How Airlines interact with their customers through Digital Marketing.

In order to satisfy consumer needs and improve interactions with customers, digital marketing has become highly important for the airline industry. Digital marketing is applied from, the moment the customer is searching for places to go on holidays, booking on a mobile phone or computer, to the moment they are boarding using the app of the company as boarding pass on their mobile or even Google Glass.

There are several digital marketing strategies applied by the airlines. One very frequently used is email marketing. Ryan and Jones (2009) highlighted the importance of customer relationships management when using email marketing strategies. According to them, by using CRM technologies, companies can segment target lists, allowing them to focus highly targeted campaigns to the customers most likely to respond. The company can fine-tune its email offerings and align it with its customers purchase history. In the case of the airlines industry, for example, American Airlines uses triggered-email strategy to remind consumers that had add a booking to the cart but haven’t purchased the ticket yet. In this email American Airlines provides the lower prices and the best offers compared to the option abandoned in the cart.

Experian has searched some interesting facts about email marketing in the airlines, for example, the winter email campaigns generates the most clicks due that the people want to spend holidays in warmer destinations. Another fact is that Airline loyalty mailings have high customer engagement with a 72 percent lift in unique click rates for loyalty mailings compared to non-loyalty mailings.

Nowadays the presence of any company in the social media is an essential channel to deliver promotion, information and to interact with consumer. In the airlines industry there is a new trend called “Social Seating” . Airlines are increasingly allowing passengers who opt-in to share their social media profiles and use others’ to pick their seatmates.
A company launching a successful digital campaign that had over 1m YouTube hits was  British Airways with its cross-channel campaign, Magic of Flying, that connected with consumers through an interactive billboard campaign. The key to the campaign’s success was its call to action – the hashtag – which encouraged people to go to its #lookup branded site.

Another way in which airlines enrich interaction with consumers is through online booking and check-in. This not only improve the customer experience but its also provide the company with wide customer data that can be use for future marketing campaigns such as mailing.

However, many companies have been criticized because of use of passengers data. For example, Delta Airlines mentioned this subject and received negative responses. When customers found that their personal information was programmed onto Delta’s website, they were less than pleased.

The goal for airlines, however, is to deliver  a better experience. Imagine the flight attendants with tablet computers researching the people on the flight. Some is beneficial- allergies, preferences, and nationality may affect the food they serve to each flier.

Some high cost airlines are offering new technologies to interact with their customers. Virgin Atlantic for example, was the first airline offering air travellers to experience the benefits Google Glass technology as they arrive at London Heathrow airport, in an innovative pilot scheme that started in 2016. Concierge staff in the airline’s Upper Class Wing will be using Google Glass and other wearable technology to deliver the industry’s most high tech and personalised customer service yet.
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American Airlines has also implemented WIFI on board in order to keep interacting with their customers when they are on board and also keep satisfying passenger needs. For only $19, American Airlines passengers can enjoy of this service all flight length.
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References:

Experian, (2014). Email Marketing Trends. [online] Available at: https://www.experian.com/assets/marketing-services/white-papers/ccm-travel-industry-email-marketing-trends.pdf [Accessed 1 Feb. 2016].

OnSpot Social, (2014). Airlines Turn Digital Marketing into Data Collection. [online] Available at: http://onspotsocial.com/digital-marketing-turns-data-collection-major-airlines/ [Accessed 1 Feb. 2016].

Ryan, D. and Jones, C. (2009). Understanding digital marketing. London: Kogan Page.

Smart Insights, (2015). Digital Marketing in the Airline industry. [online] Available at: http://www.smartinsights.com/b2b-digital-marketing/b2b-strategy/digital-marketing-in-the-airline-industry/ [Accessed 1 Feb. 2016].

the Guardian, (2014). Five brands leading the way in omni-channel marketing. [online] Available at: http://www.theguardian.com/media-network/2014/nov/28/omni-channel-marketing-john-lewis-british-airways [Accessed 1 Feb. 2016].

How companies can increase sales whereas reduce costs by using digital marketing strategies? Airlines industry example.

A business can develop its online marketing strategy for very little cost and can potentially replace costly advertising channels such as Yellow Pages, television, radio and magazine and other conventional marketing strategies that can be expensive and time consuming. The essence of this approach is to leverage the excitement around a company idea via free/low-cost platforms and to interact with consumers in a more effective way. Examples of how digital marketing and certain technology can reduce overheads involve techniques such as website-to-back office system integration, allowing users to personally update their profiles and linking to their CRM. In turn, this reduces any off-site administration costs.

The above is just one example. There are many ways that using the internet can save on overall company costs. For instance, switching from printed newspapers to online versions, or getting rid of direct mail and opting for email marketing.

According to Chaffey and Ellis-Chadwick (2010), this benefit is delivered and achieved through online e-mail communications, sales and services transactions to reduce staff, print and postage costs. Saving also accrue through web self service where customers answer queries through online content.  Some typical strategies mentioned by Chaffey are:

-Generates 10% more sales for same communication budget

-Reduce cost of direct marketing by 15% through email

-Increase web self-service to 40% of all services enquires and reduce overall cost-to-serve by 10%

 

The Airlines industry:

The airline industry is taking advantage of lowering cost by the use of digital marketing, especially low-cost airlines which are always seeking to offer the best price to their customers and keep to the minimum all possible operating costs. For example, low cost airlines practice direct sales of air ticket or through online reservation and buying. A cost cutting strategy would be implementing by low cost airlines to keep their cost low and to have cost advantages.In the airlines industry, the application of digital marketing is very easy to perceive since they show how organisations can use online communications such as their website, third party websites and email marketing in the following way:

-Direct response medium: Airlines use sponsored links when a user is researching a flight using a search engine to prompt them to directly visiting the airline website site by clicking through it.

-Platform for sales transactions: online booking.

Relationship building: Medium where the airline can interact with its customers to better understand their needs and publicise relevant products and offers. For example: Easyjet uses its email newsletter and tailored alerts about special deals to help keep its customers and engage them in dialogue to understand their needs through completing surveys and polls.

Another Example is Ryanair. This is Europe’s favourite airline committed to offer the lowest fare by following its operations in a the lowest cost model possible. Ryanair distributes accommodation travel insurance and most of its services through its official website. This enables Ryanair to increase sales while reducing unit costs. Ryanair encourages passengers to do a online check-in with no charge as they charge extra for doing the check-in at the airport and as result, internet bookings account for 99% of all reservations. It also offers discounts on its website on pre-assigned seats, extra bags, boarding card issue and so on. (O’Higgins, 2010)

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Adopting these online services allow Ryanair to reduce its staff number to the minimum and to save €50 million per year.

 

To conclude, a well-implemented digital marketing strategy can enable companies to reduce costs, improve interaction with customers and increase sales. In the case of the airline industry these strategies are growing its adaprtion and are crucial for low-cost airlines as they are always trying to minimize cost and offer the lowest fares for their customers.

 

References

Business 2 Community, (2016). 5 Ingredients for Airline Online Marketing Success. [online] Available at: http://www.business2community.com/online-marketing/5-ingredients-for-airline-online-marketing-success-0301240#8vsw3q3BAYcrU6di.97 [Accessed 1 Feb. 2016].

BusinessZone, (2013). 10 Benefits of Digital Marketing v. Traditional Marketing. [online] Available at: http://www.businesszone.co.uk/community-voice/blogs/robbo75/10-benefits-of-digital-marketing-v-traditional-marketing [Accessed 1 Feb. 2016].

Chaffey, D., Ellis-Chadwick, F. and Chaffey, D. (2012). Digital marketing. Harlow: Pearson.

Marketingmagazine.co.uk, (2016). Low cost airlines rise above low-fares marketing focus. [online] Available at: http://www.marketingmagazine.co.uk/article/1089343/low-cost-airlines-rise-above-low-fares-marketing-focus [Accessed 1 Feb. 2016].

O’Higgins, E. (2010). Ryanair: the low fares airline-future destinations? Case Study. [online] Staffordshire University. Available at: http://www.staffs.ac.uk/sgc1/faculty/blb10089-3/documents/RyanAirCase.pdf [Accessed 23 Jan. 2016].

Smart Insights, (2015). Marketing a start up company on a low budget. [online] Available at: http://www.smartinsights.com/digital-marketing-strategy/marketing-a-start-up-company/ [Accessed 1 Feb. 2016].