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Flying High on Predictive Analytics

Posted by Amy Maret

Thu, Jul 27, 2017

pexels-photo-297755_resized-1.jpgBuying a plane ticket can be a gamble. Right now, it might be a good price, but who’s to say it won’t drop in a day—a week? Not only that, it may be cheaper to take that Sunday night flight instead of Monday morning. And oh—should you fly into Long Beach or LAX? As a frequent traveler (for leisure and work!) and deal seeker, I face dilemmas like these a lot.

The good news is that there are loads of apps and websites to help passengers make informed travel decisions. But how? How can an app—say, Hopper—know exactly when a ticket price will hit its lowest point? Is it magic? Is there a psychic in the backroom predicting airline prices with her crystal ball?

Not quite.

While it seems like magic (especially when you do land that great deal), forecasting flight prices all comes down to predictive analytics—identifying patterns and trends in a vast amount of data. And for the travel industry in particular, there’s incredible opportunity to use data in this way. So, let’s put away the crystal ball (it won’t fit in your carry on) and look at how travel companies and data scientists are using the tremendous amount of travel data to make predictions like when airfare will hit its lowest point.

In order to predict what will happen in the future (in this case, how airfare may rise and fall), you need a lot of data on past behaviors. According to the Federal Aviation Administration (FAA), there are nearly 24,000 commercial flights carrying over two million passengers around the world every day. And for every single one of those travelers, there’s a record of when they purchased their ticket, how much they paid, what airline they’re flying, where they’re flying to/from, and when they’re traveling. That’s a ton of data to work with!

As a researcher, I get excited about the endless potential for how that amount of historical data can be used. And I’m not the only one. Companies like Kayak, Hopper, Skyscanner, and Hipmunk are finding ways to harness travel data to empower consumers to make informed travel decisions. To quote Hopper’s website: their data scientists have compiled data on trillions of flight prices over the years to help them make “insightful predictions that consistently perform with 95% accuracy”.

 While the details of Hopper are intentionally vague, we can assume that their team is using data mining and predictive analytics techniques to identify patterns in flights prices. Then, based on what they’ve learned from these patterns, they build algorithms that let customers know when the best time to purchase a ticket is—whether they should buy now or wait as prices continue to drop leading up to their travel date. They may not even realize it, but in a way those customers are making data-driven decisions, just like the ones we help our clients make every day.

As a Market Researcher, I’m all about leveraging data to make people’s lives easier. The travel industry’s use of predictive modeling is mutually beneficial—consumers find great deals while airlines enjoy steady sales. My inner globetrotter is constantly looking for ways to travel more often and more affordably, so as I continue to discover new tools that utilize the power of data analytics to find me the best deals, I’m realizing I might need some more vacation days to fit it all in!

So the next time you’re stressed out about booking your next vacation, just remember: sit back, relax, and enjoy the analytics.

Amy M. is a Project Manager at CMB who will continue to channel her inner predictive analyst to plan her next adventure.

Topics: predictive analytics, big data, travel and hospitality research

Is Uber Living Its Brand Promise?

Posted by Tara Lasker

Thu, Apr 21, 2016

The Uber experience continues to fascinate me with each ride. I pepper my drivers with questions about Uber’s business model, their experience as a driver, and how satisfied they are driving for the sometimes controversial ride-share company. It’s a topic I also bring up around friends, family, and colleagues, and I always come back to the same question: where does Uber win and lose in the minds of end-customers?

I took a look at Uber’s brand promises to see if those promises aligned with my own experiences (as well as the experiences of other people I’ve talked to.) Below, you’ll find Uber’s promises to riders:

uber-2.png

  • Tap a button, get a ride. It’s so nice to be able to request a ride from Uber with one tap and have a clear expectation of when my driver will be there and what my ride will cost. I appreciate having my driver’s information as well as the license plate number on hand.

Verdict? Uber delivers in a big way on this promise. 

  • No cash, no tip, no hassle. Until recently, I thought this was true, and I loved Uber for it. I appreciated that everything was linked to my account and that I didn’t need to fumble around my wallet in a dark car at the end of my ride. I asked a driver about this a little while ago, and I was surprised to learn that not only are tips not included in the fare, but Uber has also begun taking a higher percentage from each ride. I researched this after I got home and saw that the driver was right: tips are not included. The more I researched, the more I realized that I was not the only one who had this misconception.

Verdict? Uber says there’s no need to tip, but it’s not explicitly stated that tips aren’t included in the ride cost at all. There’s a lot of confusion surrounding this issue. Since I now know that tips aren’t included, I plan on tipping my driver out of pocket, which reintroduces the problem of fumbling around in my wallet at the end of a ride. This is an issue that could make me to switch to a competitor (perhaps Lyft, which allows you to tip in the app). In my opinion, Uber owes its drivers (aka “partners”) and its customers clarification on why “there’s no need for a tip.” 

  • You rate, we listen. This might just be my personal misconception, but given that it seems that anyone can drive for Uber, safety is a concern. This steers me in the direction of cabs when I’m alone because I perceive them to be better regulated. However, if I’m with my husband or friends, I’m much more apt to take an Uber for the value. I have colleagues who consider Uber as (if not more safe) than a cab since all rides are tracked via GPS and riders have the driver’s picture and information as well as the vehicle’s information at their fingertips. Every week, it feels like there’s a new story about an assault on an Uber rider or driver, which can make taking an Uber feel like riding at your own risk. So, what about the rating? Does it help? Just like an eBay seller, do positive evaluations help communicate safety?

Verdict? I’m mixed. I’m still not convinced that Uber is any more or less safe than its alternatives. However, as a data nerd, I do appreciate having data on my driver when I request a ride.

Uber filled a much needed void when it launched in 2009. But as the company continues to grow, the promises it makes to customers don’t always ring true. The fix? Implementing a customer measurement system, which will ensure that the company delivers on these brand promises and doesn’t steer off the road of success. 

Tara is a Research Director at CMB. She enjoys nights out in the city with her husband and grilling her Uber driver on the way home.

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Topics: travel and hospitality research, brand health and positioning, customer experience and loyalty

What's the Emotional Impact of Your Ancillary Revenue Strategy?

Posted by Judy Melanson

Tue, Oct 13, 2015

The CarTrawler Yearbook of Ancillary Revenue reports that airlines generated $38 Billion in ancillary revenue in 2014, up 20% year over year. The report highlights the brands generating the most ancillary revenue–in terms of total revenue generated ($5.86 billion for United Airlines), the percent of revenue it represents (38.7% of Spirit Airline’s revenue) and discloses top revenue sources (e.g., frequent flier miles sold to partners, fees for checked bags, and commissions from car rentals).

Clearly, ancillary revenue is not confined solely to airlines; theme parks, cruises, car rentals, hotels all boost revenues from selling additional products, services and measure.jpgmerchandise. And it’s easy to see why. In addition to driving incremental revenue, ancillary products and services enable a supplier to (1) offer a competitive base price - essential (particularly in some segments like cruising) to enter into a traveler’s consideration set; and (2) meet the needs of their guests by merchandising – and conveniently delivering – what customers crave and where they’re willing to spend extra.

But there are potential costs as well. A quick read of the Cruise Critic blog points to ‘high-pressure’ sales tactics employed by ship employees and the negative impact it has on the guest experience. Eavesdrop on airline rent-a-car counters and you’ll hear the ‘fear, uncertainty and doubt’ in the voice of infrequent car renters. And hop onto a Spirit airlines to get an earful of complaints (“$3 for a water bottle?!”). Suppliers—particularly in the Hospitality industry—need to think about their brand position and why their customers buy from them as they consider the revenue and cost of this incremental revenue stream.

Our recommendation: to develop a customer-centric ancillary revenue strategy you need to consider the ‘emotional impact’ it will have on your key customer segments and the emotional fingerprint your brand wants to leave on its customers. Is your brand in the business of making key customers feel delighted? Secure? Valued? If so, the Ancillary Revenue offers should avoid making customers feel angry and frustrated! First step is to identify the top emotional drivers of your brand and investigate whether the Ancillary Revenue products are aligned; consider whether the revenue strategy reinforces, or conflicts with, the desired emotional end-benefit. Watch our recent webinar to learn about our approach: EMPACT℠: Measuring Your Brand's Emotional Impact

There are plenty of positive examples of ancillary revenue opportunities aligned with the desired emotional impact. Here are a few:

Disney: There is no FastPass on rides for younger kids at Disney – and the wait time can easily surpass the patience of kids… and their parents. On a recent trip to Disneyworld, a colleague spent over $100 buying buzzing, spinning, bubble-blowing toys from push-carts surrounding the rides. The toys kept her son happy and occupied. She felt delighted; turning waiting in line into a fun instead of a frustrating experience.

Disney mastery in this area is evident. It successfully offers many products and services that drive ancillary revenue that reinforce the desired emotional outcomes – during and after the trip: the MemoryMaker photo package, the pins/guest books/signatures and stamped pennies, the character breakfasts.

Tigerair, serving Asia-Pacific destinations, offers a fee-based service to travelers waiting for a flight connection of at least eight hours where they can visit the city-center and go sightseeing. As a traveler, I’d feel productive, happy and secure (knowing that I’d be back in time for my flight!)

Hilton Worldwide: When traveling, for business and pleasure, most travelers describe Wi-Fi as an essential service. For years, most major full service hotel brands provided access for a daily fee. Slowly, but surely, major brands like Hilton Worldwide have moved to a position of providing basic access to all loyalty program members. Doing so removes a highly charged negative emotion and reinforces a feeling of ‘being valued.’ Ancillary revenue will be created through sales of the premium internet service with the negative emotional blowback of ‘nickel and diming’ for a basic requirement.

The key take-away: The quest for ancillary revenue will only heat up. Ensure your strategy aligns with – and supports – the reasons customers buy from you and the emotional benefit they’re looking to achieve.

Learn More About EMPACT℠

Topics: travel and hospitality research, EMPACT, emotional measurement, customer experience and loyalty

Harry Potter and the Missing Segment

Posted by Kirsten Clark

Thu, Sep 03, 2015

harry potter, segmentation, branding, slytherinGryffindor, Hufflepuff, Ravenclaw, or Slytherin? Brave, loyal, wise, or ambitious. . .which one are you?

For those of you unfamiliar with the Harry Potter series, these are the 4 houses that make up Hogwarts School of Witchcraft and Wizardry. When each young witch and wizard enters the school, a magical hat sorts them into one of four houses. Each house values certain attributes. Gryffindors value bravery and daring. Hufflepuffs value kindness and loyalty. Ravenclaws value knowledge and intelligence. Slytherins value ambition and cunning. The three main characters are Gryffindors (Harry, Ron, and Hermione), and most of the series’ villains come from one house in particular: Slytherin. Based on the rigorous questionnaire I completed on the Pottermore, I discovered I, too, am a Slytherin.

This past summer, I went to The Wizarding World of Harry Potter in Orlando, FL to immerse myself in the whimsy and magic of J.K. Rowling's world. Let me start by saying that if you’re a Harry Potter fan, the theme park is definitely worth a visit. The attention to detail is incredible. However, I have a bone to pick. I went to this theme park eager and willing to spend money on paraphernalia that would let me proudly represent my house. . .but I couldn’t find a single shirt that I liked. I went into every shop multiple times and was astounded (and disappointed) at the lack of Slytherin branded items. Gryffindors, on the other hand, had an expansive array of shirts, blankets, and cardigans to choose from.

Let my disappointment serve as a perfect example of why segmentation is so important. Without a useful segmentation, you can miss out on extremely valuable customers. It’s also essential in learning how to market to different groups of target customers with different needs.

As is the case with many brands, it’s possible Hogwarts’ houses aren’t just separated by character values, but also by consumer values and shopping habits. Maybe Slytherins are more price sensitive (though the Malfoys would demonstrate otherwise) or perhaps they don’t like to advertise that they’re cunning individuals (because that would make it a bit harder to be cunning). It’s also possible that Slytherins only make up a very small percentage of Harry Potter fans (we are special, after all), which would justify the lack of money and space Universal spent on Slytherin merchandise. Of course, it’s also possible that the opposite of all of this is true. . .but it’s more than the Sorting Hat will be able to tell you.

I did end up buying a patch with my house crest, and I let J.K. Rowling know that it’s time for Slytherins to get the respect we deserve. She has yet to respond.

Kirsten Clark is a Marketing Associate at CMB. Even though she’s a Slytherin, she closely identifies with Hermione Granger. In fact, in true Hermione fashion, she was once limited to asking only one question per day in elementary school.

The Sorting Hat might not be able to help you with segmentation, but we can. 

Learn About Our Approach to Segmentation

Topics: travel and hospitality research, customer experience and loyalty, market strategy and segmentation

Could Wearables Mean the End of Jet Lag?

Posted by Amy Maret

Thu, Apr 30, 2015

emotional measurement, emotions, travelWhat if you could hop off a seven hour flight from New York to London feeling refreshed and entirely jet lag-free? That’s the question British Airways has been trying to answer for years. From enhanced entertainment and meal offerings to carefully-designed lighting and noise reduction measures, many of the recent updates to British Airways’ fleet have been centered on creating the perfect customer experience in a notoriously tricky industry.Their latest innovation is “The Happiness Blanket.” The blanket is embedded with LEDs and connected via Bluetooth to a headband containing sensors that read electrical fluctuations in the wearer’s neurons. According to the promotional video released by the airline, if brain activity indicates that the wearer is calm and relaxed, the surface of the blanket turns blue. If the wearer is stressed or anxious, the blanket turns red.

As a researcher, this opportunity for seemingly effortless, real-time data collection piqued my interest immediately. I see a lot of potential in the ability to capture passengers’ emotional responses to various aspects of the flight experience as they actually experience it. If they had access to accurate emotional response information, flight attendants could find ways to tailor services to accommodate the needs of passengers on an individual level, and data collected across countless flights could provide useful information about what the airline is doing right overall and where they need to improve. With a bit of additional demographic and psychographic information on each passenger, the airline could create marketing campaigns and promotions around the specific experiences and emotional reactions of different subgroups.

At CMB, we know just how much emotions matter. We repeatedly find that the emotional impression left on a customer after an interaction with a brand is a major driver of customer satisfaction, likelihood to recommend, and even future purchase intent across all types of industries. British Airways, by focusing on helping passengers step off its planes feeling satisfied, is creating a subconscious connection between its passengers’ positive emotions and its brand. You can bet that the next time I need to book a flight, I would first look to the airline that got me to Europe feeling refreshed and relaxed, rather than the one that left me dehydrated and drowsy.

However, The Happiness Blanket certainly has its drawbacks as a research tool. Based on the information provided about the blanket so far, it seems that there is no way to tell—on a more detailed level—what emotions the passengers are experiencing, which would have serious consequences. The blanket supposedly turns red when the wearer is anxious or stressed and blue when he/she is calm or relaxed, but there are so many more emotions on the spectrum that are not acknowledged by this system. For example, if two people’s blankets show red, one may be because a passenger is feeling unsafe and afraid on the flight, while the other may be because a passenger is enjoying the adrenaline rush of watching an action movie. If you were to ask those two passengers how they felt after their flights, and whether they would choose to fly with the airline again, you would get two drastically different answers. If British Airways intends to use this data to make real, impactful changes to its service, they will need to find a way to capture nuances like this or they could misinterpret the data entirely and make poor business decisions as a result.

This example provides a basic illustration of why we find that self-reporting is the most accurate way to collect data on something as subjective as emotion. While biometric solutions can sometimes provide a basic emotional read, self-reporting provides a more dependable, and much less expensive, way to get at the discrete emotion being experienced. The only way for the flight attendant to tell the difference between two red blankets would be to ask the passengers how they are feeling. Only then could they properly tailor the service to each person’s experience.

When I told my colleagues about The Happiness Blanket, they kept asking the same questions: how long can the novelty of the blanket sustain its use? Couldn’t it be a bit awkward to have your emotions broadcast to the entire cabin, especially in a situation as sensitive for many people as flying? Maybe it would make more sense to get rid of the blanket aspect entirely and just send the data directly to a computer. That way, the flight attendants could still monitor the data for in-flight use, and it could still be captured for future analysis, but passengers wouldn’t be disturbed by the constant color changes on their (or fellow passengers’) blankets. However, getting passengers to agree to have their brainwaves monitored by an airline could prove a challenge, and with the inaccuracies of this method of data collection, it may not even be worth the investment. Although the idea of being able to read passengers’ emotions directly appeals to me as a researcher, self-reporting is still the only way to capture reliable data on the subjective emotions of customers.

So, is The Happiness Blanket just a clever publicity stunt designed to promote recent enhancements to British Airways’ First and Business Class cabins, or is it a sign of true dedication to research and customer feedback? So far, it seems like the company has primarily been using The Happiness Blanket to attract attention, get consumers engaged with the brand, and show why the company thinks its flights are better than its competitors’ flights. If British Airways is truly trying to capture useable information on their passengers’ reactions to its service through The Happiness Blanket. . .they’ll also need to ask them.

Amy is Senior Associate Researcher at CMB and an avid traveler. She is a bit disappointed that she won’t have the chance to try out the Happiness Blanket on her next trip to Europe.

Understanding the emotional payoffs consumers want and expect is critical to helping brands build and maintain a loyal customer base. Watch our recent webinar to hear Dr. Erica Carranza and Brant Cruz share how we capture these emotional payoffs to inform a range of business challenges, including marketing, customer experience, customer loyalty, and product development.

Watch Here!  

Topics: travel and hospitality research, emotional measurement, customer experience and loyalty