Enhancing Customer Experience and Growing Revenue with Artificial Intelligence
A large part of the airline industry’s success has been the ability to do what many industries have yet to figure out. One such ability that’s emerging in the industry is how to optimize revenue with artificial intelligence (AI).
Airline revenue optimization is becoming increasingly difficult due to several factors, not the least of which is an uptick in entrants to the low-cost carrier segment and an expanding list of competitive in-flight amenities.
With fierce competition and market volatility, airlines must continue looking forward, and evaluate new ways to maximize revenue and deliver superior customer service.
As ecommerce strategies and CRM systems adapt to changes in buying preferences, the inability for airlines to implement effective dynamic pricing will emerge as one of the biggest obstacles to realizing a modern commerce strategy in the era of digital transformation. Enter sophisticated dynamic pricing science for airlines powered by AI, machine learning and cognitive algorithms. Advancements in AI are transforming how companies around the world do business and for airlines, these merchandising engines are providing far more than just a seat.
AI dynamic pricing technologies unlock previously untapped data and enable more informed decision-making across the airline industry. In fact, dynamic pricing technology powered by AI can help pinpoint buying patterns so precise and accurate that airlines can synchronize their pricing strategies in real-time and present the right price at the right time.
To optimize airline revenue management, organizations need an approach that provides fair pricing and a quick and easy buying experience:
Create the Right Offers
Create the right offer for the right customer at the right time by treating each buyer as a “segment of one.” Personalized and customized offers based on the intelligence gained from algorithmic analysis creates more impact in competitive market segments. Carriers that deploy AI-enabled dynamic pricing science are, for the first time, able to offer products that are specific to each individual customer. Gone are the days of random offers; today is the era of personalization.
Efficiently Deliver Pricing to the End Customer
One of the major sources of friction when buying airline tickets is that fares and seat availability generated from a GDS or OTA can often be stale, causing frustration among customers about flight availability and real-time pricing when they attempt to book. In fact, it’s one of the factors that increases an airline’s look-to-book ratios. Optimized pricing can only be effective if both the sales teams and the channel are empowered to access and use price recommendations. Tools that allow airlines to deliver accurate pricing to sales at the time they deliver a quote – extended across all direct and indirect sales channels with the same capabilities – are essential in creating a consistent sales experience, no matter where or how customers buy.
Track and Analyze
Effective airline pricing strategies require systems to assess hundreds and thousands of internal and external factors. They also require data points to create the deepest segmentation, understand customer buying patterns and identify meaningful correlations. With AI-enhanced visibility into customer buying behaviors, airlines can distinctly forecast for booking and cancellations, and then convert the right deals at the right price with greater speed, accuracy and scale.
Modern commerce moves at breakneck speed, which means airlines need to respond to customers with precision and consistency across all channels. According to Forrester Research, 50 percent of deals are won by the vendor that responds first. Static, outdated prices that were once designed to protect margins today represent lost revenue. Dynamic pricing AI technology delivers what modern commerce requires: speedy, financially sound deals that are consistent across channels.
The lynchpin to making modern commerce work lies in the ability to price dynamically based on insights rooted in data science, creating experiences that can accelerate deals and improve customer satisfaction and loyalty. By leveraging AI technologies and embracing dynamic pricing as a foundation for how they sell, airline carriers will be able to synchronize their pricing strategies across channels in real-time and present the right price to the right customer at the right time.
With access to increased information transparency and intelligent decision-making capabilities, airlines can get ahead in this competitive market. The cost of maintaining status-quo selling processes is too high to ignore, and many industries will be disrupted by the uneven pace by which they rise to this challenge. Airlines that innovate their business toward science-driven commerce will be in the best position to capture opportunities previously lost without leaking revenue or sacrificing margin.
The science of the sale is here, and airlines must be “wheels up” on this AI-powered approach if they wish to stay competitive.
If you’re wondering how modern commerce and real-time AI dynamic pricing strategies can help your airline, drop us a line. We're happy to share what we see from our vantage point.