Giants such as Uber and Booking.com have moved towards outcome-based business models as part of its digital transformation plans. Rich Logan, digital strategist of MMT, argues for others to follow suit
Guest Post: How can the travel industry take off with digital transformation?
It has been a good couple of decades since travel brands began to ride the dot-com wave of the early Noughties, shifting customers online as high-street agents took a hit.
The debate over where travel companies’ ‘shop front’ should sit - in town centres or high up on search engines - has raged ever since. But what’s going on digitally behind the scenes?
It’s fair to say the sector has complex digital needs. There are many moving parts to a package holiday or bespoke trip; that doesn’t even factor in the specialist corporate sector. Each customer journey has very distinct stages, from research and booking, to pre-trip admin and inspiration; the trip and stay; and post-travel opportunities to contact the customer, gather feedback and make offers.
Against this complex backdrop, travel companies can be uncertain about how to drive clear value for the brand’s customers. To solve this problem, it can be best to think about the end of the journey first.
Travel brands add jet power with outcomes-based thinking
From transportation and accommodation providers to agencies and tourism services the travel industry is vast. But for many customers these services and products are often siloed. Equally, putting together an ideal package can be arduous, time consuming and expensive.
Thinking about additional services, providing ancillary products or improving certain delivery aspects like websites, deploying landing pages and a friendly UX can seem daunting and perhaps not worth the effort. But we all know customers are looking for more than just a simple product or service. They want a personalised and seamless experience that meets their unique needs and preferences.
Companies can thrive if they develop and implement a fully-fledged Outcome-based Business Model (OBM) as part of their digital transformation strategy. This is fairly new terminology, but is set to be a big deal across the commercial world.
OBM is a framework that focuses on desired outcomes, rather than specific outputs. It is an approach that aligns an organisation's strategic goals and is focused on delivering value to the end user. It helps businesses prioritise what they do, when, and how.
This aspect of digital transformation means having a different mindset. When tech hums along mopping up mundane tasks, we can turn our attention to answering higher-purpose, outcome-focused questions about the business model, including:
- What do you really want to achieve as an organisation?
- How do you want customers to feel, rather than fretting about what you want them to do?
- Can technology underpin better customer relationships?
- In an ideal world, what would your business be famous for?
Booking.com and Uber join the OBM bandwagon
OBM is about having a positive vision for change but with measurable outcomes. It should also underpin a culture of continuous learning, with workforces trained to feel comfortable with technology, and to get the best from it.
Through an OBM, travel brands - whether vaunted institutions or start-ups - can innovate and deliver unique travel experiences, maintaining and growing brand affinity and loyalty.
The rise of digital has dramatically disrupted the industry and there are now countless players that are able to offer efficiency as well as a multitude of products and services from one platform by applying OBM thinking. Examples that spring to mind are Booking.com and Uber.
Booking.com not only provides users with a place to stay, it also incorporates car rental, flights and attractions. It is a time and cost saver for those who like convenience and the ability to plan their trips in advance.
Uber, meanwhile, doesn’t just offer taxi rides, it has incorporated train and coach bookings onto its platform. It prioritises convenience and safety for customers, by using technology to simplify and streamline the transportation process. Customers appreciate having these flexible options available in one place on a platform they can use with ease and at a time of their choosing.
By using an OBM model, these brands are continually scrutinising the data at their disposal to discern what customers want, search for, and buy when on their sites; and identify ways they can bridge that gap to keep eyes on their pages. With these insights they can add products or services, keeping customers happy and excited to book the services they want.
Get on board with OBM approaches for success
OBM strategy fuels digitalisation to deliver value to end users, and even exceed their expectations.
As technology continues to evolve at a rapid pace, shaping a resilient digital transformation strategy with OBM can offer many benefits. In the current economic climate, it enables businesses to work more efficiently in a competitive marketplace - because the approach helps them prioritise what they do, when they do it, and how they do it.
This can start with identifying and measuring the outcomes that customers are looking for, such as convenience, safety, affordability or sustainability. Making these decisions requires gathering and analysing customer data, and using the resulting insights to inform product and service development.
Travel decision-makers should also consider partnering with other third parties and technology providers to deliver outcomes that are beyond their core competencies. For example, a hotel chain can partner with local tour operators to offer unique and authentic travel experiences to customers.
Another example could be using automation to deliver added value for guests. This could include recommendations to local restaurants and bars - especially if those services aren’t already offered - through to events and entertainment suggestions.
Having outcomes in mind at all times brings structure and efficiency to digital transformations strategies, and can make travel brands fly. After all, if you give a travelling customer a great experience they are more likely to embark again and again.