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The Transformation Journey: Lufthansa Group’s Shift to Airline Product Analytics

Iztok Franko

Airline Product Analytics Lufthansa

For all you digital professionals who want to learn about airline product analytics, this Diggintravel Podcast episode is a must-listen.

While working with various airlines and their digital teams, I’ve observed a common trend: they often start with a single digital team handling analytics, CRO, and optimization, and then expand to encompass multiple specialized digital product teams. One question that I often get in this process is how to effectively reorganize when an airline’s digital team evolves from a singular, multi-functional team to a more complex structure with several specialized digital product teams.

That’s why, in the past, Diggintravel has highlighted a variety of organizational models. We’ve showcased examples ranging from Air Europa’s approach to building their CRO team to Ryanair’s methods for conducting UX research on a large scale, and even how a major airline like LATAM Airlines structured a decentralized organization with multiple digital product teams.

Now, we bring you another insightful case study: the Lufthansa Group and their Digital Hangar’s journey from web and CRO analytics to airline product analytics.

Laura J. Hornbake, Product Analytics Community of Practice Lead at Lufthansa Group Digital Hangar, talked about their shift towards a decentralized model and the establishment of a digital analytics community of practice, highlighting how some of the most innovative airlines are revolutionizing the use of analytics to build better products more efficiently and on a larger scale.

And naturally, our discussion wouldn’t be complete without delving into personalization and AI.

Airline Product Analytics – Talk with Laura J. Hornbake,

Listen to the new episode of the Diggintravel Podcast to learn all you need to know about airline product analytics, or read on for key highlights from our talk with Laura:

And don’t forget to subscribe to the Diggintravel Podcast in your preferred podcast app to stay on top of the latest airline digital analytics, marketing, data science and AI trends!

The Digital Hangar’s Role and Organizational Model

Before diving into the intricacies of digital products and analytics, it’s essential to understand the entity behind these innovations for the Lufthansa Group. The Digital Hangar serves this pivotal role, as Laura elaborates:

The Digital Hangar in the Lufthansa Group is an ecosystem that essentially has the role of the digital delivery unit for the Lufthansa Group. The new Digital Hangar company in Germany has been part of the Lufthansa Group since late 2022. But it [the ecosystem] also comprises the airlines and partners. So it’s a very interesting ecosystem to work in and is really the heart of a digital transformation that’s happening for the airlines.

Going further, Laura explained the organizational structure of the Digital Hangar and how product analytics fits in:

We have an organization around our so-called value streams, which are the vertical organization around which we deliver value for our customers. We have tech platforms there that deliver the technical capabilities for these value streams to develop on. And then the horizontal piece to align everybody around different disciplines are the communities of practice, and that’s where the Community of Practice – Product Analytics comes in.

We are the home of the experts around all things data analytics, BI, digital analytics, experimentation, A/B testing, all of those things that we bring then into product teams. We have design authority about how analytics is done in this Digital Hangar, so we provide guidelines; we strive to bring together individuals from different product teams, encouraging them to share their knowledge and collaborate effectively towards unified goals, and we provide the strategic vision for data analytics in the Digital Hanger – along with, of course, the tech platforms, who are super important to us, and the value streams, who provide the reason for us to be doing any of this in the first place.

To illustrate the practical application of this matrix model, Laura shared a specific example of how value streams (the verticals) work with her team:

Here’s an example of what the value streams are even doing, we have the verticals. Some might include customer servicing, so dealing with the digital self-servicing topics to help our customers out, or the loyalty and profile vertical that works on retention of our customers and developing loyalty. We have the analysts working there, but they also then, yes, belong in this community where they share what it is that they’re doing and the best practices that they’re developing along the way.

From Booking Funnel Optimization to Airline Product Analytics

Like myself, Laura has a CRO background as a Team Leader for Analytics & Conversion Optimization at Swiss Airlines. So, of course, I was curious about how her current team and setup fits into that. How do they support airlines in the group with CRO

The booking funnel, for example, is part of one of the value streams in this new setup. Historically, I’m coming from the digital commerce setup, yes, where we were very much a centralized team dedicated to the commercial aspects. Not exclusively, of course; we always think about the customer KPIs and things. That’s critical if you’re doing any kind of optimization of the platforms. But yeah, this has been a transition for the airline teams that were organized around those commercial topics, decentralizing and rethinking how we work in this whole process.

While Laura’s team actively supports airlines in the group with optimizing the booking flow, their role extends beyond this.

Those topics [CRO] are still very near and dear to my heart and to some of our analysts, but the scope of the whole community has expanded far beyond those booking funnel topics and into some very interesting new areas like thinking about the chatbots or the in-flight entertainment systems, looking at our check-in processes more closely – which is really great for the perspective of the analysts because it widens our perspectives to the entire customer journey. And I think that’s a critical orientation for us because as analysts, one of the key things that we want to be able to do – we don’t want to be in the business of just simply delivering numbers to put on a slide. We want to know what is the impact, at the end of the day, on the customer. So this new setup makes it very clear to every analyst who’s working on a particular feature how that fits into a bigger picture in the customer journey.

Biggest Difference Between Web Analytics and Digital Product Analytics

Reflecting on Laura’s evolution from doing CRO and digital analytics for an airline to her current broader role, I was keen to understand the key differences between ecommerce or web analytics broadly and airline product analytics:

There’s two key areas that are very, very different. The first is the technical. The world of web analytics / digital analytics was born in a very particular moment in the history of the internet and developed around some very standard kinds of metrics. The technical shift that I think is represented in product analytics is it’s about more of an event-driven architecture where we want to identify key interactions and key moments in the customer journey that go far beyond the old world of the digital analytics.

The business side of it is it reflects a different way of working. I think one of the things that digital analytics, or at least in my practice of it, coming from having done it for many years – we struggled with getting into the business, which I think is what we mean now with companies undertaking a major digital transformation. It’s about welcoming those technologies into the heart, into the core of the way companies work. And likewise, we were the forgotten-about area of a company that people didn’t understand well and so had a difficulty bringing in, tended to marginalize. Digital analytics likewise suffered this as a sort of ghetto that was not welcomed into the practice of data analytics more broadly.

So I think now that we build digital products in these end-to-end teams, we bring this digital analytical perspective into a new way of thinking, the product analytics way of thinking, that helps teams that are working now, composed of both business roles and technical.

Empowering the Business for Data-driven Decisions

The last part, focusing on the business aspect of product analytics, is very important. Often, analytics are conducted by analysts who provide insights, but these aren’t regularly utilized by business or product people in their daily operations. This is why I was curious about how Laura, in her Community of Practice role, is striving to change that.

I think that’s part of what makes this role very interesting. I think we have a key job in this community at the very heart of transformation – that data-driven decisions within our teams are a way of actually empowering teams. They have all of the information that they need about what our customers are doing, how they’re interacting with the things we provide them with, all of this feedback, the qualitative piece, that’s there, and interpreting that data is not easy.

We are there to move these product teams along in terms of their literacy using this kind of data, and to make sure that they have it at their fingertips so that they are able to make good decisions day to day.

Experimentation as the Best Example of the New Model

Reflecting on Laura’s past experience in conversion optimization and digital analytics for airlines within the group, I was eager to learn how conversion rate optimization (CRO) and experimentation have been adapted in their new, more integrated digital environment.

I think the transformation of this particular area is a really bright spot we did early on and is maybe the most mature part of our practice of analytics. We currently have an experimentation team that goes across both our community side, which is more business side, and the technical side, so the platform people who make these capabilities available to us. This small group of people, we were faced with the idea of “How can we possibly crack open the practice of optimization and experimentation to now meet the demands not only of” – these were people who were working within the booking flow – “now we want to make these capabilities available to 60+ product teams, and we’ve only got these three people.”

Laura highlighted the significant shift in their approach to analytics and A/B testing, moving from doing these tasks themselves to a focus on educating and empowering every digital product team. This change involves not only teaching teams how to use these methods but also inspiring them to think creatively about hypotheses and experiments.

We recognized very early on in this transformation process that it was going to become necessary to work in a completely different way, and shifted very quickly the focus from doing A/B tests for some other person, some other team, to enabling any team to use these methods and educating – doing hackathons in which we get people to put their hands into the tools and see actually they’re not really that hard to work with, getting people thinking about what a good hypothesis actually is, and then really unleashing all of these teams on these platforms and seeing what happens.

And of course, it’s not the same as “We have these brilliant ideas and we’re going to test them out.” It’s accompanying a lot of new people on a really exciting journey of exploring this kind of stuff. It’s a totally different animal from being the lonely conversion rate optimization person who sits outside of the teams and kind of received a lot of pushback at times, because they were perceived as a threat, telling developers that they were doing things wrong.

Personalization, AI and the Future of Digital Analytics Roles

By listening to the full podcast chat with Laura, airline digital professionals can gain insights on a variety of topics:

  • The natural progression from enthusiastic champions in analytics to embedding a data-driven decision-making culture in airline companies
  • The intricacies and challenges of personalization in airlines, emphasizing the importance of high-quality first-party data and customer consent
  • The role of AI in enhancing customer engagement and operational efficiency, including its application in customer service chatbots and internal workflow automation
  • The evolution of analytics roles and the potential impact of AI on the future of these roles within the industry

To learn more about any of these important topics in airline digital strategies, make sure to listen to the entire podcast. You can access it through the embedded podcast player in the article or on your favorite podcast platform.

Do You Want to Listen to More Talks With Airline Digital Leaders?

If you want to learn from leaders like Laura about digital, analytics, and AI, or just want to be the first to know when our next Airline Leaders Interview will be published, please:

Iztok Franko

I am passionate about digital marketing and ecommerce, with more than 10 years of experience as a CMO and CIO in travel and multinational companies. I work as a strategic digital marketing and ecommerce consultant for global online travel brands. Constant learning is my main motivation, and this is why I launched Diggintravel.com, a content platform for travel digital marketers to obtain and share knowledge. If you want to learn or work with me check our Academy (learning with me) and Services (working with me) pages in the main menu of our website.

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