Airlines must offer a personalised experience or pay the price Monarch did
9 min read
10 October 2017
Using a mere price-point to differentiate airlines will no longer cut it in the search for passenger growth and profitability. It’s time to focus on offering customers a great experience.
It’s fair to say that the airline industry is under intense pressure. With recent news of UK’s Monarch Airlines collapsing – despite a reported 14 per cent passenger increase on the previous year – it’s time to look at how the airline industry can start to take off again.
In recent years, many airlines’ profits have been squeezed by competitive pricing and have been little helped by widespread industry commoditisation; recent research shows that just 22 per cent of people care who they fly with, which should alarm the CEO of any airline.
However, these conditions have created a kind of perfect storm in which airlines can now look to capitalise on – notably improving the overall passenger experience through available technologies. And technological innovation really is key.
Using a mere price-point to differentiate an airline will no longer cut it in the search for passenger growth and profitability. It’s time to focus on offering customers a great experience while at the same time learning how to monetise them.
Offering a more digitally connected, more personal, and generally more modern service is a good place to start for any airline – the process of flying needn’t be laborious.
Everything from online check-ins to pre-booked seats, from onboard WiFi to bring-your-own-device services to connect to entertainment systems or screens – are just a few ways in which airlines can improve a passenger’s overall experience from bad to good. Like all brands, airlines must increase customer engagement in a seamless and human way to avoid adverse effects.
Digital technology plays an increasingly large role in peoples’ daily lives and in-flight customer connectivity can help airlines to provide better, more personalised experiences with a view to turning experiences into profits.
After all, people nowadays are already accustomed to their devices being interconnected – from phones being connected to cars to entertainment systems to home security devices. Who doesn’t want (and to some degree expect) to tune-in to their regular comforts, regardless of altitude?
A decade ago, Virgin America – a “premium-branded, low-cost airline” – launched WiFi on all of its planes, yet still most European airlines are struggling to get there.
This is partly due to cellular accessibility in the US, but regardless, it helped to differentiate the airline from the many humdrum, low-quality in-flight experiences that are still available. It’s an industry ripe for disruption.
Furthermore, being innovative and ambitious with brand partnerships could reap many benefits and fill in the void of often substandard passenger experiences.
It is not unimaginable (and to some degree, it should be expected) that an airline could partner up with a company such as Apple or Google so that passengers could simply enter their user ID into a smartly designed interface and continue as they were. In today’s world, people appreciate convenience and familiarity.
Bringing better connectivity to the skies in a world saturated with digital technology will not be unappreciated by passengers whether regular flyers with legacy or budget airlines.
More than two billion people globally now have smartphones, a figure that continues to increase, putting emphasis on the importance of connectivity whether in Starbucks or the sky.
However, equivocal to popular assumption, budget airlines may be in a stronger position to exploit new technologies, partly because many are not already bogged down (as many legacy airlines are) with old onboard digital infrastructures, and there are now new software and hardware solutions to make possible key digital improvements.
Even small steps could go a long way in the fight for airline loyalty and passenger retention.
British Airways – a legacy airline – now send alerts to passengers’ phones when they reach their gate. It may be a small comfort or consolation to passengers, but it could ultimately result in offsetting passenger’s potentially confusing situation that could have easily be averted through good, user-friendly technology.
Essentially, it shows the customer that they matter — and this is where personalisation can play a crucial part.
Passenger personalisation is the industry’s low-hanging fruit which can help differentiate an airline from its competitors beyond price-point. If passengers can see (or better still, feel) value, then they will more likely invest in a specific brand.
There is a multitude of opportunities in the personalisation field: knowing peoples’ food preferences, allergies, favourite genres of films and music, and it could be the key difference between a customer’s good or bad experience.
Merely holding customers hostage to loyalty cards may become a thing of the past. It certainly feels old hat.
Providing better services, or even new partnerships that allow people can watch, listen or read content at 35,000 feet may prove more differentiating than a simple loyalty scheme. When Virgin America teamed up with Netflix in 2015 it was a radical departure from the status quo.
There are many potential revenue streams that are not currently being exploited, such as partnerships with online retailers, hotels, restaurants, and other services and products that could easily (with smart technology) provide personalised offerings that make a customer feel valued.
BA’s on-board partnership with Marks and Spencer must be lucrative for both parties and isn’t that badly received by customers who can now choose something they want to eat, rather than being handed a sandwich and drink they may not want… granted it’s not ‘free’ anymore, but the quality is certainly better.
Also, crucial to the development of new airline technologies is great design: they should always aim for easy-to-understand, user-friendly ‘holistic’ design that doesn’t require guidance from an overworked cabin crew, airport staff or a needless chat with an airline’s customer service department.
Smart Design created the award-winning personalised in-flight entertainment experience concept, Next. It shows how a personalised platform could work and even build new revenue streams for an airline.
Equally important is that airlines look at what competitors are doing, and furthermore look at successful developments in more varying industries.
After all, technology is a fast-moving world, and it’s always important to spot success and ask: “How did they make it happen?”; “What can we learn from that experience?” – and “How can we improve that experience or adapt it to our own business model?”. Otherwise, there’s a risk of becoming stagnant and customers seldom react well to stagnation.
To stay on top in a fast-moving world means being open to ideas, and sometimes requires building on best available or known practices.
Of course, installation costs for new, well-designed and connected onboard systems, will come at a cost to airlines, but if smart investments aren’t made and customers don’t get what they want or what they feel they deserve – then airlines may risk the same fate as the UK’s Monarch Airlines which has been devastating for many.
Heather Martin is VP of design at Smart Design[rb_inline_related]