all customers in newsletters, apps, social media etc.”

Also, it is still challenging for airlines to act on real-time operational data to improve upon their FFPs. “At the moment it is very challenging but in the future we are going to address exactly this point, which will help us to differentiate us from competitors and enrich our customers journey, which should result is loyalty beyond the classical FFPs,” share the FSC executive.

Nod from senior management

The LCC executive pointed out that the “push must come from the top to consolidate and merge all data available within the organization, into a single datawarehouse, for better engagement and eventually better customer experience”.

“From experience, the biggest challenge would be to get the internal buy-in, from the various departments, on why a consolidated, single view of the customer would be better for the organization and in the long-term, reap the benefits of a highly engaged and loyal customer),” added the executive.

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