“It’s GREAT… BUT I don’t think it’s the right time to invest in airline marketing education.”
“Looks really COOL… BUT unfortunate timing as most airlines have cut their training budget.”
You’ve probably seen that we just launched a brand new Airline Digital Retailing Academy. During the design phase, I reached out to more than 100 different airline professionals to get their feedback. I wanted to hear what airline marketing and digital pros think, as we wanted to design the Academy to help you become the airline marketer of the future.
The above two quotes are just two of the answers I received, but many others were very similar. Now, I fully understand the situation airlines are in at the moment. Investments, training, and most digital projects have been cut. And I’ll be the first to tell you that as an airline marketer or a digital pro, you’ll have to do more with less (more on how to do that later in the article).
But is everything really so bleak?
Is it really the time to cut everything and not invest in change and the (digital) future?
Then I saw the Econsultancy “The Future of Marketing” report (July 2020), and it made me feel a bit more optimistic about the future of airline marketing.
Yes, you will need to change, you will need to adapt, but I believe there are also opportunities for you to explore.
Where and how? Read on and I’ll show you which areas I think will be crucial if you work in airline marketing, digital product or ecommerce.
While 57% of the 812 marketers across the world that Econsultancy surveyed think their budget will decrease (and we can agree that percentage is much higher in the airline industry), most are optimistic about their future. Why is that so?
Because, according to Econsultancy:
“Whether to drive short-term economic recovery following the COVID-19 crisis, or for the longer term, marketers see marketing as an essential and enduring function of business.”
Even more:
“The COVID-19 pandemic presents an existential risk to many organizations, but it is also seen as the driver of change and opportunity. The world is likely to look different on exiting the crisis than it did on entering it; marketers see the future as belonging to those who can best understand that change.”
Similarly to the Econsultancy report, another piece of research by Twilio decision-makers across the globe stated that:
“COVID-19 was the digital accelerant of the decade and has accelerated companies’ digital transformation efforts by a global average of 6 years.”
Think about it again: digital transformation plans have been accelerated by 6 years!
Now, I understand you might think it’s easy for others to say that, but our airline industry was hit the most. However, even airline innovation leads see the current crisis as an opportunity to accelerate innovation and digital adoption. If you don’t believe me, check out this interview with the Head of Innovation at Etihad on how they addressed COVID-19 challenges with innovative digital solutions.
But how can you accelerate digital adoption without investing in your digital skills?
I would say you probably can’t. However, investing in your digital optimization skills will definitely help you maximize ROI and the marketing effectiveness of your current (and future) marketing activities, which should make such an investment much easier to justify.
I admit that when I saw the top 10 areas global marketers see as the most important in the next two years, I felt really good. Why?
Because our Airline Digital Academy is designed to address almost all 10 areas. To me, it looks like global marketers have finally understood that customer centricity, data-driven marketing, and building digital products to address our customers’ pain points is the right way to go.
Source: Econsultancy – The Future of Marketing (July 2020 report)
Let me dig into some of the areas in more detail and show you how they relate to the future of airline marketing.
If you’re an airline marketer or digital pro, you’ll need to do more with less in the short term. We’ve been saying this for a while now here at Diggintravel. Hence, “how to do more with less” is the main theme on the home page of our website.
Ipsos 2020 CX research showed exactly the same trend:
Changing customer behaviors coupled with a tough market ultimately mean CX teams must do more with less.
Source: Ipsos – CX Voices: 2020
This means a lower advertising and acquisition budget, so digital optimization (CRO) will become more important than ever.
A typical mid-sized airline has more than 30 million yearly visitors, yet only 3 to 5% of them usually convert and do the booking. But do you know what happens to the 95% that don’t convert?
Do you know why and where they leave your booking funnel?
Imagine if you could understand that and increase your conversion by just 10%. That would mean 150,000 additional bookings for an average airline. Not bad, right?
Now, think about the same math for a large airline with hundreds of millions of yearly visitors. Furthermore, a higher conversion rate means lower customer acquisition costs (CAC) for your paid digital campaigns.
This is what marketing effectiveness is all about and why we put digital optimization and CRO in the center of our Airline Digital Academy (in Module 2).
Source: Diggintravel 2020 Airline Digital Optimization Yearbook
If your airline is one of them, this is the first place you need to start to do more with less.
I grouped two of the Econsultancy top 10 categories together because they are tightly connected. If you want to improve your digital customer experience, you need to understand your customers first. COVID-19 brought tons of new questions and friction points for your customers. You can now see some of the recovery and return of the demand, so it is crucial to understand your customer friction points.
Your airline marketing process should start by being agile and proactive in analyzing travel demand. The next step, after you understand where demand is coming from, is to do agile user research to understand key questions your users have. And remember, a one-size-fits-all approach won’t work. You need to identify different user segments and key scenarios for your users, and address the key friction points on your website with relevant messaging and products.
In our Airline Digital Academy, we’ll go through each of the above steps in detail: we’ll show you the framework of the airline digital optimization process (Module 2), detailed airline booking funnel and demand analytics (Module 3), and the key concepts of agile user research (Module 4). Finally, we’ll put it all together and explain how to build great digital products as a result of this systematic digital optimization process (Module 5).
In the prior section, I explained why the one-size-fits-all approach won’t work anymore. Personalization has been on airline agendas for such a long time, but it seems we still struggle with it. Personally, I see personalization as a result of all key airline digital optimization activities.
First, you need to be good at digital analytics to find various segments and different user behavior in your data. Next, you need to understand why different users (different segments, different use-cases) behave differently by applying agile user research principles. Then you can create different elements (different messaging, different UX, even different products) and run experiments (A/B tests) to see what works for different users. We call this rule-based personalization powered by experimentation. Only when you master this can you move to algorithmic (machine learning) personalization.
Again, we’ll cover this whole process in our Airline Digital Academy through 5 modules. In addition to that, we’ll work with you on your targeting and personalization scenarios in our special deep dives.
Let me go back to the intro and my colleagues’ feedback of “This is really cool, BUT not the right time.”
I fully understand the situation airlines are facing currently; I went through several crises back in the days when I was an airline marketer and my airline was struggling. The first response was always to cut costs in training and people development. This is why I started to research how effective these actions actually are.
During my research I ran across this report from Boston Consulting Group where they analyzed people-related actions during the last major crisis in 2009.
BCG’s survey and research show that cutting back on training was the least effective action taken during the 2008-09 financial crisis!
Here is a quote from the report:
“In the survey, respondents said that these two types of cuts not only were the two least effective actions in the last recession but also had a relatively negative impact on employee commitment. While training may be an easy item in the HR budget to cut, it is frequently the wrong one. Training, after all, prepares companies for the future.”
Source: BCS – Boston Consulting Group
I love the last sentence from the quote: “Training prepares companies for the future.”
So, what will the future look like and how can airline marketers prepare for it?
Your digital budgets will probably decrease considerably in the next two years. Airline marketing and digital teams will be smaller. This is why you’ll need to work smarter, be more data-driven, and maximize your marketing effectiveness. Remember the “more with less” mantra.
But I share the optimism of the global marketers from the Econsultancy 2020 survey.
The role of marketers, especially digital ones, should be to help the company change and innovate.
Some airlines are already recognizing that and investing in digital innovation. Here is another quote from Etihad’s Innovation Lead:
“We know that there will be a redefinition of what the new normal in travel is going to be, so how do we ensure that we come out of this crisis – and I think ‘crisis’ is the right word to describe the impact on travel as a whole – how do we start innovating now and start aligning our business now to make sure that when we come out of this crisis, Etihad is hopefully stronger than before and we’re leading the game when it comes to the redesign of what travel looks like. Because travel is going to be completely different.”
To redesign the digital travel experience, you’ll need an end-to-end understanding of the airline digital retailing process.
By digital retailing, I mean the whole process, from generating demand (increasing your traffic) to conversion optimization (increasing conversion rate) and building digital products to generate new ancillary revenue streams.
In the past, our industry grew so fast that we developed many specialized roles responsible for different parts of the digital retailing process. As a result, end-to-end understanding of the process was lost and different departments were optimizing partial, silo metrics. I call them vanity metrics.
The airline digital marketing of the future will need to be leaner and smarter. Complex problems cannot be solved by people with very narrow, specialized knowledge. For that, we’ll need marketers with broader digital skillsets and understanding of the customer journey from the beginning to the end.
We designed our Airline Digital Retailing Academy to help develop the airline marketers of the future. I truly believe the investment is insignificant compared to what is at stake for airlines.
If you want to become a modern airline digital marketer, JOIN THE DIGGINTRAVEL DIGITAL ACADEMY NOW.
Paul Byrne
Nice article, Iztok. I fully agree that cutting training budgets will be counter-productive for airlines. Investing during the crisis will position the airline to be ahead of the curve coming out of the crisis. Bain and Gartner also have research to highlight the same outcome i.e. investing during a crisis pays off in the long term.
Iztok Franko
Thanks, Paul! It’s a tough situation for airlines when most are in survival, prevent cash-burning mode. But yes – to look into the future, some changes will happen, especially on the digital side. And investment in training and skills is really insignificant compared to the spend on advertising, digital platforms, UX…and like I pointed in the article we need to maximise current marketing spend first.