Digital Customer Experience in the Travel Industry
A chat with Insider’s Managing Director in MENA, Muhammed Yildirim.
Where do you see the travel industry in MENA’s eCommerce ecosystem?
What I observe in the big picture in MENA region from working with a number of online travel agencies is that, here there are two leading big industries, prevalent in both offline and online and these are travel and finance. eTravel industry is growing at a speed averaging at 50%, which is a bigger growth than what we observe even in the eCommerce industry. Currently, online travel agencies dominate a major part of the whole travel industry and they are expected to change the rules of the game in the near future. OTAs pace of revenue growth is also averaging at a higher percentage compared to the revenue generated by the airlines.
They call it “The Age of the Customer”. How does this motto apply to the travel industry? In MENA, how important is the digital customer experience in the travel industry?
Dynamics of all sectors are changing. Online customers are becoming more powerful than ever before. All airline websites and online travel agencies are taking precautions to cope up with the evolving dynamics of the game. One of the biggest challenges of travel industry is customer loyalty. This is exactly why online travel businesses should adjust accordingly. First of all, travel websites and apps should be available for all devices. Mobile experience is the key factor defining a travel business’ success.
If we talk specifically about the region, MENA is home to a variety of cultures. Customers from different cultures have divergent demands, habits and income levels. It is significant to segment these customers precisely and address them accordingly.
It is also one of the key tourist destinations. MENA have the most important airline companies, tremendous hotels and many upcoming projects. But still I don’t find the whole leisure industry efficiently innovative. All travel and leisure companies are working on old fashioned marketing principles. I expect these industries to survive the fierce competition and become a trendsetter in shaping the future of customer experience. Especially for the hotels, there is so much room for improvement. Almost all their bookings are completed via booking.com, which highly increases acquisition costs.
Insider is a software product company. Can you quickly explain the functionality of your products and how you help e-businesses?
Our product addresses major pains of digital marketers across sectors, mainly retail, media, travel, finance and e-gaming. Insider’s technology helps them optimize marketing spend besides increasing conversions and revenue. It helps marketers deliver hyper-targeted campaigns on web, mobile web and apps by leveraging advanced predictive segmentation capabilities and it provides all the tools digital marketers need to deliver personalized experiences from a unified platform. We basically work with big data to be able to understand all visitors, then group them into ready to use segments and release various personalization scenarios according to our partners’ specific needs. We do web personalization, mobile personalization, work with predictive modelling and predictive segmentation technologies and leverage A/B/n Testing.
We believe you have quite a number of partners from the travel and leisure vertical here in Insider’s MENA office. What is a common challenge they all face?
The major problem here is that while mobile traffic drastically increases, conversion rates from mobile platforms don’t perform as well. The reason is that most customers search through mobile but complete their transactions on web. That’s why as Insider, we put great importance on data unification. A platform should be capable of restoring visitor’s mobile data across digital touchpoints and communicate to them accordingly on web, mobile web and apps.
MENA is a region with very high mobile penetration. In align with this status, more effort should be invested in mobile experiences. I think this is is highly neglected by businesses. Even the biggest companies offer poor mobile experiences or they are not available in mobile at all.
Online transactions are still a big problem, not only in the travel industry but in eCommerce as well. Still most of the payments are completed offline. This is another aspect that needs to be improved.
As Insider’s Managing Director in MENA, can you share the insights that you gained from working with partners in eTravel industry?
As I pointed out above, my ultimate observation is that old-fashioned approaches to these industries don’t work anymore. I was deeply involved in the travel industry when I worked in Turkey. But customer profiles here in MENA are much more divergent. While offering 3 kgs of free baggage is very motivating for some, some of the customers only expect to be offered food on the plane. That’s why they should be offered different digital experiences as well. It is at least what we learnt here as the Insider MENA team.
Another point we observed is the necessity of becoming omni-channel. Demographically, this is a very complex region. As an example, Saudi is a totally unique region and requires unique know-how. The principles we apply here in UAE does not work in Saudi. To stand out in the MENA region, all businesses must become omni-channel and be available on all platforms.
Although not specific to this region, another challenge is the segmentation of visitors. Understanding all customers with their specific needs and demands is always crucial. Business people, tourists and expats are some of the major customers in the travel industry here. For a travel company to treat these customers in the same way is the worst thing they can do for their customer relationships.
How do your products address the common challenges of eTravel industry? What kind of personalization tools do you offer?
All the challenges I mentioned above comes down to the issue of accurate segmentation, accurate discovery and eventually accurate delivery. Insider is very experienced and proficient in segmentation. Also Insider engineering can apply this to all channels and platforms. Especially recently with the predictive suite we’ve launched, now we’re able to create predictive segments. Predictive segments allow businesses to predict a visitor’s likelihood to purchase score to offer real time personalizations via email, web, mobile web, web push notifications or remarketing ads and so on.
eTravel is an industry where we observe high competition. What do you specifically do to improve customer loyalty?
There is this true story that I always use as a metaphor. The Airline Deregulation Act of 1978 has opened up the transportation system to be a competitive market to set the quality, variety and price of air services. The act leaves all airline companies in a state of crisis. Exposure to competition led to heavy losses and conflicts with labor unions for a number of carriers. Between 1978 and mid-2001, nine major carriers (including Eastern, Midway, Braniff, Pan Am, Continental, America West Airlines, Northwest Airlines, and TWA) and more than 100 smaller airlines went bankrupt or were liquidated—including most of the dozens of new airlines founded in the aftermath of the deregulation period. What happened goes like this, People Express examines the behaviour of their previous customers and sets a minimum price range and applies it to all customers.
The only airlines company which survived this crisis was American Airlines since they examined the past behaviour of their customers and predicted their income level. According to each customer's income, the airlines applied a predicted price for every individual and managed to be the only airline company which managed to survive the crisis.
2016 has faced a similar phase in the eCommerce space. This is exactly why, as all online businesses, we should learn how to identify all visitors individually and treat them accordingly.
What kind of innovations are ahead in the customer experience space for the travel industry?
There is a lot of innovation to come but I believe, theoretically it all starts with understanding the power and expectations of the customer. This era is called the age of the customer because, they are more compelling and demanding than ever before, both in online and offline spaces. The key move in the customer experience delivery space is to develop a holistic understanding of the customers and bring them closer to marketers. To talk specifically about the travel and leisure industries, we can examine the example of “booking”. Booking used to be a single action however, through evolving customer expectations, it has become a process by itself. Once a customer books a ticket, now they’re offered a hotel booking, suggested places to visit in the destination, they’re emailed by the hotel, they’re contacted through the phone. When they arrive they’re welcomed with their names and met with a small surprise in their room. This is the process of the booking as it is supposed to work these days. Now delivering the customer experience on digital platforms is not enough, rather customers expect customer journey experience. As Insider team, working on our omni-channel marketing strategies and predictive technologies, we’re proudly evolving to be a customer journey experience delivery platform.