Inspiration for the leisure and hospitality industry
converting Big Data into higher occupancy rates
“ A proper Big Data strategy makes it possible to once
again have personal relationships with consumers.”
Stef Driessen
Sector Banker at ABN AMRO
converting Big Data into higher occupancy rates
Big Data: game changer of leisure- and hospitality branch Launch and learn. 05
Tjingo puts together virtual travels from international databasesVirtual Touroperator clusters ‘On the Fly’. 07 Customer profiles Center Parcs increase conversion of its website and marketing campaignsThe power of personalized communication through the internet. 09
Combining customer data and social media makes KLM fly high The battle grounds have moved beyond the planes. 12
converting Big Data into higher occupancy rates
“ Big Data does not necessarily equal ‘Big Projects’.
An excellent strategy is to start off small and keep
things manageable, so you can learn and develop.”
Stefan van Duin
Director Business Analytics
4
The Economist Intelligence Unit in its research report
examples ‘Big Data: Harnessing a game-changing asset’
predicts a new era. Any businesses capable of tapping
into these valuable raw materials will increase their
lead on the competition. A sharp focus on data can
thus contribute to considerably higher occupancy rates.
Outsmart the other market players in anticipating major
developments in the industry. Or lead to considerably
shorter queues thanks to the accurate mapping of visitor
flows. Optimizing business processes through improved
knowledge of processing times, too, offers many benefits.
The biggest gains for the Dutch leisure industry will most
likely be a deeper insight into the consumers’ experience.
It clears the path for developing new business models.
A provider of accommodation services like Airbnb and
the taxi service Uber are great examples of such new,
data-driven leisure companies.
Personal relationships with customers Entrepreneurs used to have personal relationships with
their customers. Growth in scale has increased the strain
on such relationships. New technology, though, may
very well restore this. The key to this development is
the massive increase in consumer data – both in internal
databases and in the social media. It swells by half a
billion Tweets and 4.5 billion Facebook Likes a day.
By aggregating and analysing this data, companies have
increased their capabilities to identify their main customer
segments. Next, they can map customer preferences,
wishes and needs within these segments. What does
the target group expect from a product? What are the
thresholds or obstacles and what would make life more
comfortable for customers? The strategy is to fully focus
on increasing the relevance of communication and
product. In doing so companies abandon the standard
marketing campaigns, instead increasingly committing to
long-term one-on-one relationships with each consumer.
It is the modern marketeer’s Holy Grail: communicating
with the right customer about the right product through
the most suitable channel at the most relevant moment.
A number of concrete steps is required to enable this.
One of the first and most crucial elements is to always
place the strategic objectives of the company at the core
of big data aggregation and analysis – whether these
objectives encompass optimizing the profit, increasing the
number of customers, or enhancing their loyalty. If big
data projects fail to be in sync with a company’s objectives
they often bog down in experiments, with valuable data
being wasted, wrongly applied or collected, and without
having a clearly defined final objective.
Big Data: game changerof leisure- and hospitality branch
Today’s businesses are all digital – this feature certainly applies to the Dutch leisure and hospitality
industry. A growing number of airline companies, hotel chains, recreational parks, museums and
restaurants embrace ‘digital’ as an essential component of their business process. And ‘digital’ equals
‘data’. Big Data: a near endless flow of data growing exponentially every year. A raw material rich with
valuable hidden patterns and insights. Not surprisingly, Euro commissioner Neelie Kroes (IT and Telecom)
coins data as ‘the 21st century’s oil’.
5
‘Launch and learn’Entrepreneurs who want to be inspired will need to prick
up their ears and keep their eyes open. Where do trends
pop up, how do competitors respond, which start-ups
distinguish themselves and what topics can companies
explore to distinguish themselves within the industry?
And an entrepreneur will have to be willing to experiment,
too. Start with small projects, continuously monitor the
results, immediately scale up experiments if they are
successful and spread the knowledge across the company.
And bear in mind: failure is an inherent part of this launch
and learn process. It is both inevitable and valuable.
The added value of data Having a clear sight of their final objectives, companies
can then establish what data they need and where to
obtain this. This would include, e.g., a search for data
already available in the company and finding out which
partners may be approached to provide additional data.
Be very aware of the possibly highly sensitive character
of the data you collect and record. While legislation and
regulations is ever stricter, consumers, too, have become
much more self-confident and critical if their personal
details come into play. Any improper or careless use may
have major implications. Computer game manufacturer
Sony is a glaring example: the leakage of personal
information from its Playstation Network came at a
cost of a 171 million dollars - and counting. And that is
without considering the damage to its image.
A transparent approach towards consumers is vital for
working with personal data. As long as trust and relevant
added value are core values, consumers will nearly
always be willing to surrender part of their privacy.
If consumers are clueless about what companies might
or might not use their data for, such quid pro quo is
doomed to fail. This equally applies if companies are
ineffective in clearly communicating the added value of
the privacy that consumers have handed over. That said,
companies will see the loyalty and expenditures of their
customers grow rapidly if they meet these conditions.
Deloitte and ABN AMRO now present the inspirational
and successful cases of three leading players in the
Dutch leisure and hospitality industry: KLM, Center Parcs
and Tjingo. Their intelligent data use has reinforced the
relationship with their customers and has resulted in a
personalized range of products, a higher occupancy and
likewise margins. Through these cases this publication
seeks to offer inspiration for writing your own Big Data
success story. You are obviously welcome to call on the joint,
in-depth expertise available at Deloitte and ABN AMRO.
Stef Driessen
Sector Banker Leisure
at ABN AMRO Bank
Stefan van Duin
Director Business Analytics
at Deloitte Consulting
6 Big Data: Game Changer of Leisure- and Hospitality-branch
“The market forces us into the tour operators’ seat,” says
Robert Schmidt, manager of online travel provider Tjingo.
“Their network of providers has taken many years to build.
Dynamic packaging is the automated alternative for this
essential network. This new technology profits from the
rise of vast databases in the international travel world.
In layman’s terms, it creates a platform for providers
from various travel clusters where they can interlink
their offers. Carriers and local travel experts linked to
real time accessible databases offer a mix of millions of
hotel rooms, flights, excursions, transfers and other travel
services. Examples are the well-known hotel booking site
Booking.com and large flight generators such as Amadeus
and Saber.
Virtual Tour OperatorsConsumers can use a dynamic packaging platform to
cluster these separate travel services, ‘On the Fly’,
which services are carried out by different providers.
No longer are they bound by the tour operators’
preassembled standard packages. They can arrange a
trip based on what they prefer. Organizations like Tjingo,
which facilitate this, are called Virtual Tour Operators.
The technology is quite complex. It involves searching
the gigantic hay stack hiding, which contains a myriad
of travel components. Only a few tiny puzzle pieces
need to be selected and they need to fit hand in glove,
at a competitive price. Schmidt: “Bear in mind that the
applications often run into the thousands per second.
You will then understand just how big of a challenge it
is to offer impatient consumers the trip they are looking
for within mere seconds.”
The major changes in the travel industry have yet to settle down. Experts estimate the value of the
European travel market as a whole at 250 billion euros. As research by McKinsey shows, some 40
per cent of this turnover is realized online, while in America this is already well over 50 per cent.
So, the online travel industry still has an enormous growth potential. The pressure on traditional tour
operators, though, is mounting. And this is felt throughout the industry. Since many of the providers do
not purchase and package hotels and flights themselves, they depend on travel packages offered by tour
operators. And as more tour operators vanish this well runs dry. What’s more, the fees are dropping.
Tjingo puts together virtual travels frominternational databases
7
Various distinctive options are available to utilize the fast
connection and analysis of large quantities of data. Using
the data collected from transactions booked earlier will
considerably increase the speed of the service. Every
time the platform puts together a trip for a customer, the
specific data, whether this concerns the price or otherwise,
is recorded and analysed in the in-house database.
Thanks to the knowledge collected in these so-called
price grids, each subsequent application will result in a
more effective search while the customer service is
accelerated as well. “And the faster the service, the
higher the conversion,” Schmidt emphasizes.
Trumping the competition As more and more parties have access to this technology,
providers will have to look for new possibilities to be
distinctive. “A detailed insight into the customers’ wishes
and interests is vital to that end,” says Schmidt. “We
closely collaborate with our sister companies Zoover
and HolidayCheck and – each and every day they receive
thousands of travel reviews and related content.”
A link with this information to its own well-stocked
booking database, means Tjingo can identify inchoate
travel trends among consumers, and their relevant
preferences. It can anticipate this quicker than the
competition does. This may involve the rising popularity
of a region or accommodation but other elements, too,
through which a travel provider can distinguish itself.
Analysis of price developments and search questions in
Google make travel providers highly capable of producing
well-defined forecasts about how air travel will develop.
An American travel provider has recently started to share
this knowledge with its customers through a ‘price
forecast’ incorporated into the website. Customers can
use this information to determine whether they will book
their trips immediately or whether to wait until the price
has dropped. “This creates a fiendishly complex little
game,” Schmidt says. “The abundance of variables that
could directly impact the margin you may charge as a
provider is partly to blame. The main lesson is: check your
data extremely well and then determine your strategy.
Anyone who is not rigorous about this will see their
margins melt away or their customers go over to the
competition in a heartbeat.”
8
Center Parcs applies complex real time technology to
ensure the communication with its – potential – customers
is as relevant as possible. “The average internet user
has a rather limited attention span,” says Rob Boeyink
of IQNOMY, the company supporting Center Parcs
in personalizing its online customer communication.
“Since the time they are likely to spend on your
website is relatively short, the trick is to provide them
with as much relevant information in the shortest
possible time slot. Fail to do so and they will usually
be gone in a flash.” All visitors of the Center Parcs
website are profiled anonymously in real time to
prevent this from happening.
In a split second all signature features are linked to a
database of hundreds of thousands of earlier visitors.
The information examined includes the preferred date
of departure and the number of persons. Other websites
visited, any interests that can be derived from this,
and the behaviour during any earlier visits to the Center
Parcs website – all of this is scrutinized. Have internet
users visited the homepage only briefly, or have they
looked at information on specific recreational parks or
preferences?
Smart algorithms All available information is immediately added to the
anonymous interest profile of the visitor. IQNOMY has
coined this process real-time multidimensional profiling.
Smart algorithms use this profile to select the most
relevant information for each visitor. The website is
divided into separate fields, into which variable content
can be uploaded. This creates the option to provide certain
visitors with information on the many recreational
possibilities for children.
customer profiles Center Parcs increase conversion of its website and marketing campaigns
The selectiveness of online consumers is rising and their filter options are expanding. Many consumers
have even become blind to the profusion of ads they are offered through online channels. The marketing
world refers to this phenomenon as ‘banner blindness’. Hence the rising need to offer consumers
relevant information. As yet few Dutch companies use the power of personalized communication through
the internet.
9
Other visitors, on the other hand, may thus obtain
information on water sports facilities, the lush nature
surrounding a specific bungalow park, or the possibilities
of a romantic weekend. Boeyink: “Each visitor will thus
get to see a unique website, geared to their specific
preferences and interests as much as possible.”
Real Time Bidding The technology behind all this is called Real Time
Bidding (RTB) or the automated, real time auction of
online ad space. Advertisers and website owners
subscribe to a high tech bidding platform. When an
internet user visits one of the subscribed websites,
the ad space available is auctioned off in seconds.
So, showing a single ad to a single internet user
– a so-called impression – is what’s at stake during
the bidding. The platform offers advertisers all the
information they need to assess the value of the
impression available.
Once again, visitors’ demographic data is linked to
knowledge about the interests and the surfing history
of internet users gathered from various databases.
Refined algorithms weigh the data available and
determine whether Center Parcs will join the bidding
and up to what amount. Similar algorithms separately
align the content of the ad with the preferences recorded
during an earlier visit to the Center Parcs website.
“Ever since the relevance has been enhanced the
number of people who have clicked on to personalized
content blocks has risen by an average 460 per cent,”
Boeyink states. “This has considerably increased the
number of bookings.”
More turnover, greater customer loyalty He expects personalized communication to have an
even more significant effect in the longer term.
“New insights enable organizations to gear their entire
product and services to the customer,” is his prediction.
10 Customer profiles Center Parcs increase conversion of its website and marketing campaigns
“It allows Center Parcs sharper anticipation of the
customers’ needs embedded in hard data instead of
having to go by hunches of responsible managers.
This data may be tapped from the location data of
mobile telephones, as they show which areas and
attractions of a recreational park are visited most.
This is still a major leap of faith for many organizations.
One that will, however, be rewarded with extra
engagement, customer loyalty and, thus, profit.”
11
Maintaining contact with the passengers throughout the
customer journey is the key issue. Offer service, inspire,
continue to be top of mind and, above all, get to know
customers better. Social media offer the perfect
opportunity to that end. Before April 2010, KLM still
only used its Facebook and Twitter accounts mostly as
experimental marketing tools. And then, as an Icelandic
volcano erupted and spewed out a giant ash cloud, these
channels provided entirely new avenues to explore: an
effective source of information for the tens of thousands
of stranded travellers. “It goes to show that a crisis
often generates new opportunities too,” says Robertjan
Groeneveld, KLM’s Social Media Hub Manager. “Making
the initial business case for an integrated social media
policy is usually a tough thing to do. Now though, nobody
within KLM has any doubts about the added value.”
Platform for flow of information Facebook and Twitter have by now become the platforms
on which 130 agents respond 24/7 to the 30,000 odd
KLM related reports per week, in ten languages. Without
the proper technology this would be an impossible task.
KLM closely collaborates with Salesforce since 2011.
Just like a growing number of other technology parties
the American market leader provides a platform for
collecting, linking and analysing huge amounts of data –
personal and otherwise. As this platform spots urgent
messages early on, too, priority processing is possible.
Using this scalable solution, KLM can process some
3,500 cases involving issues like delays, changing flights
and lost luggage. Agents can respond within the hour,
thanks to a colossal database of cases handled.
“Nevertheless, our goal is to shortly reduce this to thirty
minutes,” Groeneveld emphasizes.
This is merely the visible part of KLM’s social media
strategy. Behind the scenes, the airline company
combines all passenger and related data. The resulting
database has some hundreds of thousands of customer
profiles by now. When passengers log in, for example,
through the Flying Blue loyalty program or their social
log-in, a Customer API supplements the profile with
personal preferences, interests and other relevant data.
Do customers have many Facebook friends in a certain
country? Do they open special-offers mailings? Does
their click behaviour in iFly – KLM’s digital magazine –
indicate a strong preference for tropical beach holidays?
If so, the platform will provide this information to the
marketing department, where the information is put
to use for specific offers that appeal directly to the
experience of individual passengers.
combining customer data and social mediamakes KLM fly high
Few industries are caught up in such fierce competition as the aviation industry. And while the need
to offer added value is strong, the opportunities to do so are few and far between. Passengers often
check in at the same counter, board the same type of plane, their seats are almost identical and they
more or less enjoy the same meals, services and inflight entertainment. Air travel thus threatens to
become a commodity and the only thing left for providers to do is compete on price. To avoid that
scenario, the battle grounds have moved beyond the planes.
12
Online service continues inside the plane Any issues or complaints passengers may have can
likewise be tackled in an efficient and relevant manner.
“In the old days, if passengers had trouble checking in,
we first had to ask for their booking code,” Groeneveld
relates. “Now we can immediately send them an email
that we have checked them in online: ‘Your boarding pass
is in your mail box.’ What’s more, our cabin staff is
equipped with iPads nowadays, so we can send them
relevant information about passengers. Hence, thanks
to these on board iPads our online services are now
available inside the plane, if necessary.”
KLM’s comprehensive data strategy affects the
organization at several levels. Groeneveld: “Our
customer-oriented communication has increased the
brand awareness tremendously, especially with our
target groups in Asia and the United States. Apart from
the media attention generated, this is largely due to
numerous positive customer responses. They spread
through the various social media like wildfire – in parts
of the world where our name sounds less familiar.”
A great world stage performance for a relatively small
Dutch player. Using Salesforce, KLM immediately
channels this feedback to the departments involved.
They experience this as highly motivating. “Where
departments used to operate in silos, this binds them
together,” says Groeneveld. “Many new campaigns
and initiatives have now become a joint effort.”
13
Anticipate future customer preferences now Analysis of the total quantity of data collected produces
a great variety of important insights too. It encompasses
issues like how the organization functions and how
customer preferences and behaviour can help optimize
the turnover. Among the tools available to that end are
smart algorithms: they can calculate the best possible
seat capacity for each flight and the best possible ticket
price for each specific customer. Groeneveld: “Over time
we create a ‘360 degrees view’ of our customers –
knowledge we will increasingly use proactively.
This will result in seamless customer journeys, during
which we offer each separate customer the most
relevant content available at the right time, for the right
destination. It likewise allows us to right now anticipate
future customer preferences and needs.”
14 Combining customer data and social media makes KLM fly high
15
DisclaimerABN AMRO considers the opinions recorded in this publication to be based on reliable data and information, which have been carefully processed in our analyses and forecasts. Neither ABN AMRO, nor any of its officers may be held responsible for possible inadequacies in this publication. The opinions and forecasts reflected represent nothing more than our own vision and may be changed without any prior notice.
©ABN AMRO, February 2014This publication is solely intended for internal use. The use of text parts and/or figures is permitted, provided the source is clearly mentioned. Multiplying and/or disclosing this publication is prohibited, unless written authorization has been obtained from ABN AMRO to do so. Texts were closed on 4 February 2014.
Thanks toGert Wim ter Haar and Robertjan Groeneveld (KLM Royal Dutch Airlines)
Robert Schmidt (Tjingo, de Vakantiematser)
Christian Vriens (IQNOMY)
Fleurine Mijinke, Kees Schilder and Hidde Rijntjes (Deloitte, Tourism, Hospitality & Leisure).
Wouter Sterk, Jan Hein Endlich and Pieter van Ginkel (ABN AMRO)
Commercial contacts Stef Driessen, Sector Banker Leisure at ABN AMRO, tel. 06 539 853 29
Stefan van Duin, Director Business Analytics at Deloitte Consulting, tel. 06 - 12 34 44 57
Editorial staff Arnoud Groot
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