Skift Take
Many of the world's airlines know they're not as good as retailers like Amazon in targeting offers for individual passengers. A lot of carriers want to improve, so they can get the right offer in front of the right person at the right time. But it won't be easy, since airlines often have clunky computer systems.
Just before Christmas, Iberia Airlines sent emails to some customers. If they could vacation anywhere, the airline asked, where would they like to go? And with whom?
Iberia asked customers to go to a special website, where they would share information on their travel desires and contact information for a favored travel partner. A little later, the customer's friend would receive an email from Iberia. "Feliz Navidad," it started, before explaining that the friend had created a special travel-related holiday card, with help from Iberia.
To view it, all the recipient had to do was click on a link. Iberia then put its advertising budget to work, using cookies so the traveler's friend would see banners across the web, suggesting the perfect Christmas gift. "Alejandro's dream is to travel to Bilbao," one might read, "and you can fulfill it." Another might suggest, "It's never too late to fulfill Alejandro's dream. Do it with a trip to Bilbao."
It was a small promotion, running for fewer than three weeks and only in Spain. And it wasn't easy for Iberia to measure its effectiveness, since the airline could only a see a correlation on revenues if a person clicked on the ad and bought tickets. But Iberia's Christmas promotion shows how some airlines are working to target offers not to general market segments, but to individuals. They want to provide the right offer to the right person at the most opportune time — all to generate more revenue.
"It's about relevance," Iberia Chief Commercial Officer Marco Sansavini said in an interview. "I will offer to you what is relevant to you, which is not necessarily what is relevant to your friend that is next to you."
Airlines were among the first retailers to divide consumer groups and price accordingly, charging different fares for the same product based on a market segment's perceived ability to pay. That's why business travelers tend to pay higher fares than leisure customers, even when both fly the same routes.
But with retailers like Amazon and content companies such as Netflix using more sophisticated technology to monitor consumer needs and react accordingly, airlines sometimes struggle to keep up. If Amazon can vary pricing on a whim, according to individual tastes, why can't airlines? And If Netflix can guess, with reasonable accuracy, what movie a person might enjoy, shouldn't airlines know where a traveler might fly next? Or shouldn't an airline know what ancillary option a loyal traveler might
