GuestLogix has been a provider of onboard retail systems for over 10 years. Recently, it introduced a new ‘day of journey’ commerce platform. As well as helping airlines to generate ancillary revenue on-board the plane, it also enables them to do so throughout the "day of travel" – before, during and after the flight.
Delivering better passenger experience is a combination of “machine learning, analytics and really good behavioural psychology,” Edwards explains.
He says: “The whole field of behavioural economics is one of really understanding cognitive psychology. They've catalogued over 100 different cognitive biases that we're prey to as human beings. We use heuristics to make decisions. Otherwise, we couldn't even get in our car to drive somewhere. We need to automate these processes as human beings to get through our day.
“Once we understand what some of these are, we can then better position our products or services in a way that maximises the benefit to those customers and understands the way passengers think.”
Tapping pocket money
Edwards gives the following example: “When we spend money we don't do it necessarily rationally the way economists used to think. We dip from one of our four piggy banks. We either go into our income, we go to our savings, sometimes we go to some windfalls that we've had, or we go into the best piggy bank of all – our pocket money.
An airline ticket is typically paid for through savings or income, he notes, and so these are “very, very deliberated decisions”. With ancillary revenue the opportunity really lies in how to release more pocket money.
Edwards says: “I’m not going to buy an expensive meal at the time of purchase of an airline ticket during a very deliberated purchase where I've tried to get the very best value. But in a moment, do I want to treat myself to a nice meal because I deserve it, and I got a great ticket price, and I'm excited to be on my journey? Absolutely. I'm willing to spend at that time. So, once we understand the psychology of how people spend money, we can make it easy for them to do so.”
Enabling with technology
The technology’s job is to enable this and make it simple, Hopper, Guestlogix, says.
He comments: “If these revenue opportunities are impulse purchase decisions that people make, then from a technology perspective those have to be as frictionless as possible. So, one touch to purchase, frictionless payment. You have to make sure that someone doesn't have to pull their credit card out of their wallet to make a purchase. Otherwise, you're increasing the opportunity for abandonment or missing that revenue opportunity.”
He adds: “We've taken the behavioural science and applied that to our technology to make sure that we can actually realise those impulse buying opportunities.
How personal is personal?
A lot of the talk about passenger experience is around how airlines and other providers can offer a more personalised experience to their customers. The received wisdom is that companies have a lot of data clean-up to do before they can really personalise. However, Hopper says, they don’t necessarily need to wait for this.
He comments: “There's a lot of data that lives in silos [but] you don't necessarily have to break down all of those silos to start to offer personalised or tailored service. You don't have to have full connectivity to a CRM (customer relationship management) system or a loyalty system.
“Some of the obvious things that airlines have access to are location, [time of travel] etc. so you can start with essentially small data. You can start to personalise based on small data focusing in on the moments of stress during a journey because you know exactly when those are going to happen and start to personalise offers that will alleviate that stress.”
The theory is that by doing this, airlines will improve the passenger experience – and, in turn, they’ll make more money.