Manuel Hilty, co-founder and chief executive of connected trip building platform Nezasa, sets out the four strategies to address the lack of regularity in consumer interactions in travel
In a recent article looking at the fundamental challenges in travel technology, I outlined five major issues facing the digitalisation of travel:
- Lack of standardisation;
- Lack of regularity;
- A complex and fragmented supply chain;
- The myriad of use cases.
In this article, I’d like to take a closer look at the lack of regularity that we face in travel – or in other words the situation that, as a travel provider, you rarely see your customers doing the same thing end-to-end repeatedly.
As with the other challenges, there is no single solution. We need to tackle this lack of regularity with a number of strategies. Here are a few:
- Cover the entire lifecycle
- Maximise customer touchpoints
- Learn from adjacent areas
- Similarity matching
Cover the entire lifecycle
Trying to cover the entire travel lifecycle (from inspiration over planning and booking to the actual travel, the return and the sharing of the memories) is essentially a no-brainer.
There are many reasons for trying to stay in contact with customers throughout the process.
Dealing with the lack of regularity in travel is only one of them – increasing brand presence, customer loyalty upselling and cross-selling opportunities are also valid reasons.
The longer you stay in contact with your customers, the more you learn about them.
If you manage to stay in touch until their return, you not only see what they are doing during the trip but you might also get their valuable feedback afterwards.
And if you are in touch during the inspiration phase, you learn much more about what they are interested in. There are many players in the industry who are working on this.
From virtual previews/inspiration platforms over travel companions to ways of sharing experiences with other people during and after the trip, there is a wide field of ongoing innovation in this area.
Covering the entire lifecycle has always been a focus topic of our work here at Nezasa.
Maximise customer touchpoints
A major problem for many travel brands is that there can be a lot of time between two interactions (bookings).
This is an issue with respect to getting to know the customer but also in terms of implementing an efficient marketing strategy and increasing customer loyalty.
How should one interact with the customers when they are not thinking about travel? Measures like sending newsletters etc. can help, but not substantially.
Some travel sellers have started to expand into territory that allows for much more frequent consumption, such as Booking Holdings with their acquisition of Open Table.
This acquisition was undoubtedly at least partly driven by a desire to create more frequent consumer touchpoints.
The emergence of the so-called ‘Super Apps’ in Asia also goes in this direction.
If you bundle the availability of travel services with other products and services that have more frequent consumption, then you can stay close to your customers easily and get to know them better.
The overarching question here is whether you can get both a high marketing efficiency and deep customer knowledge as a pure travel provider or whether it will almost be an imperative in the long run to enter closer ties with other verticals such as retail, general e-commerce or gastronomy to get the customer touchpoints you need.
Learn from adjacent areas
This strategy is intricately connected to the one above. Because most people do not travel all the time, we need to get to know them better through other means.
Some cross-references are quite straightforward, those related to activities undertaken at home and while travelling.
Restaurants are prime examples – we visit them both at home and abroad. But there are many other possibilities.
For example, by knowing which books or articles someone reads we might learn about countries and destinations that this person is interested in.
Various companies have started to use social media profiles of customers (where possible and legally permitted) to draw conclusions on their travel preferences.
These examples are just the tip of the iceberg. More work will be done in this area across the industry. Doing this in a smart way can provide a competitive advantage.
Unlike strategies two and three, this is one that pure travel sellers can execute without tapping into other industries.
Essentially, it is about doing what we have known from platforms like Amazon for a long time.
Whenever you look at a product (eg a book) as a consumer, then you get recommendations on what other products customers who looked at the same product considered or booked.
Similarity, matching can be done algorithmically with a considerable effect, but recently it has become quite common to employ machine learning for these types of problems.
In travel, we can apply similarity matching on several levels. One of them is the level of single product, for example hotels.
There are several players in the industry (large hotel focused OTAs or meta search sites as well as tech providers such as bd4travel) who have become very proficient in predicting what hotel someone will be interested in after looking at a few other ones first.
This same principle can be applied to all product types, but it cannot be directly transferred because the data set and the relevant criteria are very different from product type to product type.
The other level is combinations of products. When people are planning more complex types of trips, then they will need recommendations for routes, stops, ways to get from one stop to the other, and the actual travel products to fill into the schedule.
To do this, one needs a lot of structured end-to end itinerary data. Solutions for this are still very much in their infancy compared to single product based solutions, but they will emerge, and it is also one of the areas Nezasa is focused on.
Is there a dominant strategy?
This question is difficult to answer. As mentioned, there is probably not a single solution to address the whole problem.
To me, the big question is how far a travel company can come before bringing strategies two and three into the mix and seeking closer collaborations with other industries.
This will be an interesting area to watch going forward. At Nezasa, we see it as our first task to maximize the output of strategies one and four to make sure we make the most of what we can do within the context of travel.
In any case, the lack of regularity in travel provides ample opportunities for innovation and there will be lots of exciting solutions in the four areas mentioned as well as possibly other approaches emerging in the future.