Over the past 18 months, more and more companies have embraced digital transformation. McKinsey found that “companies have accelerated the digitisation of their customer and supply-chain interactions and their internal operations by three to four years” as a direct result of Covid-19. And with this comes a whole lot of data.
Globally, it’s predicted that the international ‘datasphere’ (the collective amount of data) will increase to 175 zettabytes by 2025 – that’s 175 trillion gigabytes of digital information. It took until 2016 for global internet traffic to reach 1 zettabyte, so in less than a decade usage has increased by 17,400%.
It’s clear that travel companies now have more data at their fingertips than ever before. Now, the question is what to do with it …
Why is data valuable?
The right data gives you a window into the minds of your customers or target audience. Travel companies can now access information on everything from transactions to flight paths to check-ins to travel habits.
What’s more, this data has been willingly shared by customers with their holiday provider or work trip facilitator, meaning these companies can analyse and use this precious resource. In the age of enhanced data security, that’s incredibly valuable. But why is it so important to understand the data produced by your customers and those of the wider travel sector?
Here are just a handful of reasons:
- Understand customer buying habits, from preferential flight times to most popular destinations
- Analyse how people check-in and take steps to make it even easier
- Identify and remove common points of friction throughout both the purchase and travelling experience
- Make strategic decisions about how you advertise to customers to increase your likelihood of conversion
- Gain insight into the activities of competitors
We could go on all day, but you’ve probably got the idea by now that data is incredibly valuable. By learning and understanding what makes your customers tick, you can increase both sales and satisfaction simultaneously. If your customers feel like you genuinely care about what they want and your revenue is going up, you’ve got yourself a win-win scenario.
How much data should travel companies process?
The phenomenal volume of data that’s now available poses a question of its own: how much is too much? You might think that, surely, you can’t have too much of a good thing. The answer will depend on your business.
Multinational travel giants are likely to be dealing with ‘big data’ – enormous data sets that are so large, rapidly updated or varied that advanced machine learning is required to make sense of them. And to turn the data produced by millions of customers every year into something that can inform future decisions, these companies will need to invest in some serious data processors.
Even smaller companies will now have lots of data that’s available for them to analyse. It spans every area from marketing to sales to customer service. But if a smaller team or budget limits your capacity, it’s best to pick and choose the most relevant categories. For instance, if you’re keen to understand trends within customer buying habits, your data analysis efforts will be best used in this area.
Not sure where to start? Here are two key areas of data we think you should focus on.
Using data for reputation management
One of the most important ways to use data is to keep customers happy and ensure you’re not unaware of an issue that causes a mass customer exodus. Using tools like customer satisfaction surveys and chatbots will help you gather data quickly and efficiently. In turn, you can use this information to address issues you may not otherwise had sight of.
For example, let’s say you run a small travel agency business. You’ve built good relationships with hoteliers across many regions, but you want to understand which are boosting your brand and which are holding you back.
Data can help you:
- Identify potential brand champions and encourage them to spread the word about your business
- Take steps to resolve the concerns of ‘detractors’ – people who feel negatively about your brand and could spread the word in a bad way
- Understand how effective your customer service strategies are
- Adjust your packages to better cater to customer demands
- Understand which partner hotels are popular and which are inflicting damage on your reputation
Using data to optimise price
It’s nearly impossible to optimise your price points to appeal to what customers want without data. Without concrete evidence to inform your decisions, you’ll be fighting a losing battle. According to Hubspot, price optimisation depends on a large number of factors, including:
- Customer survey and behaviour data
- Information about demographics
- Geographical market specifics
- Historic sales data
- Operating costs
- Inventories
- How high or low demand is
- Competitive advantages and concerns
- Lifetime value and churn data
Rather than relying on manual insights to determine your prices, switching to a data-led machine learning option can help you effectively optimise your cost menu. The longer it analyses information from your customers, the more accurate it will become at finding a pricing sweet spot. As a result, your customers will feel like they’re getting a fair deal, and you’ll enjoy a healthy profit margin at the same time.
Not sure how to use data to optimise your travel business? We can help you implement tech-based solutions to capture more of this precious information.