The saying goes that everybody has a price. But in order to have a price, everybody has to have a value. Our landmark report, Embracing airline digital transformation, introduced the ‘product vs service vs convenience’ paradigm for airlines. The paradigm is a blueprint to group the various attributes of an airline’s offer that an individual traveler will value at a specific moment. Breaking the model down further provides a clearer view of how different attributes are grouped.
For airline customers, the value is the sweet spot where they feel that the balance between product, service, and convenience is achieved. Each time a customer searches for a flight, they bring their individual values to the search in the following ways:
- Product: “It’s a long flight – I want as much legroom as possible.”
- Service: “I want to feel like my holiday has started as soon as I step on the plane.”
- Convenience: “I need a direct flight; I don’t have time for a stopover.”
By applying this methodology to different travel personas, airlines can create unique approaches to up-selling something of value to each of those personas. The more concretely a traveler fits into one of the attribute groups the greater the opportunity for airlines to intuitively market components of the offer that have value to the traveler. But how can airlines exert influence over what travelers decide to choose?
Choice and how people make choices is a complex subject related to the theory of bounded rationality. As Dan Ariely explained in his TED Talk, imagine you offer someone two choices – London all expenses paid or Madrid all expenses paid. Choices are likely to be roughly 50:50. But what if you were offered a third option – the London trip but now it doesn’t include breakfast? London with breakfast suddenly becomes more popular even compared to Madrid, simply because London without breakfast is now an option on the table.
When it comes to digital interactions it is those airlines that manage to guide a customer through the sales process, whilst limiting the complexity of choice that will come out on top.
Looking to the future we can expect artificial intelligence, empowered through design by human agents, to play a greater role in guiding travelers through the decision-making process. By interpreting traveler behavior and identifying the best opportunities to serve them AI promises even greater personalization and inspiration.
And travelers will be able to access this guidance through emerging interfaces. Whether its chatbots interacting via WhatsApp or bots embedded in social media platforms – the opportunities for airline brands to engage travelers are growing quickly.
Be sure to download a copy of our report, Embracing airline digital transformation: a spotlight on what travelers value, for more.
Originally published on the Amadeus corporate blog.