For airlines around the world, developing a comprehensive, 360-degree view of their customers is vital. As the travel industry limps back to normal after a couple of years of travel curbs, airlines will benefit massively if they can figure out what triggers an individual’s purchasing decisions.
To do this, and turn customers into assets, airlines need to create and cater to segments based on value, behavior, and needs.
Enhancing the travel experience through segmentation
For everyone from corporate customers to retail customers to large packs of tourists, airlines can apply segmentation to provide optimal fares, offers, and ancillaries. The segmentation can be based on anything; flying frequency, demographics, etc. are all considerations.
But how does such segmentation help airlines to the extent that it is embraced as the future of airline distribution?
Maximizing the revenue from retail customers
Retail customers are generally low yield fliers but viewing them as a segment with specific needs will go a long way in maximizing the returns from each seat. The key is ancillaries, such as food options, drinks, covid insurance, etc.
Within retail customers, you can have segments based on paying capabilities, which is an approach that has been successful for Delta Airlines and many others. Notably, Delta managed to offer enhanced personalization with the help of products, such as Delta’s Economy Plus, which targets affluent couples.
To optimize its revenue, the airline tailored its NDC content, pricing, and retailing channel based on the requirements of the target group.
Making the most out of corporate travel
Generally, corporate customers don’t mind surge fees for late bookings, and they will also prefer to fly with comforts, such as priority boarding, checked bags, onboard meals, etc. Some airlines even provide Wi-Fi and business lounges for this passenger segment.
With highly granular segmentation and insights from customer behavior, airlines can further provide business travelers with stellar customer service. For instance, when the airline knows that someone is a business passenger, they can offer easy flight cancellations, seat upgrades, and notifications during disruptions, which will go a long way in bolstering customer retention.
Taking advantage of group bookings
Tourists, religious pilgrims, corporate group bookings, and mass requests from travel agents can all be treated as different segments that airlines can take advantage of with personalized pricing and product offers.
Flights like Malaysian Airlines have dedicated Hajj trips with flights that serve only specific meals that are consistent with the occasion, have prayers onboard at the prescribed times, etc. This has been a huge revenue generator for the airline.
Further, travel agents may look for discounts in exchange for a large number of ticket bookings that will come in consistently every month. Airlines can make use of demand forecasting and seasonal tourism data to provide optimal pricing for them.
Apart from this, companies that have employees traveling in large numbers can be served with loyalty programs, access to premium business lounges, etc.
A surprisingly underrated passenger segment
In many countries, governments mandate their employees to only travel on their national carrier. This can be a lucrative segment for airlines if they can provide the government employees with a dedicated portal for bookings, cancellations, and unlocking rewards for flying frequently.
As NDC adoption takes off, airlines can also segment customers based on shopping data and customer intent. Enhancing the NDC-shopping experience will go a long way in helping airlines enhance the conversion rate and customer experience. Moreover, this allows the airline to keep customer needs at the center while designing future products, bundling fares, and making marketing decisions.
Not all passengers are the same. As air travel becomes increasingly common, airlines need to figure out how to effectively cater to nearly 3 billion passengers from different backgrounds. With customer analytics, airlines can successfully implement value-based segmentation and consequently boost profits. If you are looking for a solution that can handle customer segmentation for you and provide you with actionable insights on how to cater to them for optimal revenue, reach us email@example.com