Mignon Buckingham, managing director of global loyalty agency ICLP, explains why turning disinterested passengers into devoted customers is vital when it comes to maximizing revenue, and how developing a deep understanding of a passenger’s needs and desires is the first step on this journey.
Non-aeronautical revenue accounts for well over two thirds of airport income. And there’s plenty of income to be had. Travel retail, often called ‘the sixth continent’, is a US$60bn plus business, and airports will lose out if they don’t invest in order to secure the biggest possible slice of this very substantial pie.
That said, with travel retail facing pressure amid increased competition from other airports, rapid evolution in technology and increasingly demanding passengers, a more customer-centric approach is required. Winning and maintaining the loyalty of customers is not an option, it’s essential.
What do airports know?
Most airports don’t know much about their passengers – they know how many there are and where they are going, but they don’t know these travelers as individuals. Developing genuine loyalty depends on getting to know passengers at a personal level, which goes very much further than labeling them ‘business passenger’ or ‘leisure traveler’. In fact, categorizing passengers in this way can even be misleading as consumers travel for different reasons at different points in time. Speaking to a traveler as a business passenger when they are actually traveling for leisure can have a negative effect on the relationship. To foster a higher level of intimacy, we’ve got to move away from the ‘passenger as statistic’ way of thinking and look at the passenger as a human, with an understanding of their unique personalities, habits, likes and dislikes.
What is the passenger value exchange?
To achieve this intimacy, we first need to give passengers reasons to engage in the value exchange, helping them to see the benefit of sharing personal information. ICLP recently conducted a study into people’s relationships with the airport from which they fly, and we found that most people are open to having a two-way relationship with the airport. 64% of passengers already actively try to connect with the airport, (via the airport’s website or social media), so the metaphorical door is already open.
Of course most of these people need to find out practical information to make their journey to and through the airport easier, such as departure and arrival times, traffic news, or details on how to get to the airport. But clearly there is an opportunity to deepen that engagement. We need to ask ourselves how we turn a journey into a great experience, and what data we need to be able to answer that question.
When it comes to starting a two-way conversation with customers, airports need to understand the triggers that will encourage passengers to share their information. Over 50% of respondents would be willing to share their personal details in return for free wi-fi or flight notifications. 42% would be happy to share their personal information in exchange for financial incentives such as shopping vouchers, and nearly one-in-three respondents would register their personal data in return for road traffic information or a loyalty card.
Baby boomers versus millennials – do they really differ?
Don’t expect a ‘one size fits all’ approach to work across all age groups. Our study showed that millennials were more open to giving the airport personal information than other generations. Baby boomers were more skeptical with one-in-four saying that nothing would persuade them to part with personal data. This figure is in sharp contrast to younger travelers among whom only 10% would not be persuaded to share their personal details.
Millennials are also the generation most likely to be encouraged to spend at the airport, with almost half of them saying that offers would have them reaching for their, most likely mobile, wallets. However, our survey revealed that the lure of an offer could be used to entice the baby boomers, with nearly 40% of them saying they would be tempted to shop if they received offers ahead of travel. This suggests that, while they are reluctant to share their personal details, going down the offers route might be the key to striking up a relationship with this more cautious age group.
Clearly there is an untapped opportunity to build a connection with travelers, and, with the rapidly increasing ways in which airports can build a value exchange with consumers, that opportunity is only likely to grow. The use of new technologies at the airport is opening a wealth of channels to be explored.
Advances such as Dubai International Airport’s smartwatch app, which delivers essential airport information, JCDecaux’s iBeacon technology that allows customers to interact with advertising as they approach the advertisement, or OTG’s iPad based systems that add a range of enhancements to the airport experience from online ordering of food to accessing information on flight departure, are providing fascinating new opportunities.
The secret to success will be collecting the right data and using it intelligently to really understand who your customers are and what they want from their time at the airport. Only then can we begin to assess the most effective ways to drive loyalty and maximize spend.
Mignon Buckingham is the leader of ICLP’s growth and expansion internationally. She is also a board member of ICLP’s parent company, The Collinson Group. Mignon plays a key role in establishing the group’s suite of ancillary revenue products for travel and financial services.
July 8, 2016