Fear not! Analytics are here! A real world example

In my post last week, I shared that many people are intimidated by analytics.  This week I will share a practical application of analytics to demonstrate that there is no need to “fear” analytics and in fact, with a few simple steps, they can have a tremendous impact on organizations.

The following scenario is based on a true story (names, industry have been changed):

Fly First airlines is a major international airline which has experienced tough times over the past several years. IBM CMOWith an aging fleet, Fly First has experienced widespread mechanical problems leading to delays which have impacted customer satisfaction and caused a lot of complaining on Social Media sites. Customer satisfaction scores have dropped over the past year and Fly First has seen a decline in passengers and fewer repeat flyers which has directly impacted the airline’s revenue streams.

Jay, Fly First’s CMO, has decided that deepening the knowledge of it’s customers is the best way to get the airline back on track. Jay knows that traditional data sets from internal systems such as purchase history and customer service inquiries would only tell him part of the story.  He made it his mission to deepen his understanding customers by expanding data collection, ensuring all analog and manual touch points become an opportunity to understand Fly First’s customers better. To accomplish this his team digitized menu selections by implementing electronic menu selections on seat back touch screens, allowed only credit cards for in-flight purchases, and using data capture capability conducted frequent digital surveys that covered topics like service, preferences, and how they pass time during flight delays.

Jay and his team in partnership with IT built detailed, individual 360 degrdigital thumb printee views of individual customers by combining multiple data sources from behind and outside the firewall.
They used interaction data like marketing responses, emails, call center notes, web click-stream; attitudinal and sentiment data bought from third parties or from social media like twitter, facebook and blogs, behavioral data including flight history, frequent flyer history etc and descriptive data such as seat preferences and demographic data from third parties and from their own data sources to build out a complete view of their customers
Jay believed that their enterprise data was only telling a piece of the story, so he asked his team to use the sentiment analysis capability to analyze what was being said about Fly First on social media channels.
Through the social sentiment analysis they discovered that:
  • Sentiment for Fly First had gone from positive to neutral to negative in 6 short months.
  • Negative sentiment was around frequent flight delays due to mechanical issues, lack of care and attention by gate staff to the inconveniences of the delays, and the flights always running out of the food they were going to order before it reached them.
  • Sentiment was extremely positive about the Fly First lounge experience.
Jay’s team also looked at which social media participants were positive, neutral or negative about Fly First and integrated the Fly First website with leading social channels enabling them to extend the social media analysis to individuals by linking frequent flyer accounts with social media accounts.
Jay knew to get the best understanding of customer needs he needed to continue to expand data collection activities to capture more customer information.surveys  To accomplish this, the Fly First team put in place a series of incentives for customers to share information about their preferences and opinions of the airline.

Jay’s team continued to increase data collection about customers
by creating incentives, such as frequent flyer awards for survey completion, for customers to give more information about themselves.
Jay had long leveraged analytics to identify profitable customers and increase customer retention. Now he is using it to predict behavior, such as seat upgrades or
in-flight duty free purchases, as well as leveraging social network analysis and entity analytics to understand his customers’ social networks.

With access to the all customer data, the Fly First team applied data mining capabilities to get a better picture of what their customers are likely to do and want.
They were able to predict:
  • Which offers would likely be accepted by their customers based on past history and sentiment.
  • Which customers are likely to refer a friend to the airline
  • Which customers are likely to buy flight upgrades, buy in flight meals, pay extra for lounge access.
  • What would increase their likely of leaving the airline
  • What increases their loyalty
One of their discoveries was that free lounge passes were the offers most likely to result in positive social sentiment.
Given these new insights into customer behavior, Jay and team are now able to engineer a new set of innovative experiences for their customers. Meet Rick and Andrea, two unrelated Fly First passengers waiting at a gate to board their flight to Chicago.
Rick:
He’s a sales manager who fly’s frequently but not always with their airline so has no status.
He recently took his family to Europe on FlyFirst.
He travels with an iPod, iPad and Bose headphones
He complains about delays frequently (as captured by the gate agents and on the surveys)  He has a large twitter following (linked his twitter to his account when he responded to a an offer sent by twitter) and actively tweets about the airline.
He also writes about his experiences flying on Fac ebook.
He always orders a bud and a chicken quesadilla when flying over lunch or dinner
Andrea:
She’s a Marketing executive
Loyal frequent flyer who has Elite status and access to the Lounge.
Travel economy and upgrades when possible
Frequent Facebook user with low social media influence
Purchases food on most flight
Frequently orders from Duty free.
Rick and Andrea’s flight has been delayed by two hours.  When the long delay getsphone recorded it triggers analytics to be run on all passengers determining which offers to text to which passengers. Due to the analytics initiative, Fly First is in a place to delight potentially disgruntled customers by offering customized offers to help make the wait a little bit easier.
Fly first knows Rick is likely to Tweet negative items to his large following and post negative comments on facebook. Fly Firsts systems analyze Rick’s data in real time and push an offer to him to go to the lounge for free.
Fly First also knows that Andrea is loyal customer who will likely head to the lounge and frequently purchases from duty free so they offer her a discount on in flight duty free.
Rick immediately takes First Flight up on their offer. While enjoying a beverage in the lounge, he publicly shares his new found appreciation for the airline via Twitter.
Andrea, also relaxes in the lounge. Later she boards the flight and buys her favorite perfume applying her discount and updating her Facebook status using the on board WIFI to “Just bought my favorite perfume compliments of Fly First”
The previous scene played out tens of thousands of times over the past year with thousands of customers. Fly First has increased their use of information to anticipate what their customers will want and do and act upon it in a way that yields incredible results.

Social media sentiment for Fly First has measurably improved from negative to neutral, with top detractors transforming to neutral or advocates. Lounge revenue is up, and frequent flyer participation has increased because of referrals. Customer insights are being leveraged to target promotions. Overall, marketing costs are down and yield is up.
I don’t know about you, but I wish my airline knew … and served me as well as this.

2 thoughts on “Fear not! Analytics are here! A real world example

  1. This helps put important, but sometimes confusing concepts into a real world scenario. One challenge is how to link all the data together across all these platforms, social media, internal systems, etc – once that nut’s cracked, this becomes much easier to realize. I suppose “Fly First” can leverage the frequent flyer number and email associated with the account.

    Like

    1. Doug – thanks for bringing this up. One of the design principles that “Jay” used was to enable linking frequent flyer ids and facebook accounts. This creates the link between across the different systems.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s