So what are reasonable steps a firm may take to personalize its service offering? Clearly some on-line businesses record every link a customer clicks and serves up information based on those choices — one need to look no further than one’s Amazon recommendations to see that. But that setting is self-contained; a customer comes to Amazon.com and Bezos’ minions only use what he or she does on the site. Customers generally value the recommendations they receive but might feel differently about it if Amazon actively tracked what they did away from Amazon’s web site.
Which gets us to British Airways. They have been in the spotlight the last few days as a program they call “Know Me” has gotten some press. Here is how it is explained on Marketplace (Your usual extra pillow, Ma’am? British Airways mines passenger data, Jul 10).
Stacey Vanek Smith: British Airways is getting some flak from privacy watchdogs about its new Know Me program. BA will create a little database about business class and first class passengers, including photos from Google images and information gathered during previous flights. Things like the seat or drink you prefer or if you like an extra blanket. BA says it’s just trying to provide better service. This is nothing unique according to Bob Sullivan, a tech reporter with MSNBC.com.
Bob Sullivan: What they’re doing here is taking data that they already own, because they have a relationship with a customer, and data that’s publicly available, and they’re marrying it to find out interesting things, which, frankly, every company is doing right now. …
You and I, and I bet all your listeners out there, you know how often have they really gotten an ad when they were surfing online that was JUST what they wanted? The success rate is actually much lower than the big data people would have us believe. But on the other side the privacy invasions are enormous. And so the cost-benefit to me is really unclear.
It is true that other firms in the travel business have done things along these lines. Marriott is well-known for collecting data on its frequent guests (see, for example, here). They track things like whether a certain guests always ask for extra towels or cannot abide down pillows. For hotel, there are operational benefits in using this data that go beyond merely “delighting” the customer with a room tailored to their whims. By knowing what the customer wants (or at least taking an educated guess at it), Marriott can lay out the room on its own schedule. That is, it can allocate pillows and towels in the early afternoon when things are dead as opposed to scurry to respond to requests coming in right as everyone is checking in. The customer thus gets a personalized experience while Marriott gets a lower cost to fulfill customer needs.
It is not as clear to me what British Airways gets out of this and why it requires going outside of data generated within BA itself. Here is what the company says (British Airways criticised over scheme that uses Google to identify passengers, Daily Mail, Jul 6).
[BA’s head of revenue and customer analysis, Jo] Boswell said the carrier was trying to recreate the ‘feeling of recognition you get in a favourite restaurant when you’re welcomed there, but in our case it will be delivered by thousands of staff to millions of customers’.
The company aims to greet personally 4,500 passengers a day with the system. But is it really necessary to provide great service? For example, do they change what drinks or meals they stock on the plane based on past customer choices? I kinda of doubt it. Even in first class, they are not recording whether a customer asked for a Coke or a Pepsi.
The question then is whether customers really value being greeted by name at the door of the plane. Once passengers are seated, the crew knows from the passenger list who is where. Any past information about whom should get special attention can then be matched with the seat occupant.