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Why good data is critical to the customer experience

Aug 22, 2019

by Francisco Scarpitto, Sales Director, LATAM

I was waiting to board a late-night flight home after a long week, and then came the dreaded announcement: "your flight is delayed". Now with two hours to kill and desperate for something to eat, I went straight for the nearest coffee shop - along with my 250 fellow passengers. The coffee shop staff soon began to struggle with the influx, and it wasn't long before I heard complaints from the other customers. But the employee in charge clearly understood customer service and quickly pacified everyone with a few simple words: "we will give you all exactly the level of service you expect". With expectations managed, customers settled down and the staff proceeded to do what they promised. The result was a great customer experience in trying circumstances.

Perhaps not a remarkable situation, but this little incident prompted a lot of questions for me: how can we replicate this in the B2B travel business? How can we provide the same level of experience in a category that is also defined by the customer’s expectations? And, more importantly, how can we do this without harming profits? At the end of the day, that is what we work for at Expedia Partner Solutions (EPS): the best world-wide travel technology platform, delivering the best end-to-end customer experience, helping our travel partners achieve their growth goals.


Rethinking your commercial KPIs

For hospitality businesses there are many drivers of growth, but they nearly all fall into three main areas: technology, product and post-sales services. And there’s one key performance indicator (KPI) that crosses them all: cancelation rates (CXL).

Look at the equivalent in retail – return rates – and there's a pretty active discussion on it. Yet the subject of cancelation rates remains difficult for travel businesses. I think it’s important to talk about it because traveler cancelations are a big indicator of a problem with overall customer service. The main question here is: do you know your CXL%? Is it aligned with the average of the segment? What is the mix breakdown between suppliers? When you fully understand this KPI it can be a driver of growth for tourism businesses.

In Latin America, where I operate, cancelation rates are often a hard subject to discuss due to the dynamics and variety of segments in the region. From the business side, it’s common to overlook this KPI in favor of the positive – say, growing sales. That's always the most obvious commercial opportunity. But savings can be an opportunity too. In our industry, I think it's still a big one – and starting at the very beginning of the customer journey, data has a big part to play.


The real cost of poor data

To get specific: many travel companies aren’t getting good enough data on cancelations to do anything about them, which in turn, is likely leading to negative customer experiences. If you're processing thousands of bookings per day, but if you’re not getting up-to-date information each time a change is made to one, such as a content update, you're missing essential operational data for basic customer service.

And this opens a wide variety of consequences that will hit your P&L: a refund, a relocation, a penalty with the hotel. Crucially, it’s likely customers won't return if they have a bad customer experience in this regard, losing the investment from acquiring them and increasing marketing spend to recover them. In this case, the lack of a simple process based on customer centricity can cost you both margin and that customer's loyalty. Therefore, there’s a big opportunity to gather more data on cancelations and transform the customer experience into a more positive one.

Let me use a real example. I worked with a travel partner who had cancelation rates of 22%. At the time, the average that I was managing in the same territory and the same customer segment was 17%. I therefore escalated this to the travel partner, and together we identified that the main type of cancelations were from travelers (not hotels). After conducting a survey with their travelers, the travel partner detected that most of the cancelations had to do with a mismatch between expectations and reality due to hotel content not being updated in real time e.g. hotel room photos, extra fees, city taxes, etc.

Because there was a lack of a process to detect this in advance, as well as no visibility of current cancelations rates, the customer experience was at risk. After working together to understand why confirmed bookings were being canceled and applying fixes in the necessary areas, cancelations were reduced to 17%, customers were much happier than before because they didn’t have surprises at the hotel with fees not published and the travel partner rebuilt relationships with hotels.


Focus on the end traveler

At EPS we have touchpoints with our travel partners at every stage of the booking journey, from traffic acquisition to post-sales processes. At every point, the focus is on the experience of the end traveler; that is, our B2B partners’ travelers. Our API, EPS Rapid, relies on this principle, where speed and stability (tech), hotel content quality and real-time information (product), and web services to improve customer service (post-sales services) are the foundation of our relationships.

Cancelations are inevitable. But improvements to the information flowing to your back-end can be a relatively easy win. It's as simple as making customer service the priority of every process, across those three key areas. Going back to that coffee shop, it’s just a matter of knowing how, whatever happens, you'll give the customer the level of service they expect.


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