7 years ago
 

Future of travel reservation systems is CRM – but not as we know it

For those of us who work in the travel reservation system software world we tend to be optimising and commoditising ideas that were first mooted in the late 1990s.

The announcement of an API hardly excites and what is going on in the social media world seems very remote.

Yet change is coming.

First some history. Reservation systems are effectively accounting systems. I can bore people with detail about how one country has certain tax regulations requiring bookings to be accounted for in different ways.

Indeed, if someone mentions US state specific tax law I might completely lose the plot (especially, for obvious reasons, as it is based on the customer address – which you only tend to find out almost at the very end of the booking process – normally after the price is quoted etc).

In a reservation system the customer record is not much more than a name, address and contact details.

So then we built better reservation systems. These held customer records as discrete entities to a booking record. If a customer happens to book several times then these are associated with the same customer record and you can see what is happening.

Hardly a massive step forwards but even this defeats most tour operator reservation system providers (and before anyone asks, yes we are not perfect on this either, it actually isn’t that trivial).

Then we get dedicated travel CRM systems such as Pro Eq, now owned by Comtec.

Pro Eq changed the game. No longer was a customer record a side-effect of a booking, but a booking was a side-effect of a customer record. Hence it did a great job of  understanding that it was the same customer that booked multiple times.

The system facilitates marketing based on prior customer behaviour. And it manages complaints nicely. (Incidentally, I have never understood why complaints should be handled efficiently. Surely by handling them inefficiently this gives greater incentive to stop the cause of the complaint in the first place…. but I fear I am digressing)

So now we have customer records as a side-effect of bookings and bookings as side-effects of dealing with customers.

Seems kind of logical really. Yet here comes the next step.  Conversations. Yeah that social thing.

customer relationship

Now we work with a lot of small tour operators/activity providers. Conversations are pretty much what they do. When someone starts talking about booking with them they tend to email/phone the supplier and ask a few questions.

The supplier replies. The customer replies, etc etc – a horrible and inefficient loop, but try to remove the human from the process and you will lose bookings.

With the budgets that most small tour operators have, humans are much better at selling than the website will be.

At the large tour operator end it is different – they have very good (but sterile) websites and a call centre full of underpaid, inexperienced, staff  – so of course, for them, driving people to the website is best, or least worst perhaps.

Unfortunately it is the larger companies that get to be invited to speak at conferences which leads the smaller (by choice) tour operators/activity providers to aspire to be something they really shouldn’t be!

So, back to conversations. What we need is a new system (and remember these are pretty much the biggest IT investments a tour operator will make).

What we need are systems that manage conversations. Both customer and booking records are side-effects of the conversation.

Now I know this sounds odd, but imagine you are at a social event somewhere… You are happy having a conversation even if you are not totally clear who you are talking to. Hence a conversation is a separate entity to both the customer and a booking record.

Yet these conversations convert to tailor-made tour requests. These conversations create bookings. This is nothing new – small tour operators have been talking to customers for years. Social media might be new but the concept of conversations isn’t.

The future of travel reservation systems is CRM – but the C now represents conversations.

This will not happen overnight but it will happen eventually. The problem is that most innovators in this space are still tied in knots delivering the ideas we as an industry had in 2002-2005…

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Alex Bainbridge

About the Writer :: Alex Bainbridge

Alex is a contributing Node to Tnooz and writes about travel technology, travel startups, in destination guides and the tours & activities sector.

His most recent business TourCMS (sold October 2015) was the original leader in tours & activities distribution, connecting up hundreds of local tour suppliers with leading online travel agents. The industry architecture he put in place during that period is now the regular approach adopted globally by the entire local tour industry.

He is now CEO of a new in destination project coming soon.

Alex has a computing degree, is passionate about usability, speaks French and still writes and reviews code. Follow him on twitter @alexbainbridge

 

Comments

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  1. Xerago

    A very good forecast by Alex about CRM’s evolving as future Travel reservation systems. Customer Value Maximization (CVM) product is already on the Market which not only acts as a reservation system, but also engages customer, drives feedback, motivates referrals, strengthen customer loyalty and cross-sells travel related services.

     
  2. Jon Pickles

    TravelCRM – CRM with Email, Postal Mail, Analytics and Social Network integration: Now there’s a thing!

     
  3. Murray

    We are busy trying to figure this challenge out so this article has a lot of resonance for me. I often use the evolution metaphor to rationalise my perspective of where we should be playing. Originally travel agents/operators sat a desks and spoke to customers across the desk. Over time we have evolved to full automation systems like Expedia. However, just because we can automate, do we necessarily need to? Does the customer actually always want that? Sometimes yes, absolutely. So what happens in-between? How do we allow the customer to decide at what point they want to engage with a person and when they want to progress unaided? This linking to a conversation seems a tangible association

     
  4. Ravindra

    Evolution is logically well explained and broadly fits into over all travel eco system.

    Given the hybrid models in supply chain gets difficult to map sometimes. A TO operating only with affiliates (we’v worked with quite a few of them) manages reservations differently than the one who actually originated the booking. Though there is significant automation available to interface with the supply side for this principal TO, struggle remains with TO handling the end consumer.

    While C-Conversation based systems seem to be future – how quickly we will start seeing the shift (given small TOs drive significant business) will be interesting to watch.

     
  5. Joe Buhler

    The next step then would logically be SocialCRM a topic starting to get covered in a number of social media threads on Twitter and elsewhere. Integrating the reservation or eCommerce part into the ongoing customer engagement cycle will become a necessity and the insights learned from it a potential asset.

     
  6. Ben Colclough

    I do think a lot of the process involved in preparing even tailor-made arrangements can be automated – or at the very least significantly optimised through technology. From giving travel options early in the communication through to formal quote documentation. It relies, I believe on a very fluid interface between human input and database populated emails and documents.

    The big question is, can it be standardised in a way which would work for lots of companies – or will it be the preserve of tailor-built systems for those with a budget?

     
    • Alex Bainbridge

      Hi Ben
      My keyword for tailor made is to keep reinforcing the concept of efficiency rather than automation.

      i.e. sending a customer communication should take 30 seconds rather than 5 minutes. However removing that 30 seconds is a task that is just too much – because it requires a lot of prior configuration – which right now – even with itinerary builders that customers can do themselves – is not something that a small tour operator wants to spend time configuring (let alone developing). However doesn’t stop them from asking of course!

       
      • Ivo Dimitrov

        Hi Alex, I agree on the workflow of the communication itself that it should take less time and probably not good for automation, at least for now…

        I think what Ben was referring to and what I was hinting in my post is not automation of communication itself, but the computerized translation of customer/conversation records into tailored and meaningful actionable results that is currently not supported by any of the reservation systems in place.

        Don’t you agree that this may significantly add to efficiency too as less time would be spent (and notably man power) to understand customers needs and address them with relevant results to choose from?

         
  7. Ivo Dimitrov

    Apparently, what appears to be also missing is a system that links to these conversations and automates the process of finding actionable results that ultimately convert into bookings.

     
  8. Tweets that mention Future of travel reservation systems is CRM - but not as know it | Tnooz -- Topsy.com

    […] This post was mentioned on Twitter by Good CRM and Peter Daams, Kevin May. Kevin May said: Great analysis here… Future of travel reservation systems is CRM – but not as we know it http://bit.ly/ayq1iS [Tnooz bia @alexbainbridge] […]

     
 
 

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