Peppers on personalization in the airline industry
Don Peppers is a founding partner of Peppers & Rogers Group, a customer relationship management consulting firm, and author of a handful of books on marketing including the most recent title "Return on Customer: Creating Maximum Value From Your Scarcest Resource," which he co-authored with Martha Rogers. As a direct marketing industry veteran, he recently joined the board of advisors for a new start up called Jetera, which aims to take personalization in the airline experience to new heights. Associate editor Dianna Dilworth interviewed him to discuss the current state of the airline business and how direct marketers can leverage opportunities.
What are the challenges the airline industry faces when it comes to customer engagement?
The problem all airlines have is that air travel is a commodity, with very little available to differentiate one airline's actual service from another. And while airlines were pioneers in the customer-loyalty field with their frequent-flyer programs, for the most part these programs aren't used as effectively as they could be to engage customers. Engagement requires a more personal level of service, service that reflects each individual customer's own situation and preferences.
One of the biggest hurdles to more personalized service is using information the airline has about customer preferences to change the actual on-board experience, one customer at a time. There are lots of barriers to doing this, from inadequate integration of information systems to obstructive union work rules.
How has a brand like JetBlue changed consumer demand for personalization when flying?
JetBlue does not rely so much on personalization as it does on pure, simple efficiency. You can't fly JetBlue without getting the impression that the whole operation was set up from scratch to remove the needless barriers and time-wasters that lie between you and the plane.
Of course, the on-board experience at JetBlue is defined primarily by the real-time television and entertainment products in every seat back. This innovation is rapidly being copied by other carriers, however, and will not be unique to JetBlue for very long. It remains to be seen whether this new entrant will be able to carry airline innovation to the next level, but the signs are promising because JetBlue is one airline founded primarily on computer technology. It is not an airline that had to have IT grafted onto its systems. It is an airline built from the start with an eye to using IT more effectively.
What is your role at Jetera? How does your background in direct marketing play a part?
I'm on Jetera's board of advisors. I advise them. There is no set amount of time or work involved, and I can get immersed as deeply as I care to when it comes to the issues with which I have an expertise or interest.
Direct marketing is great preparation for all things interactive, and Jetera's proposition is based on a high use of individualized interactivity and personalization. I don't really consider myself a direct marketing expert, but the company has an experienced direct-marketing professional on board - Robert Messinger - to help them with this part of the venture.
How does Jetera work and what does it mean for marketers and consumers alike?
You could call Jetera a new "medium" for interactively reaching consumers, one consumer at a time, within the context of their travel. But that doesn't really capture the power of the concept. Jetera is fundamentally a "matchmaker" between marketers and consumers.
There is a unique and powerful capability underlying Jetera. It grows out of using a consumer's future intent to dramatically enrich his or her travel experience. Jetera improves both marketers' efficiencies and travelers' experiences. The ability to do this is in step with clear trends that show people don't want to be bombarded by irrelevant advertising, but do respond to material that is in line with their interests. Moreover, consumers want more control over the information sent to them, but they still very much want to learn about opportunities that fit with their wants and needs. What these people are waiting for - perhaps with out knowing it - is the Jetera system.
How will Jetera work with airlines and the major e-commerce sites like Kayak, Expedia and Orbitz?
Jetera will function as an invisible supplier behind its travel-industry partners. It will bring new value to consumers by significantly improving their travel experience, such as help them save money, take advantage of relevant opportunities and give them personalized and timely advertising and entertainment options. Airlines, hotels and travel e-commerce sites can really boost customer loyalty - and do it at multiple touch points throughout the travel process. By the way, our travel partners can maintain tight control of their travel reservation data when working with Jetera.
The power of the Jetera system is that in can have an enormous and positive effect on hundreds of millions of annual travelers. It will do this by enabling travel-industry players to provide valuable, actionable content in ways never before possible. Jetera is now establishing the win-win relationships with strategic partners that will bring this new capability to consumers.
What is your outlook on the direct marketing industry as consumers demand more control?
We've all known that consumers would be gaining more and more control over the media they consume and the marketing messages they receive. Today, what is happening is that consumers are talking to each other more than ever before, and so word spreads rapidly with regard to companies' reputations. Do a disservice to a customer today and you will be outed at the Church of the Customer site, or at TripAdvisor, or at any one of hundreds of other review sites.
You could look at this as being restrictive to businesses, because they are forced to pay much closer attention to the level of trust they build with their customers. But I actually think this development empowers businesses, because the more trust there is out there the less time and money is wasted on checking up on things. Trust is a lubricant that eliminates friction in our economic engine. So as customers take greater control, I predict that trust will be the "next big thing" in business - how to earn it, how to keep it, how to reclaim it when mistakes happen.