Guest Post: How predictive analytics can make sure you are one step ahead of your customers

Travel marketing can be highly intuitive, mostly because people’s travel habits are quite predictable: couples want holidays for couples and family holidaymakers look for family packages.

By Jason Lark, managing director of Celerity

Travel marketing can be highly intuitive, mostly because people’s travel habits are quite predictable: couples want holidays for couples and family holidaymakers look for family packages. People also tend to travel around the same time every year.

That said, simply toeing the line and offering a generic range of products to meet the needs of general customer segments during peak season will not keep you ahead of the competition.

Travel customers struggle to differentiate between brands as it is, so to stand out in an increasingly crowded marketplace you need to get smart with both your product offering and marketing.

Properly understanding your customers is the first step to devising and delivering a winning marketing strategy.

This can be achieved by bringing all of your customer information into one streamlined database for a Single Customer View (SCV). The SCV gives you an overview of an individuals buying behaviour and preferences, revealing how they engage with your brand and make purchases.

You can even use this information to predict their next move – the essence of propensity modelling. Propensity modelling, or predictive analytics is a really clever way to give your business an edge on rivals, helping to increase bookings and revenue through improved cross-sales and ancillary sales.

Propensity modelling isn’t new, yet many marketers use it badly or not at all. Some make the mistake of approaching it solely from a lead requirement angle – using predictive analytics to work out how to satisfy occupancy or fulfil passenger quotas as quickly as possible.

Being able to identify customers that need your service when you want to make up the numbers is achievable and useful, but the real returns come in understanding a customer’s optimum lifetime value to the business.

Make the next move

Customers want brands to understand their values and cater to them, and the travel sector has access to rich data that enables it to do this really well.

You can look at customer information throughout the entire sales cycle, from their initial browsing behaviour through to granular detail on an individual and their holiday preferences, to deliver highly targeted cross-channel communications for maximum ROI.

Propensity modelling can help you identify the type of destination a customer wants and promote it, whether returning to a resort they know and love or going somewhere new.

By making strong product recommendations to that unique traveller you won’t overwhelm them with too much choice and can instead influence their decision-making.

AA large travel company we worked with used propensity modelling to increase the number of early bookings and profitability by 5-10% in just 18 months, simply by condensing its travel brochure from hundreds of destination options down to around half a dozen. Most customers appreciate these informed suggestions.

Up the ante

Cultivating more profitable relationships with customers is made easier through predictive analytics, but isn’t always straightforward for the operator.

While the cost of a package holiday may feel like a lot of money for a customer, it still may not be profitable for the travel provider unless ancillary purchases up the overall spend.

Predictive analytics can be used to understand the types of add-ons a customer typically buys, for example, extra leg room or pre-ordered inflight meals. By looking at previous customer behaviour you can make assumptions about they’ll do next and tailor your marketing to maximise returns.

But marketers must remember to take a balanced approach. Travel is extremely aspirational; marketing products that are beyond the customer’s means can result in an unenjoyable experience leading to discontent with your brand.

Getting it right

Get the marketing right and you’re on to a winner, get it wrong and you’re in hot water. Apply your common sense: customers don’t welcome barrages of intrusive communication from brands.

Travel companies have an advantage of typically being able to trust customer data and it’s in their interest to deliver outstanding service and wonderful holiday experiences.

Stop relying on the customer’s self-discovery and use the information you already have to drive sales – good propensity modelling can turn happy customers into lifelong customers.