Established travel providers are under assault from all sides. The economy continues to falter, disruption from weather, strikes and such like have become the norm and market share is constantly being attacked by ‘fresh thinking’ new market entrants. Google signalling its intention to blend full flight data in to its search results could well represent the beginning of another momentous shift in the balance of power. Even the GDS providers are no longer immune, with many travel organisations seeking to by-pass or re-engineer their position in the operating model.

Much of this is good news for the consumer as they benefit from downward pricing pressure and increased dynamically packaged product options. However many of the inventory holding airlines, tour operators and ancillary providers are watching nervously from the sidelines as the market shifts around them. The more innovative amongst them have prepared well for the onslaught by re-engineering the metrics that underpin their operating models.

Gone, or at least pushed to one side, are the performance indicators linked to bland operational functionality in the contact call centres (think call handling time, speed to answer, first call resolution, etc). These are being systematically replaced by new commercially savvy business metrics intended to optimise the customer facing supply chain.

It’s survival of the fittest and the major emerging KPIs underpinning this brave new world are:

Contact to Order – C2O

C2O is the number of contacts handled as a multiple of the total number of bookings across all distribution channels. Other more granular forms exist and will almost certainly evolve as the measure becomes standard. Travel organisations prefer certain contact types, which allow them to cross-sell or up-sell but ultimately contact costs money and most types are avoidable.

There are brand and product-specific exceptions but in general reservation centres typically convert calls to bookings at somewhere between 20% and 30%, taking the mid point that’s a contact-to-order ratio of 4:1. However, this fails to include all of the general enquiry or complaint calls, which inflates this ratio and cost considerably.

C2O reduction has become a major source of transformation potential. Businesses can reduce their operating costs by targeting the source of the contact, i.e. a web reservation that generates a non-value adding telephone interaction. Why has the web reservation generated an enquiry, how can this be avoided? By having effective processes for handling non-value adding interactions, including “how do I” or “where is my” type questions via self-serve channels or better still eliminating the issue through more robust business practices will help improve profitability.

Dynamic Decision Science – DDS

DDS, some would call, ‘generated incremental contributions,’ are beginning to appear within innovative business models, whereby the huge amount of data insights often lying untapped across the systems infrastructure can be leveraged to drive cross selling. The benefit is that with the correct layers of segmentation, including those applied to the understanding of the customer, supplier rules, preferred channel, time of use, etc, the transaction is no longer reliant upon a live operator to cross sell but can be done through other channels, such as SMS or the web.

The proliferation of connected devices means that highly targeted offers can be made right up to the point of departure. As an example, the best time to cross-sell increased baggage allowance is not likely to be at the point of reservation, but when the parents are struggling to pack for their families three days prior to departure. A baggage allowance offer communicated via SMS or available through a travel app at that point will yield far higher results.

The way customers interact with businesses such as travel providers is changing forever. There is a need to meet the needs of a more informed, tech savvy but time poor customer while at the same time reducing business costs to compete in an increasingly competitive environment. Targeting the reasons for direct customer contact while at the same time leveraging data from across the business for other channels is key. Adapting metrics to reflect this is vital if its success is to be measured.

The concept that a friendly agent or rapid answer time can compete in today’s travel industry is out of date.