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by Jack Miller on 24 May 2016

If I can easily book my stay on Airbnb and choose my flights on SkyScanner, why should I pay someone to do it?

DIY Travel Sector
DIY Travel Sector

As apps make planning, booking and managing travel simpler, a key question in the travel industry is how to continue to add value and compete as self-serve holiday booking gets more convenient every day. If I can easily book my stay on Airbnb and choose my flights on SkyScanner, why should I pay someone to do it?

Fortunately, just as consumer facing technology is making DIY holiday booking easier, new Software-as-a-Service apps give travel organisations the chance to compete more effectively as well.

Harnessing the power of the latest developments can help in a number of ways, but for this post I’m going to focus on 3 core strategies based on a single use of technology. Furthermore, it’s a technology that takes a matter of hours rather than weeks or months to implement.

Scale of travel sector disruption

1.) Know your strengths and weaknesses in the eyes of your customers at all times

And when I say know, I mean really know. Let me ask you a question. Can you list the top 3 reasons why your customers would recommend you to their friends over the last 4 weeks?

Note — I’m not talking about the small section of your customers who have contacted your help desk, or those who have so much time on their hands that they would happily take 12 minutes to fill in a survey. I mean across all customers and at all stages of their journey interacting with your organisation.

What about the top 3 reasons why they wouldn’t recommend you?

A lack of genuine understanding at this level means many organisations are left competing on the same thing, something like:

*“We’re experts in travel, we offer great service” *

Whilst expertise and service are important to the customer, they are only an advantage to you if your customers actively believe them to be true. Really understanding your customers allows you to drill down to understand why they use you and where your point of difference lies in their eyes. This is where your competitive advantage lies.

Here is an interesting example from our recent analysis. Looking at the data for a well known travel search company who undoubtedly competes primarily on price and ease of use (and the data backs this up). The 3rd most stated reason for people to use / promote the site to their friends was the inspirational content articles that they run on their website.

“I would recommend your company to my friends. I love the informative articles such as cheap places to visit such as Vietnam and Cambodia. I would love to go there one day”

This is not me saying that great content is the next big thing in travel (although it’s always useful) but rather a significant number of people who continue to use that app (and who recommend it to their friends) are doing so on the basis of this content, not the qualities of the product itself. Again, not everyone can compete on great content. This is rather to say that in an increasingly competitive space it is crucial to understand the specific mixture of reasons that motivate your customers to choose you.

Furthermore you need to understand this at all times. In today’s world what your customers think evolves constantly. Not just in response to the improvements that you make, but also in the face of external factors such as what the competition are doing or the launch of the latest app. Fortunately this is something which technology now makes remarkably simple.

As soon as it became possible to understand what your customers are experiencing on a weekly or even daily basis, companies began to use it to gain a competitive advantage (Airbnb are a great example here). In order to compete, simply gaining a snapshot of customer sentiment once a year or even once a quarter just isn’t enough. A quarterly survey only tells you the problems your customers faced on their holidays 3–6 months ago. Is doing something about it now really going to win them around? In reality you’ve already lost them.

The first strategy is therefore to know why your customers use you at all times and understand how what you are doing (or not doing) is impacting that every day. You can then focus on doing the things that they value, enhancing your strengths and nullifying your weaknesses (N.B. for organisations that are doing this well, ‘customers’ in this context means anyone who has a meaningful interaction with their brand, whether they go on to use them or not). Finally, you can use the knowledge to find more customers who value those same aspects of the overall experience.

A question that is often asked by companies improving their customer experience is “Are the changes we are making working?” With a constant view of what customers think, you’ll know. If you see the customer’s perceptions changing, it’s working!

2.) Prioritise what you should focus on, based on what your customers think

Once you know what your customers think, you can start to identify which are the areas you should focus on to give yourself a competitive advantage.

Let’s take an example from our recent analysis on the travel industry. As would be expected, the data shows that customer sentiment attached to refunds is overwhelmingly negative. Of course the usual rules apply in terms of keeping customers happy (i.e. if possible, stop doing something that is making them unhappy). However, drilling down into the data, it’s interesting to see that a lot of the negative sentiment comes from the perception that the companies in question are profiting in an underhand manner by not refunding money for 7 days. This causes resentment which is reflected in the negativity of the sentiment that the customer holds towards the organisation. > > “…they have held my money for over a week having sold us a product that doesn’t exist and then pocketing the interest from my money. They are clearly in breach of contract and crooked with other people’s money. I’ll never use them again and will advise my friends not to either”

It’s worth remembering at this point that whether something is true or not is less important, what is important is the customer’s perception of the situation.

There are, of course, different ways to tackle the negative impact of refunds but interestingly it’s likely that changing customer perception of the transparency of an organisation would help to solve this issue. In this example, this could even be as simple as including a reason that resonates with the customer as to why the money takes 7 days to be returned.

To be competitive however, simply solving problems that the customer experiences is only the first step. Any problem also represents a massive opportunity. Again this can be seen in the refund insights as, conversely, when refunds are done well, it is a huge factor in people’s willingness to recommend a company. This means it is a significant opportunity to be better than the competition, whether other travel organisations or self-serve booking.

Again, looking at the data, a key theme that comes out is that one of the reasons waiting 7 days for a refund is so annoying is that the customer wants to use the money to book another holiday straight away. So in this example, an organisation that offered instant refunds would have an advantage. They would be giving customers a genuine reason to stay and also to promote their brand to their friends.

Again this is not to say that this particular piece of insight is revolutionary or relevant for all businesses, but what is certain is that in order to stay ahead an understanding at this level of detail is what is required.

Whilst every organisation will have different segments of customers (whether by age, location, average spend etc) there will be themes, or sets of themes, that underpin these customers experiences. These themes and the specific factors that feed into them provide numerous opportunities to retain and attract customers by creating a point of difference versus the rest of the market. Using the data effectively is the key to prioritising and capitalising on these opportunities.

Theme Impact on Customer Experience

3.) Make your customers feel different

The refund example leads onto my final point. I have never liked the phrase ‘Delight your users’ (it has always sounded a bit naff to me) and yet the sentiment behind the phrase has never been more important.

Interestingly, however, what quickly becomes apparent analysing customer data, is that what’s required to delight an individual fluctuates depending on a whole range of factors, including their own expectations. For a budget airline, waving the cost of an extra piece of hand luggage could do the trick, but in terms of my expectations of another company it could take an upgrade to business class to ‘delight’ me.

However it isn’t just about getting me things I want, that is just a vehicle — one of the ways to achieve what you need to do — it is about making me feel differently. When you go above and beyond in a way that resonates with your customers you not only give them a reason to use you again, but just as importantly you give them a story to tell others.

Make me feel differently using your service vs doing it myself or using a competitor and you will be bullet proof. You will be the ones that not only survive but thrive.

So how do you achieve this?

Happily, nowadays technology is quick and easy to set up. Whether you are looking to augment existing methods of understanding your customer or starting from scratch the latest technology means you can be ready to go in a matter of hours and gaining insights from week one. At Chattermill we use artificial intelligence technology to achieve a real time understanding of customers.

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    Jack Miller

    As a CX Analyst, I work with companies designing their customer journeys to ensure they are both comprehensive and accurate. Applying cross sector best practices and an understanding of each business’s unique relationship with their customer base, I focus on identifying what elements need to be put in place to take each organisation from their current level of customer understanding to a best in class understanding of all customers.