“If we have 4.5 million customers, we shouldn't have one store. We should have 4.5 million stores,” said Jeff Bezos, the founder and CEO of Amazon, more than 20 years ago. Today, these words are even more topical. The overload of digital information has made people more selective, which has created additional barriers for companies to master on their way to success.
A survey from Researchscape International reveals that 88% of business representatives believe their prospects expect a personalised experience. As one of the most dynamic areas, the travel industry caught the wave of a new approach to customer services. Today, personalisation in tourism is not just a marketing tool, but a business priority that is changing the model of doing business.
Customers expect highly relevant, personalised options so they can spend less time searching - firms should provide these unique options to each client. The question is, how many companies will be able to adapt and reinforce their market positions using a personalised approach?
What’s on the market?
The remarkable expansion of the travel sector started ten years ago, and recent research confirms the subsequent growth, revealing new opportunities for companies. The World Travel & Tourism Council provided an assessment of the situation on the global market of travel services; the presented statistics highlight the total contribution of Travel & Tourism to GDP was £6330.67 billion (10.4% of GDP) last year. This is forecast to rise by 3.8% per annum, to £9527.87 billion, by 2028.
Is this enormous market going to become even more significant? Definitely yes! This year alone, the investment in travel was £675.29 billion, or 4.5% of the total investment. It should increase by 4.3% per annum over the next ten years, to £1077.75 billion, and reach 5.1% of the total investment.
Current Business Challenges in Travel
A growing market requires greater effort to reach an audience of loyal customers who ensure regular income. A large number of proposed solutions on the market cause several challenges in the travel industry, which can wipe out all business and marketing efforts, or, conversely, may become a considerable driving force:
- Customer Engagement and Retention
If customers purchase your services once and like them, it doesn’t mean they will come back again. Every day, a huge number of other companies provide excellent new offers, closer to people’s needs, so even the most influential market players are afraid of losing their customers.
- Brand Awareness
A vast variety of existing companies, as well as a significant number of new start-ups, make brand awareness really challenging. How do you make sure people know about your company and love it?
So, what is the driving force for struggling with business challenges? When thinking about customer satisfaction, firms order custom software development services, invent new business models, or implement tech improvements to make market mechanisms work, which is how new trends come into existence.
Personalised Travel Experiences vs Mass Market
Starting with Amazon in the 1990s, personalisation has become an ever more powerful tool in business and marketing. It is relatively stable in retail, but the travel industry is still in the early days of personalisation, which has arisen from differentiation as an opposite approach to mass market appeal. What is better in the travel business: offering the same options for a broad audience or creating special offers for a niche group of people?
The mass market approach is applicable to some standardised products due to its wide audience reach, while personalisation is appropriate for differentiation strategy. Despite greater costs and the necessity of a technological base, personalisation allows companies to gain higher marginality and better conversion rates. One more argument to be in favour of personalisation is its potential to resolve challenges regarding customer engagement and retention.
Some companies provide a partly personalised experience, while others build business models entirely based on personalised approaches. Trip Advisor makes suggestions and offers deals to customers based on their search history and user input. Holiday rental company Twiddy added price recommendations for landlords, depending on market conditions and seasonal trends, as well as the size and location of the house. Expedia went even further – we will cover their innovative approach later.
Returning to investment in the tourism market, a recent survey by Researchscape International shows that 97% of respondents plan to maintain or increase personalisation costs. Therefore, companies are committed to, and understand, the fact that they need to pay for personalisation. Next, we will take a closer look at the reasons why companies are willing to accept such changes.
What is personalisation?
Robert Tas, the vice president of McKinsey & Company, in his interview to CXOTalk, said of personalisation, “the way I buy a car and the way my wife would buy a car are very different.” The personalised approach takes this difference into consideration and provides various experiences to customers using data about their behaviour. This is the moment when technology makes it possible; personalisation software analyses customer interactions through all the channels companies use and exploits it to create a personalisation strategy.
According to Deloitte research, the travel industry is the first area where people are willing to wait for customisation. While the realisation of personalised solutions takes time and money, some companies have doubts about its implementation. Why should they accept personalisation software?
Keep close to customers
It allows companies to recognise the different stages of the customer journey and automatically makes individual offers based on the customer’s current needs, preferences and previous experience. Integrating the offered solutions with current customer needs helps to increase the average order value and make clients loyal.
Increase the number of conversions
According to statistics, special offers are much more effective than ordinary pricing. A Deloitte study reveals an average of 36% of consumers expresses an interest in purchasing personalised products or services.
Segment research highlights that 44% of customers will likely repeat the purchase after a personalised experience. Personalisation is one more way to build an emotional connection between customers, the products they consume, and providers.
If you accept personalisation, you must then choose which level to provide. The first level, which is the easiest to manage, includes personalised emails and social media campaigns. The second level involves content customisation by location or tracking users’ IP address. The third level can be implemented only with specialised software. It involves account customisation, where users can personalise content once they have created an account. In addition, this level can include tracking user behaviour, providing related content recommendations, and offering adapted search results.
How does personalisation software work?
Before starting the implementation of personalised customer experiences into your practice, ask yourself which channels your company uses to engage customers. You also need to know how they interact with these channels, and which inconveniences they have. If there are a few channels you use, try to imagine how to unite the customer experience by handling them all in one seamless process.
After you have got an understanding of the current state, develop a strategy to reveal your approach to personalisation. This strategy may consist of the core characteristics that influence the content you are going to provide. This strategy will be the basis of the personalised customer experience.
Let's imagine the usual process of user interaction with a search bar on the website, for example. The user makes a search, then a programme creates a request to its database and provides the needed data. It is drawn in a very simplistic way, but the essence is true. But how does the personalised approach work?
Stage 1. Collect users’ data
When the user interacts with the website, the data about their actions, including search filters used, pages visited, the type of service, location, and so on, syncs up to the database. The database is divided into three parts: non-personalised data that is used when we don’t know customer’s needs yet, user’s data that is used by machines to create criteria for personalisation, and relevant data for particular users.
Step 2. Process data by machines
After receiving the information about a particular user and transferring it to the database, machines analyse the data array with set frequency to show customised search results to this user.
Step 3. Generate relevant offers
The more data the machines analyse, the more precise the criteria will be when determining relevant responses to requests. Based on the data, you can also provide additional services connected with the customer’s choice. For example, the customer chooses a tour to Paris, so you can offer activities or car rental in this city.
Step 4. Providing relevant search results
When customers interact with this service for the second time, they get personalised recommendations and results according to their previous behaviour. People who are looking for family resort won’t be provided with adventure tour offers to the mountains.
Real Time Personalisation Software: is it worth that?
Most marketers point out the importance of providing real time customisation experience. Of course, it has crucial benefits, such as providing targeted offers during the first interaction. The probability the customer will make a purchase is higher, but it is rather challenging to implement real time customisation.
In this case, overload on the website or mobile app is the main problem. To reduce the time the customer spends waiting for the results, companies have to invest a lot of effort and money. Decision makers should be aware of the benefits and be able to use them wisely. However, they should not forget that, in real time, it may take greater resources to achieve the desired result.
Almost everyone perceives Expedia as one of the most famous travel booking platforms worldwide, providing the ability to book airline tickets, hotel reservations, car rentals, cruises and holiday packages. The CTO of Expedia Engineering, Murari Gopalan, said, “Online travel is a hard nut to crack.” Maybe this attitude is what made the team take up the challenge and implement real time personalisation.
Expedia has three components of seamless personalised experience for their customers. The first is search results and recommendations presented in accordance with users’ search history and account data. The next is providing a list of all bookings, with helpful trip alerts for flight delays, gate changes and more. Finally, Expedia engages customers with a loyalty programme and encourages them to use the mobile app by offering doubled bonuses.
Expedia obtained this competitive edge with Scratchpad by MongoDB. It makes the note-taking process automatic, intelligently tracks searches, and allows shopping via any device. So, the travel search process with Expedia is fast, easy and personalised, which positively influences conversion rates while minimising bounce rate.
On average, over 49 million people visit the Expedia website during the course of a month. Moreover, users left about 600 thousand total reviews on the App Store and Google Play. Half the traffic is direct, which indicates loyalty and brand awareness.
You might say that Expedia is a huge company, and its example is not applicable to medium sized companies. To some extent, yes, you are right. The processes taking place in large companies are significantly different from the processes of small companies. However, even your neighbour, who owns a small hotel in a small town, can adopt a personalised approach. By providing even a common personalisation experience, companies become closer to their audience and strengthen their positions.
To outline, personalisation is not new for us. Today, it is becoming increasingly relevant, and companies are trying to make the most of its capabilities. Custom software development for personalisation helps you to make every customer feel special, even when your audience is huge.
Sometimes, personalisation can be overused and becomes annoying - this is even worse than not using a personalised approach at all, and you have to be conscious of it. The recent Gartner research emphasises two key points of customer impression on personalisation - “prove you know me” and “help me”. The second is the most valuable because it doesn’t scare customers.
Sometimes you don’t even need personal information about your customers. Customise content on your website by one simple question, such as “Are you planning a holiday or business trip?”. Offer a list of local destinations and discounts for excursions for the person who has booked a tour to Barbados. Send push notifications and reminders about upcoming flights, delays, or other events. Be a good friend to your customers.
As one of the most promising markets, travel and tourism requires competitive advantages. By investing in travel software development, you create these benefits and they are worth every penny.