If airlines want to remain profitable and grow their businesses they must develop a customer-centric marketing strategy based on four key pillars, according to a senior executive from the US.
Kendall Ramirez, the director of digital marketing at US-based Southwest Airlines, was speaking to delegates at the Amadeus Airline Digital Conference in Madrid about the low-cost carrier’s journey towards an entirely holistic customer-marketing platform.
At the core of her business plan is the development of a central data warehouse that pulls all customer information from multiple sources.
She advised delegates to choose technology that allows data to be flexible and accessible in real time to stakeholders across the business.
The third strand involves the reorganisation of decision-making processes so they are based on customer-centric goals.
She admitted this was often challenging for Southwest because “low cost and customer-centric goals are not often the same thing”.
Finally, an airline must evaluate the way it intends to communicate with consumers and deliver its vision of the customer experience in an accurate and relevant manner.
“Once you’ve built these four things, you’ll generate more revenue,” she assured delegates.
“Five to 10 years ago we were at the beginning of the cycle. There was only one message sent out to everyone.
“Then five years later we could do some basic customer segmentation.
"Now we can be far more personalised and programmatic, possibly automated. But we are not at the final block yet.
“We need to be able to use this across channels; the [airport] kiosk, website, mobile website, and so on. Hopefully in three years it’ll be all holistic.”
Ramirez said Southwest was still in the process of building the four pillars, and was learning everyday about new systems and processes.
However, she said the airline had already started to mine its own data and created an algorithm engine to personalise offers across the US.
In an AB test late last year the airline increased its total revenue by 0.2% following an email campaign that generated an offer based upon the customer's location, booking history and other factors.
“It may not sound like a lot, but 0.2% on our volume is a big number,” she insisted.
Earlier this year Southwest launched one of its click-and-save campaigns, which offer cheap flight deals to the 20 million customers on its database.
The promotion was a nationwide sale of $69 tickets. Of those targeted, the marketing team pulled a list of customers who had been on the website in the previous seven days to look at fares on a specific route but without buying tickets. Half the list was given the standard offer, the other was sent the same price but with it marketed on the same route they had recently checked on the website.
“There was a ten-fold increase in conversions among those who received the standard offer. The half that received the exact route went up 13 times. It just shows how you can use your database and behavioural data from the website to be more effective,” she said.
Southwest, which is considered by many industry figures to be among the most innovative carriers in this field, is still trialing a number of initiatives.
Customers, for example, who purchase onboard Wi-Fi are being given an automatic refund if the airline’s technology detects an issue with coverage during a flight.