Airlines & Social Media: Stop trying to be sexy. Be solvent.

5 Ways Airlines and Hotels Can Drive Revenue with Social Media

Shashank Nigam is the CEO of SimpliFlying.com, an award-winning blog on airline branding. He tweets at @simpliflying.

Social media is no longer the “new” thing, especially for airlines. JetBlue has over one an a half million followers on Twitter. Lufthansa allows passengers to update their Twitter or Facebook status about where they are in the sky. AirAsia drives buzz about its new destinations through custom micro-sites. However, most airlines (and airports and hotels) are still struggling to earn direct revenue from their social media efforts.

Yet if Dell can make $6.5 million from Twitter, why can’t airlines? Here are five ways that social media can directly drive dollars for airlines (and other travel companies, like hotels).

Check out the full article on Mashable at the link above, but these are the five points made:
1. Clear distressed inventory on Twitter
2. Infuse social media reviews into the booking engine
3. Integrate with social media travel applications
4. Create private online communities
5. Remember: Social media is about relationships

I don’t mean to be the sole dissenting view here just for fun. I would love to agree these tips are spot on. And while I certainly agree that generating incremental revenue for airlines as a result of strategic social media initiatives is important, this article didn’t quite add up to me, despite the rave reviews & RTs it received.

So, readers, please use my comments section to help me understand what I’m missing. Be as candid as you like. I plan to be.

First of all, I agree there is opportunity for #1 – clear distressed inventory on Twitter. But I think the author oversimplifies this process to a fault. It’s not just as simple as adding in a new rate or fare code. Inventory availability will be a massive issue that could drive more cost than incremental revenue benefit through additional calls to the call center due to availability issues and, thus, complaining customers who could potentially damage your brand as a result if they vocalize their frustration across the social space.

In addition, this proposes that airlines, most of whom have some of the most complex reservations systems in the world, should rely on a extremely unreliable, at best, platform to distribute their content. That seems to me to risk more than what the return is worth. Maybe I’m wrong? For those airline experts out there, please help me understand why.

#2 – Infuse social media reviews into the booking engine. We are still talking about airlines, right? While it is absolutely true that online shoppers are heavily influenced by reviews during the shopping process, airline customers are most heavily influenced by price first and schedule second.

And even more confusing to me is that if a customer is already on an airline direct site to book, they have made their brand choice. What customer reviews are going to increase revenue or yield from that point on? Again, price and schedule win.

And unfortunately, it’s not up to airlines to determine whether or not an OTA has that capability in their site. And it’s a function that requires a massive overhaul of a complex system. So, once again, I was left confused by this recommendation and how it is truly actionable.

#3. I agree that there is a great deal of opportunity to integrate with social media travel applications, but I don’t think it’s for the reasons listed here. The author proposes that there is a benefit to airlines farming the data you post in the social space about where you are traveling – in theory, this sounds good. Hotels and other travel suppliers could absolutely could use it, but when you have made a decision to travel, guess who knows it even before your social network? The airline with whom your ticket is booked. I don’t know anyone who uses an itinerary-based service to shout from the rooftops their travel plans unless they just paid for and received an… wait for it… ITINERARY.

Again, this information is great for destination-specific travel suppliers, like car rental agencies and hoteliers who can filter itinerary data to know who has and hasn’t booked their hotel, car or even restaurant reservations during their trip. Those are the suppliers who could gain the most value in this area and truly drive incremental sales through social media.

#4 – Niche communities absolutely are a growing trend this year. I don’t argue that. And I think this idea is a good one that carries the most weight; however, your exclusive and most valuable passengers to whom you’d most likely be interested in providing this type of community are also the ones who travel the most and have the least amount of time to sign-up, login and utilize yet another social network.

This idea would have to take that into account an integrate with those customers where they already are – not force them to visit someplace entirely new. It’s not worth their time.

#5 – Remember: It’s all about relationships? Of course it is. But it’s also all about revenue. And spending money on the first without measuring and impacting the second is pointless for any for-profit company.

The other confusion thing is that the statement supporting the point about relationships first, not about selling your product, is completely the opposite of the point made to support #3. That’s exactly what your goal was – sell, or upsell, your customers via ads. Right?

My final thoughts:

I guess overall, this article left me wanting more. Or made me wonder if the only thing wrong was the title. If you removed airlines as the main target and focused on just hoteliers and destination-based travel suppliers, it works on just about every level.

I think the thought process was a good one, and I don’t claim to have figured out the answer either, but I think the most revenue potential that exists with airlines in the social space is very much dependent on how they utilize the vast repositories of data they have about each and every customer in-flight, and how they can extract media revenue from the those other, high-margin suppliers based on that data while their customers are en-route. That, in my humble opinion, is the key to that little revenue mystery.

Otherwise, I still believe it’s all about customer service. And while maybe that’s not a sexy point in the social media world, it’s the most alluring thing you could ever put in front of an airline executive. You can contribute more to an airline’s bottom line by reducing call center expenses than by selling distressed inventory at rock bottom prices.

Think like a utility, not a commodity. As marketers, we must think of airlines for what they are – not what they are called. While that could potentially translate into increased sales, we should all be surprised if it happens in the same way as with other travel suppliers. There is opportunity, at the end of the day, to drive more $$ to the bottom line for airlines via social media, but I’m not convinced the above tips are what will get us there.

We have to push our thinking beyond what has worked so simply for other travel suppliers and push ourselves to create new solutions that aren’t sexy, but solvent.

-SKE

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