The transition from knowledge to wisdom in the airlines industry

Having 3.4 billion passengers carried by airlines in 2015, over 300 operating airlines around the world and those numbers rapidly growing, it is undoubtedly crucial for all players in the industry to stay on top of the game and keep increasing their revenue (The World Bank, 2016). In order to reach that it is extremely important to know as much as possible about their loyal and potential customers as well as to use that knowledge efficiently and turn it into a tool which helps to manage the customers in a smart manner, which would benefit the company. But how do you do that?

First of all, it is crucial to know which data you must collect from your customer and which facts about them help the airline best to understand the passenger. This would include all basic information such as name or contact information, which is easily collected during the booking phase and already introduces the customer. Knowing communication channel preferences and communication history enables the airlines to provide the customer with the most relevant information in its most preferred manner without being repetitive or inefficient (Peelen & Beltman, 2013). Categorizing the customers into different segments is another crucial step towards customer knowledge, as well as knowing their previous travel experience with the company, transaction history, meaningful life events, general satisfaction and every single detail that could be possible gained from communication with the specific customer. (Peelen & Beltman, 2013)

All this gathered data combined creates customer knowledge, which, if used properly, can be transformed into wisdom – the utilization of accumulated knowledge. (Wu, 2000) When transformed successfully, the company can highly increase its customers’ satisfaction and possibly drive revenue by creating loyal customers. Delta is one of the airlines that definitely transfers its customer knowledge into wisdom. For example, it uses customer’s data received during booking process, routes flown or credit card spending and creates customer’s demographic profile, which is used for personally tailored promotions. It might sound as a casual strategy of the majority of carriers nowadays, however they took one step further by cooperating with American Express and introducing Delta American Express (DAE) card. If a customer, who has previously travelled with Delta, purchases tickets with other airlines using DAE, Delta takes immediate actions and sends customised promotions to win the customer back. (Sean, 2015) Thus, in case of losing a customer, Delta creates an opportunity to get it back and therefore makes the competition in the industry slightly more intense.

All in all, it is never enough to know who your customers are by simply gathering as much information as possible. It is critically important to be able to transform that knowledge into the companies’ wisdom and only then the data will actually be valuable and beneficial to the company. Also, airlines should not forget that customer’s privacy is of the utmost importance and therefore all data should serve as a tool to create personalized service without making their customers feel as they are being spied on.

 

Bibliography

Peelen, E., & Beltman, R. (2013). Customer Relationship Management. 2nd.

Sean, L. (2015, November 22). Digital Innovation and Transformation. Retrieved from Big Data Takes Flight at Delta Airlines: https://digit.hbs.org/submission/big-data-takes-flight-at-delta-air-lines/

The World Bank. (2016). Air trasnsport, passengers carried. Retrieved from http://data.worldbank.org/indicator/IS.AIR.PSGR

Wu, J. (2000, November 22). Information Management. Retrieved from Business Intelligence: The Transition of Data into Wisdom: http://www.information-management.com/infodirect/20001122/2524-1.html

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