For anyone who has attended the Phocuswright Conference, you know how fast-paced it is. Technology companies attend the conference to showcase their innovations within the travel industry, often with the goal of gaining both visibility and funding. These companies range from bootstrapped start-ups to the largest players everyone knows. For attendees, it’s a rare chance to see the next generation of travel tech, consider how they might take advantage of it, and understand how they compare with their peers in their use of data to drive business.
As a vendor in attendance, I was interested in how my fellow attendees were thinking about all this new technology. In talking with them over the course of four days, two schools of thought emerged: organisations that prioritise being conversion-oriented and those that focus more on customer experience. In essence, the travel industry is more like retail than ever before.
Conversion-Oriented Solutions Spill Over Into Travel
Several of the data-driven solutions on display highlighted their ability to drive conversion and provide lift. From algorithmic ad tech to recommendation engines, companies that got their start in retail have retooled to support travel. The bloodbath they created by saturating the retail industry with a confusing array of solutions — all sounding the same — drove them to commodity pricing models that hurt their valuations. Now, they are looking to do the same thing again in a new industry. Aggregators balance volume and margin, constantly seeking ways to generate more traffic ancillary bookings. Niche travel sites seek to differentiate with a laser focus on things like charter cruises, ski packages, and content curated to keep visitors engaged long enough to establish trust and bookings. In most cases, the attendees I spoke with capture a great deal of data for the sole purpose of driving conversions while a visitor is on their site or using their mobile apps.
Traveler Journeys Drive Experience
A focus on conversion makes sense for the majority of travel companies. If you book a flight, room, car or excursion, then at some point the aggregator or niche provider loses control of your experience to the airline, hotel, rental agency or tour provider. So, it’s wise to optimise the things you can control, such as traffic and conversions. But, if you are in a position to stay engaged with travellers throughout their journeys, then the experience matters more. Two conversations I had drove this point home: one with a booking agency and one with an airline.
Goals differ between channels
Phocuswright and Webtrends Optimize collaborated on research that validates how visitor goals for engaging with a travel brand are different from one channel to the next. One agency I spoke with has a data strategy that responds to customers differently based on a simple distinction between site and mobile visitors. On its site, marketers engage in the same kind of tactics that lead to traditional gains in conversion and lift. On the mobile channel, the company is moving away from its responsive site design to an app strategy to enable distinct user goals based on location post-booking behaviour. In this case, the bookings have already occurred, so the goal on mobile is to stay engaged and ensure the continued brand experience is positive. This requires integration with some kind of traveler profile, whether from a CRM or pulled from a data warehouse, to drive personalised experience outcomes.
First-party data personalises experiences
The use of third-party data is powerful for augmenting visitor profiles and enriching an experience. But, first-party data is the lynchpin in any program designed to personalise experiences. This became clear to me as talked with an airline that wanted to chat about personalisation on its site. Before we met, I visited the site so I could see what they were currently doing to engage visitors. I saw something rare: they have exactly one third-party on the site! (It’s an analytics tag to allow basic visitor tracking and attribution.) So, I asked the obvious question: “What exactly are you doing about personalisation today?” The answer was simple; they personalise based on the treasure trove of first-party data they have within their data warehouse after visitors authenticate via login or through cookie recognition. In other words, they use segmentation for personalisation until they can individualise experiences based on some kind of historical data. While not incredibly sophisticated, it contrasts the value of first- and third-party data. Even without a plethora of tags across their site, they were effectively achieving their goals for personalising experiences.
Set Your Goals Before You Choose a Data Strategy
This analysis is simplistic and anecdotal, but it aligns with patterns I have seen elsewhere. It also suggests that you need to have a clear understanding of your own goals for your site before you invest in technologies to drive your business. It may also suggest there is a maturity curve forming within travel related to the ability to take advantage of first-party data when it is available.
Ask yourself a few basic questions:
- How important is the need to drive traffic and conversion relative to improving overall traveler experiences? The more important the need to affect experiences, the more you need to consider investing in a first-party data strategy. The more important the need to see lift, the more you should consider use of third-party data through DMPs and the like.
- Do travellers behave differently within different channels? It may be that first-party data is more important in some channels than others. Apply the first question above to each marketing or support channel and decide whether some may make better use of first-party data than others.
- Are you able to stay engaged with visitors throughout their journeys? While hotels, airlines, and the like appear to have more robust CRMs and data warehouses, this is not always true. The largest aggregators know a helluva lot about travellers who book with them and they often have a broader view of their journey, since they may know what car rental agencies travel prefer (which a hotelier or airline might not have clear data on). So, let’s treat this as a maturity question: Are you able to act on the first-party data you collect to improve traveler experiences throughout their journey? If so, the value is in the first-party data. If you collect it, but cannot act on it, keep collecting it, but the immediate value may still be in your ability to combine first and third-party data for the purposes of conversion and lift.
The first step to any of this is to collect as much first-party data as possible at a visitor level. This allows you to begin building your visitor profiles and augment them with as much third-party data as you find useful. At some point, you should work damned hard to improve overall traveler experiences. In the meantime, there is nothing wrong with focusing on improving conversion and lift to increase bookings while also collecting more and more first-party data that you can eventually act upon.
