By Simon Farthing, head of consultancy at Profusion
I’m pretty sure that everyone has been asked at some point in their life the question, ‘what is your favourite band?’ Depending on who is asking, you’re likely to tweak the answer.
With close friends or family, you can be honest – ‘it’s Taylor Swift’. On a first date, maybe you want to seem a little edgier – ‘it’s Jay Z’. At a new job, maybe you want to fly under the radar and pick something inoffensive – ‘the Kaiser Chiefs’. For the cool friend of a friend who owns an independent record shop – ‘it’s The Smiths’.
Of course, many people aren’t actually sure who their favourite band is.
The same is true for a lot of other ‘preferences’ we declare. If asked what’s my favourite type of holiday, I can say I prefer a beach holiday but it may be the only type of holiday I’ve had.
I might actually like skiing holidays just as much, but when I was asked the question my choice was skewed because it was cold and dark outside.
This divergence between what people say they prefer and what they actually want is a problem for marketing departments at every holiday company or travel agent.
Declared consumer preferences from, for example, surveys rely on people knowing what they want and being honest. The results aren’t dynamic, they don’t take into the fickle nature of preferences.
Consequently, even accurate data can soon be out of date. This makes targeting marketing or services to consumers essentially pot luck.
Data science can completely change this picture. By analysing seemingly disparate data sets, the ‘inferred preferences’ of consumers can be uncovered and marketing efforts tailored accordingly.
Inferred preferences can be deduced from a number of indicators.
Broadly, if you identify that a consumer is buying sunglasses, shorts and flip flops, it’s not a big leap to say that there’s a good chance they have a trip somewhere warm planned. Of course, that’s not necessarily a red flag that they love beach holidays.
However, if you marry this information with, for example, social media interactions that mention a strong interest in going somewhere hot, or Instagram ‘likes’ of pictures of hot countries, you can build up a much more accurate picture.
This is just the tip of the iceberg, by adding in browsing habits, demographics, location and spending habits, you can start to get to know each consumer on a personal level.
Crucially, the information you gleam from each individual is dynamic, it can adjust in real time as new information is analysed.
Of course, gathering information, analysing it and identifying the inferred preferences of your customers is just half of the story. Choosing how to interact with these customers is just as important.
Data science can also help work out the best way to target marketing efforts, tailor customer service and generally improve engagement with existing and potential customers.
By marrying the inferred preferences of customers with information that indicates how they like businesses to communicate with them and, for example, what type of offers or services they would like to be offered, a highly effective marketing and customer service function will be created.
To fully leverage the power of data science, holiday companies need to invest in the appropriate technology and expertise. This means that the internal data the company gathers on their customers needs to be fully collated, regularly updated and accessible.
Next, data scientists need to be brought in to analyse this data and link it to other data sets.
Finally, this information needs to be visualised in such a way that the marketing and customer service departments can understand and adapt their approach.
All of this can be undertaken by building out an internal data science department or engaging a third party.
It’s no secret consumers that demand more from businesses. Increasingly, people expect to receive a highly personalised level of service and to only receive information or ads that are relevant to them.
By using data science, holiday companies can conceivably get to know their customers better than they know themselves.
TThe result is a highly targeted and affective marketing and customer service, which increases sales and improves customer satisfaction.