Smarter Travel Marketing 2023 AI RLI N E DI GITAL OPTIMIZ ATION YEARBOOK Airline industry insights for a higher conversion rate and better user experience Sponsored by: 2023 | © Diggintravel ABOUT THE AUTHOR ABOUT DIGGINTRAVEL Iztok Franko is passionate about digital marketing and e-commerce. He has more than 10 years of experience as a CMO and CIO in airline, travel and multinational companies. He currently works as a strategic digital marketing and ecommerce consultant for global airline and travel brands. Diggintravel is a content platform, designed for airline ecommerce and digital marketing professionals. Through practicing true data-driven digital marketing, testing several ecommerce processes and experimenting with different team management approaches, he has established a conversion optimization framework that works. Iztok also regularly writes and speaks about travel and airline marketing, ecommerce, conversion optimization and ancillary topics. He is the founder of diggintravel.com, a content platform for smarter travel marketing. Diggintravel was built to help digital marketers in the travel industry, especially airline professionals who run and manage online sales. We provide in-depth insights and research on airline ecommerce and digital marketing. Diggintravel specialzies in airline conversion rate optimization and ancillary revenue disciplines and by combining both helps airlines become true digital retailers. If you are an airline looking to grow your online sales; we can help you with tailor-made workshop for airlines, advanced analytics designed for airline booking funnel and conversion optimization consulting services. 2 ABOUT THE SPONSOR Re-architect your digital channels around your customers At Branchspace, we are a passionate team with deep cross-functional experience in airline & travel tech, travel retail and end-to-end customer experience. We want to be the most forward-thinking & trusted technology partner for airlines and other travel companies. We break barriers of legacy technology & thinking. Jointly with our customers, we create better ways to plan, book and experience travel. We offer transform consulting services and Triplake, our best-in-class digital commerce platform. With Triplake, we deploy the latest technology & retail thinking and make it easy for you to drive personalised end-to-end experiences for your customers and meet your revenue goals. We’re an IATA Strategic partner for digital innovation to help shape the future of travel. We have been a long-term trusted partner for LH Group, IAG, Aegean, TAP, Air Malta & more, since 2013. 3 THE FOLLOWING EXPERTS PROVIDED INSIGHTS FOR THIS YEARBOOK: During our research, we conducted several in-depth interviews with various digital leaders on our Diggintravel Podcast. Key interview highlights and experts’ insights are provided in our detailed survey results chapters in the special “Ask the Expert” sections. Full audio podcast interviews are available on the Diggintravel Blog and Diggintravel Podcast websites. ANDRES BUCCHI ISMAEL MONZON Chief Data Officer at LATAM Airlines Digital Growth Team Manager at Air Europa Andres is a seasoned executive with a solid technical and entrepreneurial background, experienced in the tech and retail industries. He is the Chief Data O cer at LATAM Airlines and held a prior role as Vice President – Data and Analytics at Sodimac as well as working in data science at Uber. BEN LABAY Ismael has 15 years of professional experience working on several international B2C and B2B digital products which have a few million monthly users. He is a longtime supporter of Diggintravel research and currently leads Air Europa’s growth, digital analytics and CRO initiatives. URSULA SILLING CEO at Branchspace Experimentation Expert, CEO at Speero by CXL Ben is the CEO of Speero by CXL, a speaker on all things research and experimentation, an artist, and a conservation science consultant. He’s done 10+ years in academia and conservation science, and 5+ years working in the marketing and digital industries. ffi ffi 2023 Airline Digital Optimization Yearbook Ursula is the CEO of Branchspace, where she is leading a team that is transforming digital commerce for aviation and travel. Ursula has vast airline experience: she was prior Chief Commercial O cer at Kenya Airways, Commercial Director at Air Malta, EVP – Commercial at Brussels Airlines, and worked for or with many other airlines. 4 MATT RAVLICH Former Digital Analytics and Optimization Manager at WestJet Airlines Matt is currently a Managing Director for Alberta Consulting Group (ACG), where he specializes in optimizing their clients’ digital experiences using the current tools they have and helping them prepare for the future. Prior to that, Matt was Manager of Digital Analytics and Optimization at the second-largest Canadian airline, WestJet Airlines, where his main focus was growing maturity levels with WestJet analytics and optimization programs. MARIANA FONSECA MEDINA Senior Vice President – Loyalty Product at Mastercard, prior Managing Director – Digital Customer Experience at American Airlines Mariana is a results-oriented executive with a passion for product management. She upscaled digital teams in a large airline organization environment at American Airlines, and she built one almost from scratch in a startup setting at Virgin Voyages. JAKE MALONEY Director Ecommerce and Digital Products at Frontier Airlines Jake is an accomplished leader with 19 years of experience across multiple industries. He is highly versed in digital solutioning, development, and analytics. Jake is an expert at creating customercentric solutions and capitalizing on cost-effective approaches to exceed company goals. RICH PAGE Conversion Rate Optimization Expert Rich is a CRO expert and consultant with 15 years of experience. He helps ecommerce businesses increase their conversion rates and revenue by discovering their users’ issues, doubts, and needs. 2023 Airline Digital Optimization Yearbook MARK HURSH Senior Director of Digital Customer Experience at Southwest Airlines Mark is an experienced leader who is passionate about digital product management, experience design, business strategy development, largescale cross-functional program management, and project execution. Mark has a background in the Travel industry with an emphasis on the airline, hotel/lodging, car rental, and meta search verticals. LORENZO CARRERI CRO, User Research and Experimentation Consultant Lorenzo has 12 years of experience in digital and tech, focusing on media buy, growth and experimentation. He consults businesses on CRO, analytics, user research and experimentation. 5 WHERE’S WHAT PART I. INTRO AND HIGH LEVEL RESULTS INTRODUCTION 8 Author’s note Taking experimentation and scienti c 11 decision-making beyond the digital space ABOUT THE SURVEY About the 2022 Airline Digital Optimization 13 survey The Diggintravel Airline Optimization 15 Optimization maturity model KEY FINDINGS Findings summary – State of Airline Digital 18 Optimization Laggards 20 Challengers 22 Visionaries 23 Leaders 24 Airline Digital Optimization Teams Growth 27 PART II. SURVEY DETAILS PER SECTION SECTION I - People SECTION II - Skills and Knowledge SECTION III - User and UX Research 30 41 50 59 SECTION V - Test Quantity 66 SECTION VI - Tools 75 SECTION VII - Internet Booking Engine 85 SECTION VIII - Organization Support 95 fi SECTION IV - Digital Analytics Smarter Travel Marketing 2019 TITLE OF DIGITAL SURVEY INTRODUCTION Airline industry insights for a higher conversion Month 2019 | © Diggintravel AUTHOR’S NOTE When I started with the rst airline digital optimization survey back in 2017, I never could have imagined that we would get to its fth anniversary and that it would grow so big. In our rst survey we benchmarked 28 airlines, mostly out of curiosity to see how airlines were building and optimizing their websites and other digital touchpoints. Back then, conversion rate optimization (CRO) and experimentation were not widely known or adopted among airline digital experts, so for a lot of them, our rst published report was an introduction to this exciting digital marketing discipline. Five research projects later, we’ve almost doubled the number of surveyed airlines – from 28 in 2017 to 55 in 2023 – and many airlines are using our frameworks to grow the maturity of their digital teams. I don’t think it’s an overstatement to say that the 2023 Airline Digital Optimization Yearbook is the result of the most comprehensive annual airline digital research and benchmarks in existence. Speaking of benchmarks, let me share a story about airline digital benchmarking. During our 2023 research I talked to a CIO of one of the biggest airlines in the world. He ran across our past research and wanted to know how our benchmarking process works. This airline executive understood that our survey is an assessment of the process (e.g., how airlines do digital analytics, UX research, experimentation, etc.), but he was interested in benchmarking the output. We agreed that our survey measures the “input,” whereas what the customer experiences at the end (airline digital products) is the “output.” I understand the appeal of global ranking of airline websites or apps, but I think it would be very di cult to do it globally and agree on joint success metrics. What I offered to this airline leader is an explanation that while our survey doesn’t measure the “output,” we see a strong correlation between the “input” and the “output.” What do I mean by that? During the last six years of doing benchmarks of the airline digital optimization process, as well as doing several workshops and consulting projects where we educated airlines on CRO and helped them plan the path to improve their maturity, I saw a clear connection between a structured and systematic digital optimization process and a good airline digital user experience. Simply put, airlines that commit to a data-driven, scienti c approach to optimizing their digital user experience build better digital products in the long run. On the other hand, I still see many airlines buying expensive digital platforms as a shortcut to a great product (output), without committing to the process (input). I know my answer was not completely satisfactory for the airline executive, who wanted to see how his airline’s digital user experience compares to their main competitors at that exact moment. But I can assure him or any other airline leader that investing in a systematic and structured digital optimization process is the best long-term guarantee for a good output. Enjoy this yearbook! Iztok 8 fi fi fi fi 2023 Airline Digital Optimization Yearbook ffi fi 5TH AIRLINE DIGITAL OPTIMIZATION SURVEY AND RESEARCH In our last Yearbook we had a section titled “Will 2022 be the year for digital recovery and smarter digital marketing?” A year later, we can con dently say that after the industry took a big step back during the COVID-19 pandemic, we nally saw a rebound when it comes to airline digital optimization and digital optimization teams. Many airlines started to rebuild their digital teams; 60% of digital leaders in our survey said they increased the size of their digital teams over the past 12 months. What's more, some airlines, like Air Europa, fully committed to digital and direct distribution because of the disruption and changed consumer behavior that happened during the pandemic. It’s not only the digital optimization teams that improved. We see a positive change in overall airline digital optimization maturity. While there are still many airlines at the beginning of their digital optimization journey, our research shows that there are more airlines that are systematically embedding CRO and experimentation into their digital product teams and process. This trend is not exclusive to the airline industry; experimentation leader and our Yearbook contributor Ben Labay sees a continuous trend of CRO evolving into business operations in other industries as well. The “CRO way of thinking,” that failure is a feature and not a bug, is being recognized and accepted more and more. This change can be seen in our survey analysis, as we saw a shift from Level 3 to Level 4 in almost all of our eight digital optimization areas. Some smaller airlines, like the aforementioned Air Europa or Scoot, made a transition from a oneman-band CRO enthusiast to building a full-scale, centralized digital optimization team. On the other hand, there are bigger airlines that are embedding CRO and experimentation principles in their distributed digital product teams. During our research, we ran across several roles from large airlines like easyJet, Eurowings Digital, British Airways, and Qatar Airways that show CRO and experimentation are being widely adopted across their digital ecosystems. Airlines are combining experimentation with agile thinking and processes to build better digital products based on data and user feedback. Some airlines, like easyJet and Eurowings Digital, have experimentation and a scienti c approach to decision-making present in their company mission statements. Airlines, like LATAM, went even a step further and are implementing an experimentation-based scienti c approach to decision-making in non-digital units and processes. You’ll nd several examples of roles and organization models along with experts’ interviews throughout this Yearbook. We hope they can help your airline progress on this journey and take the next step on your path to digital optimization maturity. Finally, we’re glad to announce we have partnered with Branchspace as a partner and a sponsor for this Yearbook. They are a relatively new player in the airline digital world, but one that promotes experimentation and CRO. Our survey showed airline internet booking engines (IBEs) are still one of the biggest hurdles for CRO and experimentation, so new IBE providers that provide such functionalities on their platforms are a breath of fresh air. On the next page, you can read about how Branchspace sees the evolution of digital optimization in the airline industry over the last ve years and how CRO can unlock your airline personalization initiatives. fi 9 fi fi fi 2023 Airline Digital Optimization Yearbook fi fi CRO AND EXPERIMENTATION ARE BECOMING A BIG PART OF AIRLINE DIGITAL PRODUCT OPERATIONS EVOLUTION OF DIGITAL OPTIMIZATION IN THE AIRLINE INDUSTRY Radoslaw Dutkowski Director Customer Success "The customer-focused culture not only improves customer satisfaction and resolves problems in digital interfaces, but also increases conversion and generates extra revenue.” Optimisation techniques have become game changers for innovative airlines that focus on customer experience and continuously search for new revenue opportunities. The airline industry has had to quickly adapt to the changing customer experience — especially due to the pandemic — with optimisation techniques and experimentation becoming a part of the customer-focused culture to improve overall satisfaction, resolve digital interface problems, increase conversion and generate extra revenue. Airlines have developed their capabilities in digital techniques and personalisation mode in optimisation tools has sped up the process of bringing converting variants to the market. Looking back to 2019, with the start of the pandemic, airlines significantly developed their capabilities in optimisation techniques and became bolder in introducing experimentation into their customer experience improvement process. In many cases, it is now a permanent step in the process and often no changes are done to the customer-facing digital environment without any prior testing and proving that the alternative variant improves measured variables. In a nutshell, captured opportunities are a great motivator for airlines as they almost instantly can monetise optimisation gains when the experiment brings positive results, which is not always the case. Therefore, airline decision-makers are more inclined to invest in optimisation teams and develop the team’s skills and tools to analyse the data and select promising test candidates more accurately. Another interesting trend is that airlines using personalisation mode in optimisation tools speed up the process of bringing converting variants to the market. Implementing changes to the digital environment often takes a long time. However, the winning variant can be used for personalization immediately after the experiment ends, until the vendor updates the production environment. At Branchspace, our technology delivers optimisation tools out of the box. We help airlines benefit from a range of features such as personalised interfaces, improved conversion rates, and increased revenue. We make the process of experimentation and implementation faster and easier so that airlines can see the results of the optimisation process more quickly. 2023 Airline Digital Optimization Yearbook 10 ASK THE EXPERT: TAKING EXPERIMENTATION AND SCIENTIFIC DECISION-MAKING BEYOND THE DIGITAL SPACE Andres Bucchi Chief Data Officer at LATAM Airlines This Yearbook is all about airline digital optimization and experimentation in the digital space. But you're working on concepts of experimentation on another level. “You already know a lot about that in the digital world, as it’s your area of expertise. But that can translate fairly well into the physical world. When I joined the Pricing team at Uber, I realized that this (experimentation) was driving everything. You would see people go out of one experiment and start thinking immediately about the next experimentation time slot which could come a month from then. Everybody threw ideas, then they would do some back-of-the-envelope calculations and everything revolved around it. The organization was set so that this could be fast. You would see some teams competing (with different approaches to the same problem), it was crazy. Like you thought you were working for NASA or something.” But how can you run experiments in the physical world where A/B testing is not possible? What are the challenges of running experiments in a physical environment? “I’m going to talk about pricing rst, but we can talk about how this translates to home improvement. We did a lot of experimentation fi fi 2023 Airline Digital Optimization Yearbook there and some cases that might relate to aviation as well. So, the main problem with changing prices is that you affect a speci c set of (Uber) Drivers or Riders if you want to do A/B testing, like in traditional randomized control trials. The problem with that is that if you affect let’s say a bunch of Drivers with a more effective matching algorithm, they would be exposed to this more effective algorithm, and in theory what would happen is they are able to take more trips. That means they can satisfy more demand with the same supply. The problem is that on the other end, there are some drivers that have not been treated with this new algorithm. What you’ll see in the experiment is a big bias, because those drivers are not only affected by the effect that the algorithm itself would yield, but also by the fact that the treated group is being more effective and kind of taking demand from them.” So, it’s not like in the digital world, A versus B? It’s more like comparing two physical things? “Yes, it’s a physical thing, so they compete for the same resource. And you cannot really separate everything where everything is super entangled and it doesn’t matter if it’s one, two or three alternatives. You’re never going to run out of rendering your webpage or right buttons to click. But in this case it’s the physical world, and you actually run out of stock. And so this was a big problem, and it was solved with experimental setups. Instead of using traditional A/B testing with random control trials, you would do time sampling. You have these windows where you will turn (the algorithm) on, then off, etc. 11 ASK THE EXPERT: Then you would get your pseudo-randomized sample, which was good enough for running these experiments. There were other alternatives, where you sample in clusters that do not interact with each other – this is something Facebook does a lot – and what you end up having is groups that are comparable in time. There is a technique that’s called difference in differences which is very widely used for this.” If we translate this to the airline world, could the same logic be applied to airline prices? So you could say different groups on the same route, or even on the same plane? “Yeah, totally. You got it. This is actually the same problem that the airlines have and the problem with rolling out new pricing algorithms, or new revenue strategies. It’s that you share the same routes. It’s not like you can “treat” a plane and then “un-treat” it for some customers, right? You would get into big trouble, probably. Some people would end up hating you, others loving you. But probably what would happen is that the ones that love you would get all the tickets rst. So then you would bias everything. fi fi 2023 Airline Digital Optimization Yearbook One way to go about this is using what traditional (big tech) companies use when they compete against a limited stock of physical goods. Amazon has been doing this for a while now. I think eBay started doing this way back when they realized that their network had a limited capacity, so treatment and controls would compete for a limited resource. And they started doing either switchbacks or comparing routes that do not interact with each other and setting up these difference-in-differences A/B testing type of scenarios.” NOTE: If you want to learn in detail about running experiments in a physical airline environment, you can nd an article and the full interview with Andres on the Diggintravel Podcast website. 12 Smarter Travel Marketing 2019 TITLE OF DIGITAL SURVEY ABOUT THE SURVEY Airline industry insights for a higher conversion Month 2019 | © Diggintravel small 22% large 33% Diggintravel’s 2023 Airline Digital Optimization Survey is the fth survey and benchmark of digital optimization in the airline industry. Going into the fth year of our evaluation, the survey will provide you with an overview of the evolution of this exciting ecommerce discipline. This survey certainly won’t be the last, as Diggintravel will continue following the digital optimization developments and airline ecommerce trends. Every year, the survey has evolved as we continue to develop our maturity model and our digital optimization questionnaire. The 2023 survey was signi cant, as it marked the fth anniversary of Diggintravel’s airline digital research. This is why, apart from the yearly benchmarks, we wanted to see how airline digital teams and optimization practices have evolved since our rst survey back in 2017. medium 45% LCC 33% FSC 67% The survey investigates the maturity of the digital optimization processes and key challenges airline professionals face in their digital and conversion optimization efforts. During the last quarter of 2022, our survey questionnaire was sent to more than 110 airline senior ecommerce, digital optimization and digital marketing executives. The survey represents the views and insights of 55 carriers (a 6% increase from last year’s turnout, where 52 airlines participated). The survey will provide you an intriguing insight into the state and developments of digital optimization for the airline industry. Africa 13% Americas 13% Middle East 18% Asia-Paci fi fi fi 14 fi fi ABOUT THE 2023 AIRLINE DIGITAL OPTIMIZATION SURVEY AIRLINE DIGITAL OPTIMIZATION MATURITY MODEL WHAT WERE WE ASKING? The goal of the survey was to evaluate digital optimization maturity within airline organizations. For evaluation of maturity, we evaluated several digital optimization maturity models and revised last year’s Diggintravel Airline Digital Optimization Maturity Model. The new and revised Diggintravel Airline Digital Optimization Maturity Model consists of 8 areas: • 7 general digital optimization areas: people, skills, analytics, user and UX research, test quantity, tools, organizational support • 1 airline-speci c area: internet booking engine (IBE) You can see the exact questions and results for each area in the special section at the end of this report. Each area was ranked from Level 1 (basic) to Level 5 (most advanced). We also added new questions to evaluate the maturity of the digital optimization processes in addition to the 8 questions by area. These were the new questions added to the questionnaire: Does your team follow a process for conversion optimization? Does CRO and digital optimization have its own budget? How are experiment results and learnings implemented and shared across the organization? Based on the answers to the additional maturity questions, the nal maturity score was adjusted. fi fi 2023 Airline Digital Optimization Yearbook Since personalization is a hot topic and we believe it is tightly connected to digital optimization and CRO (conversion optimization), we also evaluated whether airlines combine conversion rate optimization and personalization activities and what kind of personalization engines they use. Additionally, we asked each participant about the key challenge that prevents them from taking digital optimization to the next level and about their 2023 investment priorities. It seems that in 2023, digital optimization and CRO have nally arrived on airline agendas at full scale. Last year there was a breakthrough in terms of airline CRO roles (you’ll nd many examples in our “Examples” sections in the second part of this Yearbook), but more than that, we’ve seen several airlines establishing CRO programs and initiatives to embed CRO in their digital product processes. During our research we’ve been in touch with two large traditional airlines that were working on setting up centralized CRO functions to provide experimentation guidelines to several distributed digital product teams. Hopefully our maturity model can provide insights to other airlines that want to go on this journey as well. The goal of the Diggintravel Airline Digital Optimization Maturity Model is to help airlines evaluate the level of their digital optimization process in each of the key areas. 2023 Airline Digital Optimization Yearbook fi fi THE DIGGINTRAVEL AIRLINE DIGITAL OPTIMIZATION MATURITY MODEL The maturity model also helps airlines strategically plan the actions needed to advance their digital optimization process in each area. Progress in most cases is an evolution of step-by-step advancement and rarely a revolution (skipping steps in the model). Finally, the maturity model is also a tool for selfassessment for airlines to realistically assess their real digital optimization and ecommerce competence. In a lot of cases, there is an organizational belief that ecommerce and digital optimization competence is at a higher level than it actually is. Only when we do a systematic evaluation of each area (especially user research activities in place and quantity of tests) do we usually get the realistic picture. 16 DO YOU WANT TO TAKE YOUR DIGITAL OPTIMIZATION TO THE NEXT LEVEL? This special airline digital optimization workshop is the best rst step! Discover all of the most important aspects of airline conversion optimization (CRO) in a hands-on, 1-2 day workshop. Learn – we’ll provide you with airline ecommerce and CRO best practices and benchmarks based on our research. Identify - we’ll deep dive into your booking funnel analytics and help you identify key optimization scenarios. Plan – we’ll evaluate your CRO maturity and help you plan the next steps based on our CRO maturity model. Execute - we’ll help you prepare and execute rst optimization scenarios and A/B tests. CONTACT iztok.franko@diggintravel.com FOR A DRAFT WORKSHOP AGENDA fi fi 2023 Airline Digital Optimization Yearbook 17 Smarter Travel Marketing 2019 TITLE OF DIGITAL SURVEY KEY FINDINGS Airline industry insights for a higher conversion Month 2019 | © Diggintravel FINDINGS SUMMARY – STATE OF AIRLINE DIGITAL OPTIMIZATION Based on the revised Diggintravel Airline Digital Optimization Maturity Model and survey results by each area, we classi ed each participating airline into one of the following four categories: Laggards, Challengers, Visionaries, Leaders We used additional questions about the maturity of digital optimization process (Is process documented; Does it have dedicated budget; How are experiment results shared) to adjust the nal maturity assessment for each participating airline. We grouped our eight maturity model areas into two major groups: According to our benchmark, we detected: • Completeness of vision—here we grouped areas that relate to understanding the importance of the digital optimization process, culture and organization (People, Skills, and Organizational Support). • • • • 15 Laggards 7 Challengers 25 Visionaries 8 Leaders The graph below shows how these categories correlate with the size and type of airlines. • Ability to execute—here we grouped areas that relate to the ability to execute a digital optimization process in practice (Analytics, User and UX Research, Test Quantity, Tools, and Internet Booking Engine). fi fi 2023 Airline Digital Optimization Yearbook 19 According to our maturity model, Laggards are the airlines that benchmarked the lowest (around Level 2 or lower on average) across all digital optimization framework maturity model areas. 15 out of 55 airlines are in this group, and 14 out of the 15 airlines in this group are traditional fullservice carriers. I. People and company support: These airlines are either just starting out with their digital optimization process or have not yet recognized digital optimization and CRO as a critical part of their company growth. For twothirds of airlines in this group, digital optimization is recognized and supported on a department level (usually the ecommerce department) or even an individual level (ecommerce or digital optimization specialist/enthusiast). 13 (out of 15) airlines don’t have a dedicated fulltime person responsible for digital optimization. Conversion optimization is performed either by an online marketing specialist with general digital marketing knowledge (8 airlines), or an ad-hoc or part-time conversion optimization resource (5 airlines). Only 1 airline out of 15 in this group claimed to have a full-time conversion optimization resource, and only 1 other has a small digital optimization team in place. II: Skills and knowledge: Only 4 out of 15 airlines in this group claimed to have a deeper knowledge and experience with digital optimization (CRO, UX, analytics, A/B testing, content & copywriting). All others said they have general digital marketing knowledge or basic knowledge about CRO. Based on the answers in the “People” category, we can infer that airlines in this group either don’t have a general understanding of the skills it takes to execute digital optimization, or they lack the dedicated resources and team to do so in practice on an ongoing basis. fi 2023 Airline Digital Optimization Yearbook fi fl LAGGARDS As you’ll see in the “Skills” section, digital optimization requires a complex and large set of specialized skills. This is a challenge for smaller airlines, where there are typically fewer employees with specialized skillsets compared to larger companies. III. User & UX research, tools and analytics: Understanding your users is the core of digital optimization, and this is one of the areas where Laggards struggle the most. 12 out of 15 Laggards only do basic web analytics when it comes to user research. The other 3 Laggards do basic user & UX research (some session recordings, simple A/B testing, heat maps and click maps, ad-hoc customer surveys). None of the airlines in this group do regular customer feedback and survey analysis, form analysis, or occasional unmoderated or moderated user testing.11 airlines in this group identi ed web analytics as their only digital optimization tool. 4 others use simple digital optimization tools (simple A/B testing tools, simple user research tools), and none of the Laggards claimed to use advanced customer research tools, customer experience analytics tools, or a simple personalization tooling. In addition, all but one of the Laggards claim to have internet booking engines (IBEs) that are not exible enough for A/B testing. Most airlines in this group (11 out of 15 airlines) do basic web analytics with some additional settings (goals, simple funnel report, etc.). IV. Testing quantity: None of the 15 airlines in this group claimed to do regular testing (2-5 tests per month). 8 airlines said they do none or minimal testing; the other 7 only do A/B testing and other forms of experimenting on an ad-hoc project basis only. If testing is performed, it’s usually done for major website redesigns. Most identi ed lack of knowledge and resources and technology constraints as their biggest obstacles to doing A/B testing on a regular basis. 20 V. Process, budget and knowledge sharing: Most Laggards haven’t yet started or are in the very beginning stages of their digital optimization journey, so the process is not documented and structured. Only 1 of the 15 airlines claimed to have a documented digital optimization process; 8 claimed to have a process for digital optimization but it's not documented. 6 out of 15 airlines claimed they have no budget for CRO, and the other 9 claimed that they have a budget, though it’s not dedicated but rather part of the overall ecommerce budget. NEXT STEPS FOR LAGGARDS: EDUCATE! Learn about digital optimization and CRO as much as possible and understand the value of a structured digital optimization process. Find and train an internal digital optimization champion who will put experimentation and CRO on the map. It’s crucial to evangelize, advertise and advocate for experimentation and A/B testing within the ecommerce and digital departments to foster the testing and data-driven culture. Once education and intra-department acceptance is achieved, it will enable airlines from this group to build a good case for organizational buy-in of digital optimization and experimentation. At that point, a small, agile digital optimization team and process can be formed. 2023 Airline Digital Optimization Yearbook 21 CHALLENGERS We classi ed as Challengers the airlines that are not Laggards (so their average score per area is above Level 2), but which are ranked higher in “Ability to Execute” (above Level 3 on average) than “Completeness of Vision” (below Level 3 on average). 7 airlines t these parameters, so this is the smallest of the four groups. Challengers do more of “execution” but in a less structured and organized way. Or they have advanced digital optimization tools and do advanced analytics and testing, but digital optimization and experimentation are done on an individual level or within a small digital optimization team. The value of experimentation and CRO are not recognized on a broader organizational level. I. People and company support: 4 out of 7 airlines in this group have a CRO team in place, and 2 airlines claimed they don’t have a dedicated conversion optimization resource. This means digital optimization is mostly done on an individual level. Digital marketing specialists perform digital optimization activities, but CRO is still not a core ecommerce process. This is evident from the responses regarding organizational support: Only 1 of the 7 airlines in this group said that CRO is recognized and supported by top management. For 5 out of 7, CRO is recognized on an individual or ecommerce department level. II. Skills and knowledge: 4 out of 7 airlines in this group claimed to have a deep knowledge of conversion optimization (CRO, UX, analytics, A/B testing, copywriting). However, this knowledge is mostly gathered on an individual level, by CRO or digital optimization enthusiasts NEXT STEPS FOR CHALLENGERS: EMPOWER! Challengers understand the value of digital optimization and CRO but still struggle to get the companywide exposure and support needed. CRO experts and their department managers need to be proactive in explaining the value of digital fi fi 2023 Airline Digital Optimization Yearbook and specialists. The other 3 airlines claimed to have only basic CRO knowledge and skills. III. User & UX research, tools and analytics: Airlines in this group are more advanced when it comes to user research, analytics and digital optimization tools. 5 out of 7 do user research activities on an above-average level (Level 3 or Level 4). All are well above average in digital analytics (they do detailed funnel analytics, attribution modeling and cross-device tracking), and 5 out of 7 even claimed they do advanced digital analytics and use advanced tools for visualization (like Google Data Studio & BigQuery, Tableau, Qlik, Power BI). The challenge for this group is that activities are sometimes still done for silo tests and optimizing micro metrics, rather than within a long-term, companywide optimization and digital product plan. IV. Test quantity: This group performs A/B tests and experiments at a slightly above-average rate. 4 out 7 airlines do A/ B testing on a regular basis, but only 1 airline in this group does at least 5-10 tests every month. Challengers need to be careful not to use tests as the main optimization activity, but rather use them for validation of hypotheses only. V. Process, budget and knowledge sharing: Lack of organizational recognition for digital optimization and CRO is evident for Challengers. Only 1 of the 7 airlines doesn’t have a budget for digital optimization activities (for 5 others, it’s a part of the ecommerce budget), and 1 claimed to have a dedicated budget for optimization and experimentation. All but 1 of these airlines claim to have a digital optimization process in place, yet only 3 of them have it documented and structured. optimization to their key stakeholders. Be transparent about experimenting and make case studies out of winning tests with clear ROI calculation. This will help you get the recognition and resources needed to take the next step – forming digital optimization and CRO teams and structuring activities and tests in a strategic optimization plan. 22 Visionaries is the largest group, consisting of 25 airlines. The airlines in this group are not Laggards, so their average score is above Level 2 across all areas. Visionaries are airlines that ranked higher in “Completeness of Vision” (above Level 3 on average) than “Ability to Execute” areas (below Level 3 on average). I. People and company support: Visionaries have a clearer understanding of the potential and importance of CRO and digital optimization than Laggards and Challengers. Their average score is above Level 3 across the People, Skills and Organizational Support areas. 76% of airlines in this group claim to have a digital optimization or CRO team in place. 6 even claimed to have Level 5 full-scale conversion teams. 40% of airlines in this group claimed to have top management support for digital optimization and CRO (at least Level 4). II. Skills and knowledge: 19 out of 25 airlines in this group claimed to have a deep knowledge of conversion optimization (CRO, UX, analytics, content & copywriting). 9 airlines even stated they have advanced CRO knowledge (UX excellence, advanced analytics, conversion centered design) or better. III. User & UX research, tools and analytics: Visionaries have the means and vision but don’t execute at the same level as Leaders or even, in some areas, Challengers. Therefore, this area, along with testing quantity, is where they lag behind. 44% of airlines in this group still don’t do systematic user research and user feedback activities, and 48% mostly use simple tools for such activities (simple user research tools, simple A/B testing tools). One area that really prevents Visionaries from executing better is the internet booking engine. 72% said their IBE makes it di cult to do A/B testing and experiments, and none of the airlines in this group said their IBE is exible enough to do more complex experiments (Level 4 or Level 5). IV. Testing quantity: This is the key area in which Visionaries need to improve. Experimentation is a crucial part of the digital optimization and CRO process. Limitations with tools and especially IBE result in less-thanoptimal execution of A/B testing and experimenting. Only 1 out of 25 airlines in this group do at least 5-10 A/B tests and experiments per month. Further, 52% of airlines in this group still test only on a project or ad-hoc basis. V. Process, budget and knowledge sharing: 96% of Visionaries follow a digital optimization process, 56% claim it is documented. 68% say they have a budget for conversion optimization, but for most it's part of Marketing or ecommerce budget. NEXT STEPS FOR VISIONARIES: ENABLE! Educate the IT team on the importance of experimentation to get the right tools in place. Implement an agile, modular digital platform and internet booking engine that supports different ows, instances and more complex A/B testing (like split path testing). Consolidate development to support CRO activities and start building digital optimization teams (digital product owner, conversion ffi 2023 Airline Digital Optimization Yearbook fl fl fl VISIONARIES specialist, analytics specialist, front-end & backend developers). Dedicate development resources for testing (as part of your product development sprints). Start with agile and systematic user research activities to really understand your users’ friction points. Once the proper tools and team are in place, increasing the number of experiments is a critical next step for this group, as it has a direct in uence on faster learning, growth and ultimately innovation. 23 8 out of 55 airlines were classi ed as Leaders. These are the airlines that are the best at doing digital optimization and experimentation. Airlines in this group are on average close to Level 4 (some are even higher) in all areas. There are 3 medium-sized airlines in this group; the other 5 are all large airlines. It’s not a coincidence that bigger airlines dominate this group. The resources and expertise needed to build a CRO-centric organization can be an issue for smaller airlines. However, digital optimization should not solely be the domain of the biggest airlines. Even smaller airlines can advance to a higher level of digital optimization maturity with a smart and agile strategy. There are airlines in this group that have achieved a high level of CRO maturity and high experimenting volumes with a combination of insourced resources and outsourced help. I. People and company support: Digital optimization and experimentation have become a part of the culture for these airlines. CRO, testing and experimenting are recognized as crucial processes on an organizational level. All Leaders claim CRO has support at least at the VP level, and 6 out of 8 even said conversion optimization is recognized as a crucial activity by their organization (Level 5). All Leaders have dedicated CRO teams in place with advanced CRO skills and knowledge. 4 out of 8 claimed to have a full-scale digital optimization team (a team that consists of UX researcher, copywriter, front-end developer, back-end developer, and other experts), or several digital optimization teams. Roles like Conversion Optimization Program Manager, Senior Digital Optimization Specialist, and CRO Front-End Developer are common in this group. Most of the digital optimization teams are hybrid: a combination of internal digital optimization resources and dedicated outsourced CRO experts. fl 2023 Airline Digital Optimization Yearbook fi fl LEADERS II. Skills and knowledge: Leaders are pushing their CRO skillset to the next level. They all have at least a deep knowledge of CRO, UX, analytics, A/B testing, content and copywriting. More than half (5 out of 8 airlines) of this group go even further and claim to have advanced digital optimization knowledge (Level 4 or Level 5). III. User & UX research, tools and analytics: Leaders recognize that understanding your users is key. They all do regular user research and feedback activities, extensive UX research, and usability testing. Half (4 out of 8) of these airlines claim to do scheduled and planned moderated and unmoderated user testing, customer struggle scores and prototype testing. When it comes to analytics, all but one of the Leaders do advanced digital analytics and use special visualization tools. All Leaders claimed to use testing platforms, and 3 out of 8 have built their own tools for testing. One other key characteristic of Leaders – they all have exible internet booking engines. Half of the airlines in this group even claimed to have a completely exible IBE (Level 5) that empowers experimentation. IV. Testing quantity: A true Leader can be recognized by the number of experiments they run. All airline digital optimization Leaders test and experiment on a regular and planned basis (at least 2-5 tests per month). What’s more, 6 out of 8 airlines in this group claimed to do testing at a respectable scale of 5-10 experiments per month. V. Process, budget and knowledge sharing: All but one of the Leaders follow a documented digital optimization process. All Leaders have a budget for conversion optimization, 50% say it’s a special dedicated budget just for optimization and experimentation. 24 NEXT STEPS FOR LEADERS: SCALE, AUTOMATE, AND FOSTER A CULTURE OF EXPERIMENTATION Even Leaders can take the next step since digital optimization and CRO is about constant learning and growth. While airline CRO Leaders are the best among the airline industry, a gap still exists here compared to the travel industry experimentation elite like Airbnb, Uber, Booking.com, Skyscanner, Hopper or eDreams. We’ve seen several airlines doing that lately by exploring different models to embed experimentation and CRO in their digital product teams. This requires additional investment in digital, and so it’s not a coincidence that half of our Leaders increased their digital optimization team signi cantly over the past 12 months. The real challenge for this group is nding a way to do experimentation on an even larger scale and catch up with the travel and digital elite. Leaders need to “democratize” experimentation and work on creating a decentralized organization to support experimentation and innovation on a bigger scale. fi fi 2023 Airline Digital Optimization Yearbook 25 2023 AIRLINE DIGITAL OPTIMIZATION SURVEY – 10 KEY STATS Our 2023 survey shows that most airlines are re-investing in their digital initiatives and teams. In fact, several traditional carriers claimed that the pandemic was an opportunity for them to commit to digital, ecommerce and direct distribution. Below you can nd 10 key stats from our 2023 Airline Digital Optimization Survey that highlight the key developments over the past 12 months: 60% 51% of airlines have increased their digital optimization teams over the past 12 months (see the next section for more detail). User-centricity remains a problem for airlines: 51% don’t do regular user research activities. Only 20% do scheduled moderated and unmoderated user and prototype testing. 40% of airlines ranked 2.5 or lower across all 8 digital optimization categories, an improvement compared to 58% in our 2022 survey. 40% of airlines ranked 3.0 or higher on average; this share was 31% in 2022. 8 airlines were classi ed as Leaders, and these Leaders averaged 4.1 across our 8 CRO categories. 58% of airlines have a digital optimization team in place. of airlines have a documented and structured conversion optimization process (a big improvement, as this share was only 23% in 2022). 58% of airlines claim that their internet booking engine (IBE) is not exible enough to allow experimentation. of airlines said investment in the internet booking engine (upgrade, optimization or simpli cation) is one of their focus areas in 2023. 75% 15% of airlines have dedicated budgets for CRO and experimentation. For 56%, it’s part of the marketing or ecommerce budget. fi fi 2023 Airline Digital Optimization Yearbook fi of airlines don’t run experiments at all or only do so on an ad-hoc, project basis (on the other hand, 16% of airlines run at least 5-10 experiments per month). 62% 45% fl 56% of airlines combine digital optimization and personalization activities within the same team. 52% say they use a personalization engine or a tool for personalization. 26 2023 AIRLINE DIGITAL OPTIMIZATION SURVEY – AIRLINE DIGITAL OPTIMIZATION TEAMS GROWTH The COVID pandemic disrupted the airline industry, and many had to downsize their digital optimization teams: 37% of airlines in our 2022 survey said they had to decrease the size of their digital teams.The good news is that for most airline digital teams, the period of decline is over and we’ve seen airlines starting to re-invest and refocus on their digital initiatives. 60% of airlines in our 2023 survey said they increased their digital teams during the past 12 months, and 22% even claimed to have grown their digital optimization teams signi cantly. During 2022, we saw an in ux of new airline digital and specialized CRO roles on our Diggintravel Airline Digital Job Board. Re-hiring some of the lost digital optimization roles is the rst step, but it’s not enough. The pandemic caused a lot of uctuation among digital leaders and other digital optimization roles, and a lot of internal knowledge and knowhow was lost. Our survey shows that the majority of airlines now have digital optimization teams in place, but there is still a gap when it comes to knowhow and other key areas of the digital optimization process, like user and UX research. And while the increase in the share of airlines that have a documented and structured conversion optimization process (from 23% in the previous survey to 45% this year) is encouraging, more than half of airlines still don’t have one. Filling the skill gap and establishing a process that connects digital product and digital optimization teams should be the next step on their experimentation and CRO journey. Did you decrease or increase your digital optimization (product, analytics, UX) team during the past 12 months? We increased our team signi cantly We increased our team slightly The size of our digital team stayed the same Untitled 1 We had to do a slight reduction in our team because of COVID Untitled 2 We had to decrease our team signi cantly because of COVID Untitled 3 0% 6% 11% 17% 29% 34% 40% 27 fl fi fl fi fi fi 2023 Airline Digital Optimization Yearbook 23% It all started with an effortless shopping experience What if Airline Booking Flows were transparent and self-explanatory? And what if consumers would feel like being taken care of while travelling? Visit branchspace.com to learn more 28 Smarter Travel Marketing 2019 TITLE OF DIGITAL SURVEY 2023 SURVEY DETAILS Airline industry insights for a higher conversion Month 2019 | © Diggintravel Smarter Travel Marketing I. 2019 T IT L E O F D I G ITA L SURVEY PEOPLE Airline industry insights for a higher conversion Month 2019 | © Diggintravel WHO PERFORMS DIGITAL OPTIMIZATION (CRO) TASKS IN YOUR ORGANIZATION? • • • • Level 1: Online marketing specialist Level 2: Ad-hoc or part-time conversion optimization resource Level 3: Full-time conversion optimization resource (CRO specialist) Level 4: Small digital optimization team (product owner, web analyst, designer, developer, CRO specialist) • Level 5: Full-scale digital optimization team (in addition to the small team - UX researcher, copywriter, front-end developer, back-end developer, other experts), or several digital optimization teams 40% 33% 27% 20% 13% 7% 0% Level 1 Level 2 Level 3 By Size 70% 40% 56% 30% 42% 20% 28% 10% 14% Level 1 Small Level 5 By Type 50% 0% Level 4 Level 2 Level 3 Medium 2023 Airline Digital Optimization Yearbook Level 4 Level 5 Large 0% Level 1 Level 2 Level 3 Level 4 Level 5 LCC FSC 31 KEY STAT: AIRLINE DIGITAL OPTIMIZATION TEAMS ARE GROWING The airline industry has come a long way when it comes to digital maturity and digital optimization teams. When we started with our benchmarks in 2017, only a good third of airlines had digital optimization teams in place; now, 58% of airlines have a dedicated conversion optimization team. With airlines re-investing in and focusing on digital channels, it’s not surprising that in our survey, more airlines than ever claimed to have a full-scale digital optimization team or even several digital teams with CRO as their core focus (18% of airlines were at Level 5). When it comes to digital optimization teams, there is a big difference between LCC airlines (78% of them having dedicated teams) and FSC airlines (only 49% have dedicated digital optimization teams). While most airlines recognize digital optimization is not a job for one person, there is still a signi cant share (31%) of airlines that don’t have a specialized and dedicated CRO resource in place. This share jumps to 51% for traditional FSC airlines, as many of them still don’t understand the value of a structured digital optimization process. Having a dedicated CRO person or a program manager is the rst critical step airlines need to take if they want to build an optimization program. The next step is setting up a team that will prepare and execute the conversion rate optimization (CRO) roadmap. Most airlines that don’t have a CRO team in place claim lack of budget, digital maturity, knowledge, or talent as the key obstacles to doing so. Identifying rst optimization scenarios, getting early wins and communicating the ROI of increasing conversion rates should help airlines get (budget) support for their optimization and experimentation programs. Establishing a small, centralized optimization team (UX You can read how Air Europa’s digital team evolved through different stages of our maturity model, from a single CRO enthusiast to a full-scale digital team that runs CRO activities, in our “Ask the Expert” section. Most digitally mature airlines understand the importance of digital optimization. All 8 Leaders from our research have dedicated optimization teams. Furthermore, 4 out of 8 Leaders claimed to have a full-scale team (Level 5) or several digital product and optimization teams. With the growth of airline digital teams (we see more and more airlines getting several digital product teams in place), determining the best way to structure and organize your team becomes more important. Many airlines are trying to gure out the optimal way to embed optimization and CRO in their digital teams and processes. As you progress in your CRO maturity (from Level 3 to Levels 4 and 5), choosing which organizational model works best for your airline can be challenging. There is no right answer; some airlines have CRO as a separate team, others have CRO embedded in their product teams. What matters is that you nd the model that empowers your digital product teams to leverage CRO and experimentation best practices in their product lifecycle without too much hassle and bureaucracy. 32 fi fi fi fi fi 2023 Airline Digital Optimization Yearbook researcher / designer, front-end developer) is crucial for a successful program. Having dedicated developer resources for experimentation also has a huge impact on the number of experiments you’ll be able to run (see Section V). You can learn more about different organizational models, from centralized and hybrid to completely decentralized models, in our “Ask the Expert” section with digital expert and former Digital Analytics and Optimization Manager at WestJet Airlines Matt Ravlich. During our interviews and airline CRO work last year, we saw an increased trend of more digitally mature airlines working on hybrid or matrix models that allow different teams to optimize and experiment on different digital products in parallel and, more importantly, to deploy new products and features much faster. fi 2023 Airline Digital Optimization Yearbook You can learn how American Airlines transitioned to a decentralized model that enabled them to deploy new features within a couple of days in our “Ask the Expert” section. You can also nd an example of a CRO role embedded in the matrix Tribes and Chapters organizational model that Air New Zealand implemented in the “Examples” of Section VIII. 33 KEY TRENDS: WHAT CHANGED COMPARED TO 2022 Airlines who claimed to have a dedicated optimization team have them set up in different ways; 69% of airlines who have a CRO team said their team is a combination of in-house and outsourced resources. The rest (31%) claimed they run digital optimization and testing (experimentation) completely in-house. None of the surveyed airlines claimed to outsource their testing and optimization completely to an external agency/service provider. 50% 40% 30% 20% 10% Level 1 Level 2 Level 3 2023 Level 4 Level 5 2022 When it comes to the setup of digital optimization teams, we didn’t see a big shift compared to last year’s survey. The share of airlines that have a digital optimization or CRO team in place (Level 4 or Level 5) stayed the same at 58%, and so did the share of airlines where CRO is still performed by an individual (Level 1 to Level 3). By comparing the 2023 and previous survey results, you can see that the biggest jump happened in the Level 5 category: 18% of the surveyed airlines claimed to have a full-scale digital optimization team or several digital optimization teams, a 6% increase compared to 2021-22. In our intro section, you’ve seen that 60% of airlines increased their digital optimization teams last year, which implies that airlines who already have teams in place are either investing in building several digital product teams or are expanding existing digital teams with specialist roles. During the pandemic, many specialist roles were lost due to downsizing, but we can now see airlines recruiting for specialized digital optimization roles (e.g., analytics, digital research, CRO specialists, and program managers) again. We run optimization and testing (experimentation) both in-house and together with an agency/service provider We run optimization and testing (experimentation) both in-house and together with an agency/service provider We run optimization and testing (experimentation) completely in-house We run optimization and testing (experimentation) completely in-house 0% 2023 Airline Digital Optimization Yearbook 10% 20% 30% 40% 50% 60% 70% 34 fi fi 0% Experimentation and testing require a speci c skillset, so it makes sense for airlines who are starting to build their CRO program to outsource some of the roles. But regardless of how you plan to build your digital optimization team (in-house, outsourced, or hybrid), you need to have a digital and ecommerce strategy that recognizes conversion optimization as a strategic pillar. You need to map strategic assets (knowhow, process, experimentation learnings, user research data) and see what you can outsource. You can outsource specialized skills (e.g., advanced digital analytics, front- or back-end development, UX research, etc.); however, the strategic part (planning, managing, goals) of the testing and optimization process needs to be in-house. You need to de ne clear metrics, focus on things that have a direct impact on the bottom line, and be able to explain the value of increasing conversion rates to your management to get support. ASK THE EXPERT: AN AIRLINE’S JOURNEY: FROM ONE-MAN BAND TO A FULL-SCALE DIGITAL OPTIMIZATION AND CRO TEAM Ismael Monzon Digital Growth Team Manager at Air Europa NOTE: All Ask the Experts interviews are excerpts from interviews with airline digital leaders on the Diggintravel Podcast. If you want to learn more, you can nd the full interviews by listening to the Diggintravel Podcast or visiting the Diggintravel blog. Ismael’s journey started in 2017 when he joined Air Europa as a digital analyst, and he’s been working on their digital optimization maturity ever since. “I joined the company in 2017. I joined it as Senior Digital Analyst, as a member of the web team of Air Europa. It was a small team, but the board directors at that period wanted to increase the digital channel sales. I would de ne this period like one-man band. I was the only person who was working on the analytics and CRO tasks, and I had a lot of work. There were multiple funnels to track and optimize. I remember that I had to improve the technical implementation; for example, I remember that the Enhanced Ecommerce was not con gured." Once they set up the analytics basics, Ismael started to work on other parts of the CRO process. Because they didn’t have in-house resources, they worked with a specialized agency to get their rst CRO activities going. things to do. At the end of 2018, I started to share our CRO project with Fusion which was a CRO consultancy company that was specialized in CRO for airlines.” At that time, Air Europa was moving from Level 2 to Level 3 in our Airline Digital Optimization Maturity Model, which means they had a dedicated person, but not a team, to manage conversion optimization, digital analytics, and UX research. After building the foundations with analytics and measurement, Ismael started to work on implementation of other CRO tools in addition to digital analytics with Google Analytics. They built a small team and started with customer experience analytics. “In 2019, we moved to the next step. We created the digital analytics team. Two people joined it. We wanted to move faster, doing more things, so these two people helped me to go faster with all our tasks. As I told you before, our platform was complicated. There were too many issues, too many bugs. We started to work with Tealeaf and we got results quickly. We started to detect bugs, we started to review sessions, identify usability problems." Then Air Europa went through a turbulent time during the COVID crisis, during which they developed a new digital platform. With the rebound and recovery of the airline industry, Air Europa started to invest in their digital and CRO team again. “The initial plan was very basic. There wasn’t user research or session replay. A lot of tasks, a lot of 2023 Airline Digital Optimization Yearbook fi fi fi fi 35 ASK THE EXPERT: The airline saw a shift from customers using traditional o ine channels to using their direct channels and decided to take advantage of this opportunity. digital analytics, content. More or less in the last eight months of 2022, there were 12 new people in the team. “In 2021, the company improved its sales through the direct channel. The directors wanted to keep it and improve the sales. I think that is our reality. A lot of customers have moved from physical purchases to digital purchases, not only in airlines but for a lot of business. So the directors of the company wanted to go farther with the digital sales, and we had a new site and app, but we wanted farther. Last month we have been working on de ning the processes, the methodology all worked together on how to integrate everything, the new people with the current processes. We split the team into two areas. One of them is more related with product management; it is the digital product area. The other one is the digital growth. The rst one, the digital product team focuses on pulling the platform with the product management, working with It and providers such as Amadeus or our IT team. And the digital growth team focuses on selling." So we started to plan for the digital channel and took advantage of this new platform. The approach was that the team had new members in all areas – in product management, UX designers, 2023 Airline Digital Optimization Yearbook fi fi ffl 36 ASK THE EXPERT: AIRLINE DIGITAL OPTIMIZATION MATURITY: HOW TO TAKE THE NEXT STEP? Matt Ravlich Digital Expert and former Digital Analytics and Optimization Manager at WestJet Airlines NOTE: The process of organizing digital teams as your optimization program grows and matures is a fascinating topic, and it’s one we’ve explored in detail in the past; if you want to learn more about various experimentation organizational models on a broader company level, listen to our interview with experimentation leader Stefan Thomke on the Diggintravel Podcast. Matt Ravlich developed his own optimization maturity model, so we were curious to hear his view on the best way to start the airline digital optimization maturity journey. “There are 5 steps in the model. I think it’s important too that sometimes it’s not really a linear process as well. It’s like you can move from different stages back and forth depending on your needs. First off is enterprising, I think this is more when you onboard the tools for testing and personalization. I’m very familiar with Adobe Target, and that’s what we used at WestJet, and that’s what I’m using with a lot of our clients today, which has the testing capabilities but also personalization. But the rst step in the optimization model is enterprising, and this is where you have maybe one individual who’s part of a digital team or part of a content team who starts working on testing." fi 2023 Airline Digital Optimization Yearbook The role Matt described is something we’ve called “digital optimization enthusiast” or “digital optimization champion” in the past in our models. "That’s a great name for it, actually. Very enthusiastic about testing, sees the potential. I feel like I was this person when I was at WestJet. [laughs] This was my introduction to getting into data and testing. I started working and doing a bit of this and building out that program. I saw the potential and got very excited and bought in really easily, and then I tried to tell everyone, “Hey, this works.”. You can start doing a few tests here and there. My suggestion is always to look for lowhanging fruit with colors, copy, things like that. Easy things you can easily change." Most airlines move through different maturity phases (for example, from a centralized team to models like LATAM Airlines that have several digital teams working on optimization). Looking back through their journey at WestJet, I was curious about some of the key learnings for Matt and his team. I became the team lead for optimization, and then I really started to dig into why – what I noticed was the team was doing some great testing and having some great results and giving people reports, but nothing was being actioned. Changes weren’t taking place on the site. It was obvious that there were clear winners that weren’t being accepted. I was curious why this was because it had been proven that certain things generated more revenue in certain places, or a better experience, but a lot of times there was testing results that were being ignored." 37 ASK THE EXPERT: "What I realized was with the centralized model, it was really hard for one team to go in to another team – say a product team that’s very focused on their roadmap – and try to say, “Hey, you need to do this” or put tickets on their roadmap and say, “This is important” without the buy-in. It was like you threw things over the fence and just hoped that people would take it. What I really think is essential is getting the buy-in of the product teams that you’re working with and the things that you’re testing to understand the testing process and understand what goes into it, and then get them excited about wanting to test things and wanting to run experiments and make that really good user experience. I think ultimately, their goal is to make the best experience for their guests, and testing is essential to doing that. So getting into their sprint cycle or their process and building testing into that process is key, and that’s something that we really try to do at WestJet. That’s where you start to move into the hybrid model and move up the maturity, when you get testing right into that sprint." I like being a loyal customer, but Customer Retention requires an extra mile. What if a digital commerce platform would enable Customer Retention end-to-end, from earn to burn and integrated into all digital touchpoints? Visit branchspace.com to learn more 2023 Airline Digital Optimization Yearbook 38 ASK THE EXPERT: TRANSITION FROM DISTRIBUTED TO DEDICATED AIRLINE DIGITAL PRODUCT TEAMS Mariana Fonseca Medina VP of Digital, Loyalty and Marketing at Virgin Voyages, prior Managing Director – Digital Customer Experience at American Airlines During her time as a Managing Director of Digital Customer Experience at American Airlines, Mariana was involved in a big digital transformation project, part of which was focused on how the American Airlines digital teams were organized. “I was very fortunate that during my time at American, we went through a massive digital transformation, trying to move away from distributed teams – teams that basically took care of – call it a platform or a type of technology. There was someone that did the common services, and there was a team that did website stuff and app stuff, more around the platform. We actually transitioned to product teams that were more aligned to OKRs." Mariana emphasized the importance of having proper metrics if you want “productization” to work: "All of these learnings around how to set proper OKRs and establish teams actually came from that long and di cult time, but ultimately, in my opinion, one of the most successful implementations of productization that I’ve seen. It’s a good hybrid for a super large company of having product teams – that is, teams whose only responsibility is to be the most effective at Mariana mentioned that having a dedicated backlog is crucial. If you want to make your digital product-focused organization work, having a dedicated backlog for each of the products is key for building and optimizing several digital products at the same time. Mariana shared an example of the American Airlines seat map digital product, which was their pilot case for the new way of working and organization. "I became the team lead for optimization, and then It started with pilots that we did maybe four or ve years ago around very small products just to see how it would work. We took a team that would only work on the seat map, which sounds like a lot, but if you think of companies like Booking.com, they have full teams just working on one widget within the home page. So a team working on the seat map wasn’t so bad. So you had a full team, you had dedicated product designers or UX resources, you had dedicated engineering resources, and then obviously you had a dedicated product owner, and they had a backlog. They said, ‘Our number one goal is to drive attachment, more people selecting seats.’ Then they did the proper amount of research and understanding what the customer wanted and where the gaps were." 39 fi ffi 2023 Airline Digital Optimization Yearbook shopping and buying, for example – with technology teams focused on supporting shopping and buying for them, where they can have a dedicated backlog and teams and they can become really fast and nimble in delivering." ASK THE EXPERT: Once they enabled a dedicated product team to decide and work on their own, Mariana and the team saw a big improvement in the amount of time needed to deploy new product features. "That team was able to drive their own features. They didn’t have to check with anybody else. They prioritized the highest things that they thought were going to contribute to value, and then they would deploy when ready. They actually did it with this concept of scheduled weekly or monthly releases, which was great because every time they learned something new – let’s say we have to have a different disclosure for families, another big pain point. Families want to sit together. They would be able to develop it and deploy it within a couple of days. Coming from an airline that took a really long to do anything, establishing that was quite incredible." 2023 Airline Digital Optimization Yearbook When you transition to a decentralized model, the obvious question is: How do you manage to ensure that all product teams are aligned? "This gets asked a lot, like people are going to go rogue and build whatever they want. I’m like, isn’t that what leadership is here for, ultimately? We are the checks and balances. If teams do go rogue, then shame on leadership for not sharing what the larger corporate objectives are so that they understand they need to support those – so they’re not going rogue; they should be building their OKRs in support of large corporate objectives. You do have to create some central structures to support decentralization of product teams and encourage a lot more collaboration than before in a way that’s organic and not forced. But I think all of that is well worth the effort because at the end of the day, you end up having a much better way of working." 40 II. Smarter Travel Marketing 2019 T IT L E O F D I G ITA L SURVEY SKILLS AND KNOWLEDGE Airline industry insights for a higher conversion Month 2019 | © Diggintravel Q: WHAT IS THE CURRENT LEVEL OF DIGITAL OPTIMIZATION SKILLS IN YOUR ORGANIZATION? • Level 1: Basic online and digital marketing knowledge • Level 2: Basic conversion optimization, UX and analytics knowledge • Level 3: Deeper knowledge about conversion optimization: CRO, UX, analytics, A/B testing, content & copywriting • Level 4: Advanced CRO knowledge (Level 3 + UX excellence, user behavioral knowledge, advanced analytics including segmentation) • Level 5: Experts in conversion optimization (Level 4 + conversion-centered design, analytics experts, testing automation, personalization) 40% 33% 27% 20% 13% 7% 0% Level 1 Level 2 Level 3 Level 4 By Size By Type 40% 50% 32% 40% 24% 30% 16% 20% 8% 10% 0% Level 1 Small Level 5 Level 2 Level 3 Medium 2023 Airline Digital Optimization Yearbook Level 4 Level 5 Large 0% Level 1 Level 2 Level 3 Level 4 Level 5 LCC FSC 42 KEY STAT: ADVANCED DIGITAL OPTIMIZATION SKILLS ARE GAINING TRACTION A signi cant portion (36%) of the airlines in our survey still don’t have the in-depth knowledge and skills required to do ongoing and systematic digital optimization. These airlines said they have basic online marketing knowledge or basic conversion optimization knowledge (Level 1 or Level 2). Most of the small airlines (50%) are in this group. But on the other side of the spectrum, the share of airlines that claim to have advanced CRO and digital optimization skills within their organizations (Level 4 or 5) is growing and has reached 27%. As in most categories, low-cost airlines are also more advanced when it comes to advanced digital optimization skills, as 39% have deeper CRO knowledge and skills (at least Level 4) within their digital teams. Only 21% of traditional full-scheduled carriers claimed to have these skills. We can also see that advanced skills are mostly the domain of large airlines, where teams are bigger and there are more specialized roles. The biggest group when it comes to skills is still in the middle; 36% of airlines claim to have deeper knowledge of conversion optimization (Level 3) but do not have advanced skills within their teams. This means that most airlines are recognizing the importance of digital optimization and CRO skills for their digital teams but don’t have the size or the resources yet to acquire highly specialized skillsets. Smaller airline digital teams can ll skills gaps (e.g., advanced analytics, specialized tools, UX research, etc.) with external help via specialized agencies or freelance specialists. You can nd some recommendations on that in our “Ask the Expert” section. increasing conversion in an ongoing and systematic way (at least Level 3). When we looked at other categories (e.g., user & UX research activities, test quantity) and asked airlines about the reason they don’t do more CRO activities, lack of knowledge and skills was stated as one of the main reasons. Acquiring the right skillset and knowhow is the rst step, and we see more and more airlines recognizing this. Conversion optimization requires people with different roles and skills to work as a team with a joint goal and to follow a structured process. It is a continuous process of analyzing data (analytics), understanding user behavior (user and UX research), optimization, and testing. You need to connect all your digital experts (analytics, product, user research, CRO) and follow a systematic CRO process. By implementing a structured conversion optimization process and agile CRO teams, airlines can connect these different roles and skillsets, which will result in higher conversion rates and a better digital experience. The good news is that airlines are starting to recognize this, as almost half of the surveyed airlines (45%) said their digital teams follow a structured process for digital optimization; 40% of airlines said they have a CRO process in place, but it is not documented or structured. Only 15% of airlines said they don’t have a CRO process in place. Over the last two years, we’ve seen several airlines systematically add CRO elements to various roles in their digital teams, from digital analytics and front-end development to customer insights. As you can see from our survey results, low-cost airlines are at the forefront of this trend. It is an encouraging sign that now almost twothirds of the surveyed airlines claim to have the skills required for digital optimization and fi fi fi fi 2023 Airline Digital Optimization Yearbook 43 In our “Examples” section, you can see a job description for the CRO Program Manager role at easyJet, along with other digital roles with embedded CRO elements, to learn how easyJet has built a full-scale CRO program. Does your team follow a process for digital optimization (CRO)? Yes, it is documented/structured. Yes, but it isn't documented/structured. No. Untitled 1 0% 7% 14% 2023 Airline Digital Optimization Yearbook 21% 29% 36% 43% 50% 44 KEY TRENDS: WHAT CHANGED COMPARED TO 2022 40% 32% 24% 16% 8% 0% Level 1 Level 2 Level 3 2023 Level 4 Level 5 2022 “Skills and knowledge” is the category where we saw the biggest drop in our 2021-22 survey. Because of the COVID crisis, many airlines had to downsize their digital teams, and we saw a shift from Level 4 back to Level 2 CRO skills. A lot of specialized knowledge and skills were lost during the turbulent pandemic times. process in this year’s survey – a big improvement from only 29% in 2021-22. Another thing we’re seeing lately, especially with airlines that are focused heavily on ancillary revenue, is the trend of merging marketing, ecommerce, ancillary revenue, and revenue management into a joint digital revenue process. Most advanced airlines (low-cost airlines are at the forefront here) are expanding CRO and experimentation concepts beyond the core digital product. You can nd examples of ancillary revenue roles with CRO and experimentation elements in our “Examples” section. In the “Ask the Expert” section, you can learn how one of the most successful airlines when it comes to generating ancillary revenue, Frontier Airlines, is leveraging experimentation with their pricing models – and why making small, iterative tweaks based on user feedback can have a really big impact when it comes to generating ancillary revenue and your digital products. Similarly to the “People” category, we’re seeing a rebound when it comes to skills and knowledge. Our survey shows that the biggest jumps happened in advanced skills (Levels 4 and 5), as 27% of airlines claimed to have such skills within their departments, while this share was only 21% in 2021-22. An additional signal that airlines are re-investing in their digital teams is that we’re seeing more airline job opportunities for specialized CRO and digital optimization posted on our Airline Digital Job Board. Advanced skills are mostly the domain of large airlines. The other big jump, one that is more signi cant, happened around airlines having a CRO process in place: 45% of airlines claimed to follow a structured digital and conversion optimization 45 fi fi 2023 Airline Digital Optimization Yearbook ASK THE EXPERT: HOW TO FILL THE SKILL GAP Ismael Monzon Digital Growth Team Manager at Air Europa One question we often get from airline people who are going down the path of digital growth, growing the digital team from a small team to a bigger one, is: How do you decide which skills to get in your team and what to outsource? “I always think the same. It depends quite a lot on the company and the mentality of the company. In Air Europa, we have a lot of strong [external] partners, but it’s more related with the tools. For example, we work with AB Tasty or we work with Quantum metrics." Because they have expertise for their tools and the processes covered by their tools? "It’s not only the tool. That is right, and they are the experts and they help us with the con guration or with some adjustments, but the main thing is that we work together. They provide us help with the tool and we know what we want to achieve. Working together is ne because working with different perspectives, different minds, different experiences is a perfect balance. But it’s also true that, at least in my experience with some agencies, it’s a bit complicated because at the end, you need something quite fast. I know the agencies are quite exible, but it’s true that it sometimes changes quite a lot every day, and you need to move faster. You have a quick weekly meeting and you have some work, but in the middle of the week the priorities have changed. fi fl fi fi 2023 Airline Digital Optimization Yearbook So sometimes I think it’s a bit complicated to work with external providers." You need to be very aligned and really communicate the strategy for this part for it to work. Then the agency can basically work as fast as you want, right? "Sometimes we needed something that we have experienced in the past. For example, for the SEO or CRO area. I think, at least in my experience, something that works quite well is working with a freelancer. Maybe they can work together with the team with constant communication." And bring new knowledge? "Yeah, because freelancers or people who are very focused on several parts, I think they can help us to solve very speci c or very high-level issues [that require specialized knowledge]. It’s something that we have worked in the past, and I think it has worked. In the past we thought it’s better to work with a very highly recognized agency. We started with a lot of ideas with the top consultants, but at the end, after a year, that member moved to another team and it’s quite complicated. A lot of priorities, a lot of clients. You are not the big latest client. The big agency moves resources to another latest client. So sometimes it’s complicated, and I prefer a closer relationship, people who work together [as a part of your team]. You work always with the same people. It’s not a project manager that you don’t know who is working after him or her. That’s my opinion." 46 ASK THE EXPERT: AIRLINE ANCILLARY REVENUE LEADERS MERGE MARKETING, ECOMMERCE, MERCHANDISING, AND PRICING WITH CRO AND EXPERIMENTATION Jake Maloney Director Ecommerce and Digital Products at Frontier Airlines Frontier is an ecommerce powerhouse. In your most recent Q1 earnings release, the company announced that it is selling an average of $69.28 in ancillary products per passenger with the goal of potentially $70 this calendar quarter. That’s an enormous amount of optional products. How has Frontier gotten to the point where you’re so successful in attaching so much to the shopping cart beyond just the base fare? “We are indeed one of the most successful in selling ancillary and bringing in that revenue. There’s a lot of moving parts to that, but I think a big part of that is really thinking through how we merchandise things and when we merchandise things, but also pricing variations and really intelligently thinking through how pricing affects that attachment and the propensity of the customer to ultimately convert. So again, there’s a lot of moving parts to that, but it’s primarily pricing strategy and merchandising decisions." Are you able to target customers with certain types of products? Are you able to get personalized offers or personalized targeting with the ancillary products that you sell to customers? "We aren’t doing that today from a product perspective. I think that alludes to the magic of the fl 2023 Airline Digital Optimization Yearbook customer experience that we have today and the pricing structure that we utilize. Because we’re not able to test those things, we are actually making some pretty big movements just from minor user experience tweaks and pricing strategy. We do have that on our roadmap, but again, I think it really boils down to we do utilize dynamic pricing and cohort analysis, so a lot of that is one-to-one and one-to-many based." Is experimentation a big part of this, trying to learn about what works and what doesn’t? “Absolutely. Those decisions are made multiple times a day, actually. There are pricing models and variations that are constantly being iterated through." Is it fair to say that product ideas come from your colleagues who have more of a marketing background or marketing focus, rather than strictly ecommerce? “Somewhat. We work really, really closely with the pricing and revenue management team, who own the ancillary side of things from a product and pricing perspective. With that said, you’ve got to have that constant contact and collaboration between them when it comes to how you display, how and when you offer those things, and at what part of the ow. So there’s constant collaboration between those two teams." 47 EXAMPLES OF CRO SKILLS IN ACTION Here you can see an example of different digital optimization roles that show how easyJet is building their CRO program and embedding different CRO elements in various digital roles. 2023 Airline Digital Optimization Yearbook 48 EXAMPLES OF CRO SKILLS IN ACTION Ryanair, Volotea and airBaltic are examples of airlines merging ancillary revenue and merchandising roles with CRO elements (A/B testing, behavior analytics, targeting, data science).. 2023 Airline Digital Optimization Yearbook 49 III. Smarter Travel Marketing 2019 T IT L E O F D I G ITA L SURVEY USER AND UX RESEARCH Airline industry insights for a higher conversion Month 2019 | © Diggintravel Q: WHAT USER AND UX RESEARCH ACTIVITIES DO YOU CURRENTLY DO? • Level 1: Basic analytics and conversion reports; sales reports • Level 2: Level 1 + advanced analytics reports, session recordings, simple A/B testing, heat maps and click maps, ad-hoc customer surveys • Level 3: Level 2 + regular customer feedback and survey analysis, form analysis, occasional unmoderated or moderated user testing • Level 4: Level 3 + scheduled moderated and unmoderated user testing, customer struggle scores, prototype testing • Level 5: Level 4 + user testing at scale, biometric research, anomaly detection leveraging AI/ML 30% 25% 20% 15% 10% 5% 0% Level 1 Level 2 Level 3 Level 4 By Type By Size 40% 50% 32% 40% 24% 30% 16% 20% 8% 10% 0% Level 5 0% Level 1 Small Level 2 Level 3 Medium 2023 Airline Digital Optimization Yearbook Level 4 Level 5 Large Level 1 Level 2 Level 3 Level 4 Level 5 LCC FSC 51 KEY STAT: USER AND UX RESEARCH REMAINS ONE OF THE MOST NEGLECTED AREAS OF DIGITAL OPTIMIZATION We’re keeping the same title and key stat we used in our last yearbook, and it’s intentional. We’ll keep repeating this message until we manage to push user and UX research higher on airlines’ agendas. 50% of airlines from our survey still don’t do any user research activities besides looking at data (Level 1), or they do simple activities to understand their customers (Level 2). These activities provide only quantitative data, and no real qualitative insights to understand the context behind the numbers. Only 20% of airlines claimed they do systematic moderated and unmoderated user testing activities (Level 4), which are recognized among the most valuable UX research activities by many digital leaders. Test quantity and user and UX research were where airlines scored lowest on average across the eight categories from our digital optimization framework, so these two areas remain they key areas with room for improvement. Both are crucial for a successful CRO program. Traditional FSC airlines really struggle with a usercentric digital approach (this is what user and UX research is all about). Almost a third (32%) of FSC airlines said basic analytics and reports (Level 1) are their only methods of user and UX research, and 75% of small airlines don’t do any qualitative user and UX research. Currently, the majority of the airlines do either advanced analytics reports, session recordings, simple A/B testing, heat maps and click maps, and ad-hoc customer surveys (25% of airlines are at Level 2), or regular customer feedback and survey analysis, form analysis, and occasional unmoderated or moderated user testing (29% are at Level 3) in addition to that. However, when it comes to unmoderated and moderated user 2023 Airline Digital Optimization Yearbook testing, these are still mostly not part of the user research, or they are only done occasionally (although there are some positive changes, as you will see in the next section). Only 20% of airlines do regular, scheduled moderated and unmoderated user testing, which are probably the most important user and UX research activities. As in other areas, we see bigger airlines in particular re-investing in digital teams, which includes user research and specialized UX research roles and skills. You can see how British Airways is growing their research team and how research is collaborating with analytics and digital optimization in the “Examples” section. When we asked airline digital optimization professionals in which user research activity they see the most value, we saw some positive changes compared to our 2021-22 survey. There isn’t much change at the top: Digital analytics (76%), A/B testing (56%), and website and customer polls (51%) are still the most popular user and UX research activities. However, the positive change is that it seems more airlines are starting to recognize the importance of moderated user testing (a jump from 15% to 29%) and unmoderated user testing (an increase from 10% to 20%). Recognition of both areas doubled compared to our last survey. In general, there is a positive shift across all user research activities: airline digital optimization experts are relying less on quantitative (data) activities as their only insight into customer behavior, as we see more traction for qualitative user and UX research methods. 52 We also see increased adoption of digital experience analytics, which is a mix between quantitative and qualitative research. Digital experience analytics combines both analytics and UX research and can help airlines implement the metrics that track and measure relevant data about the customer journey, with the ultimate goal being to eliminate friction in the booking funnel, identify customer experience gaps, and increase conversion rates. You can nd an example of the Digital Customer Analyst role at easyJet with CRO elements and various digital experience analytics tools in the “Examples” section. What user research activities help you to understand your users the most? Please select the top 3 that bring you the most valuable insights: Digital Analytics A/B testing Website and customer polls Untitled 1 NPS surveys Untitled 2 Face-to-face user interviews Untitled 3 Click maps/scroll maps/mouse-hover maps Untitled 4 Moderated user testing Untitled 9 Unmoderated user testing Untitled Customer struggle scores Untitled 5 Eye tracking Untitled 6 Form analysis Untitled 7 0% 13% 26% 39% 2023 fi 2023 Airline Digital Optimization Yearbook 51% 64% 77% 90% 2022 53 KEY TRENDS: WHAT CHANGED COMPARED TO 2022 40% 32% 24% 16% It’s really important for airlines to go beyond data. When it comes to a culture of testing and experimentation, the really successful companies don't rely only on data and A/B testing. They also always use qualitative methods, and the user research and user voice have equal say along with the data. Watching real people use your product and go through your booking funnel can help you tell really powerful stories not only with data, but also by building empathy with the end user, by showing quotes or even short videos. This is what we encourage companies to do after user testing: to take the videos of the users, make a short video of the most powerful “aha!” moments, and share them with the key stakeholders to get support for your initiatives. 8% 0% Level 1 Level 2 Level 3 2023 Level 4 Level 5 2022 As in the prior two categories, we see a positive trend and move to the right in our maturity model in the UX and user research area. In our 2022 survey, we found that airlines had taken a step back, from Level 3 to Level 2 or Level 1. This was problematic, as it meant even more airlines were relying on data and analytics only to understand their users’ behavior. In our 2022-23 data, we’ve seen a shift from Levels 2 and 3 to Levels 3 and 4. The biggest increase happened in Level 4, which means more airlines are doing scheduled moderated and unmoderated user testing, combined with other activities like customer struggle scores and prototype testing. Large airlines have the most resources to do more UX research activities (33% of large airlines are at Level 4), but others can do them using agile methods and tools or by calling on external resources to ll the knowledge gaps. fi 2023 Airline Digital Optimization Yearbook In the “Ask the Expert” section, you can learn how airline digital giant Southwest is using user research methods like moderated and unmoderated user testing at scale (they ran almost 300 usability tests on thousands of people to get their feedback) to build great digital products. 54 ASK THE EXPERT: HOW AIRLINE DIGITAL LEADERS ARE DOING USER RESEARCH AT SCALE Mark Hursh Senior Director of Digital Customer Experience at Southwest Airlines We talk about how a data-driven, more modern approach to managing digital product is to measure, optimize, analyze, and do user research. You told me before that you’ve run a lot of usability tests and a lot of A/B tests over the last two years. Have you experienced at some point that you tested some of these ideas and they didn’t work? “I try to maximize and our team tries to maximize all of our available ways that we can solve problems. Think of it like we have top-down initiatives where we as a Southwest family need to all come together to support the greater good, but then we reserve capacity and hold it for product optimization at a feature level. We make sure we have enough that we can respond to the market and do ongoing prioritization. That’s not on an annual basis, but more quick to market so we can shift and dodge as appropriate. Then we even have a more detailed level of optimization that is down at a product level. We can do targeting and personalization, depending on the frontend’s capability set, at a very quick pace. We might be running tests when you’re going through Southwest.com or the app, and you’ll see a different journey experience if you have a certain product on your pro le or not. We try to adjust as appropriate. fi fl fl 2023 Airline Digital Optimization Yearbook Down at that lower level where we’re doing actual product optimization, we have teams that are coming up with hypotheses, looking at the clickstream data, looking at customer activity, looking at customer feedback, and saying, “Wouldn’t it be good if we go test this?” Even down to the nuance of the impact of a color. Color has really big impact, and if you use it in the right spots, it can have a big deal. We changed a component in one of our ows and we saw a 0.4% increase in the ow’s completion rate. Just by changing a – I mean, it was literally a 5x5 pixel area on the screen, and changing it from one hue to another. So those have huge impacts. We try to do that as much as we can, and then on the usability side, before we even get to that mode, we have a great usability practice that a team member on our team brought to us a few years ago. We’ve just kept building it up since then. But we can go out and run a test on a problem area either at the micro or at the macro level very quickly and go out to a sample of a really large billion-person-plus audience and ask them to try out our new experiences." You’re talking about unmoderated remote usability tests, like user testing. "Yeah, we’ve done both. We can do moderated and unmoderated user testing in those situations, but COVID actually forced us into that. We used to bring people onsite, do galvanic skin response, hook them up to systems, have a webcam that’s monitoring to see if they’re smirking." 55 ASK THE EXPERT: “I had no idea how many different forms faces could be and all the different things that show if you’re pensive or concerned or elated. Laura brought all that to the table. But since we’ve shifted to that more internetbased approach, accessing our larger audience – Laura gave me a rundown yesterday; I think last year we ran almost 300 usability tests on thousands of people to get their feedback. Which is so much fun because of our brand. We actually have a halo effect to the point where we have to take off our names and change the colors, because otherwise people see it and they’re like, “Oh, that’s Southwest! I like Southwest,” and you go, “Ugh, that just tainted the experiment. Now I’ve got to go adjust it.” [laughs] But we still love hearing it. It’s just a funny side effect. Can you share how large your user testing groups are? How many people work for you in those areas? "We’re scaling up right now. It’s a small but mighty team of a handful of folks. But the fun thing that we learned has been we’re a big company. There’s big company stuff that comes with that. We’ve learned, though, that there’s a lot of people at the company that like doing that. We’re working on evangelizing that even more. And our designers may not be user researchers from a classically trained perspective, but we nd that they love doing that in many cases. So we’ve worked to empower them. It might be a small handful of folks that have the actual title, but we have a lot of folks that play in that space, so we like to work with them." We call it “always be testing,” which is a lot of fun to get into that learning and analytical, hypothesis-driven approach." fi 2023 Airline Digital Optimization Yearbook 56 EXAMPLES OF USER AND UX RESEARCH IN ACTION Here is an example of how British Airway is investing in their internal UX Research team and how the Digital Product Researcher role works hand in hand with the Analytics, Optimization, and Customer Experience teams by providing quantitative and qualitative insights. 2023 Airline Digital Optimization Yearbook 57 EXAMPLES OF USER AND UX RESEARCH IN ACTION Here is an example of the Digital Customer Analyst role at easyJet with CRO elements and various digital experience analytics tools. 2023 Airline Digital Optimization Yearbook 58 IV. Smarter Travel Marketing 2019 T IT L E O F D I G ITA L SURVEY DIGITAL A N A LY T I C S Airline industry insights for a higher conversion Month 2019 | © Diggintravel Q: WHAT KIND OF DIGITAL & CRO ANALYTICS DO YOU DO? • Level 1: Basic web analytics (e.g. standard Google Analytics reports) • Level 2: Level 1 + advanced web analytics setup (e.g. enhanced ecommerce for GA, custom goals, events, metrics and simple funnel reports) • Level 3: Level 2 + detailed funnel analytics, attribution modeling, cross-device tracking • Level 4: Level 3 + advanced tools for visualization (like Google Data Studio & BigQuery, Tableau, Qlik, Power BI) • Level 5: Level 4 + data science (predictive analytics, machine learning with e.g. R or Pyhton), anomaly detection leveraging AI/ML 40% 33% 27% 20% 13% 7% 0% Level 1 Level 2 Level 3 Level 4 By Size By Type 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% Level 1 Small Level 5 Level 2 Level 3 Medium 2023 Airline Digital Optimization Yearbook Level 4 Level 5 Large 0% Level 1 Level 2 Level 3 Level 4 Level 5 LCC FSC 60 fi KEY STAT: DIGITAL ANALYTICS REMAINS ONE OF THE MORE MATURE DIGITAL OPTIMIZATION AREAS When it comes to digital analytics, there weren’t big changes (see more details in the next section), and this is good news for airlines. Digital analytics remained among the most developed digital optimization areas, as 62% of airlines from our survey claimed they do detailed digital analytics in their primary web analytics tool (Level 3) or, even more, that they use advanced visualization tools and reports in addition to their main web analytics platforms (Level 4 or Level 5). The largest group (35%) of airlines claimed to be at Level 4, which means they are doing advanced digital analytics in their primary digital analytics platform and they are using BI or other platforms for aggregation and exploration. 50% of LCC airlines are at advanced maturity of digital analytics (Level 4 or 5), compared to only 30% for FSC. On the other end of the spectrum, there are still 13% of airlines that rely on basic web analytics reports (Level 1). 25% of airlines have Enhanced Ecommerce tracking features enabled in their analytics setup (Level 2), but they still don’t do detailed tracking of their booking funnel. This share jumps to 43% for traditional, full-scheduled airlines. Detailed funnel tracking or attribution modeling are two key activities to understand how your digital campaigns and booking funnel are performing. Exact and detailed measuring should be the starting point for all of your digital optimization and CRO activities. It’s also an activity that doesn’t require a big additional investment, as it can be done in most of the existing digital analytics platforms. Google Analytics is still the most popular digital analytics platform among the surveyed airlines; 56% of airlines said they use Google Analytics, and another 33% claimed to use its enterprise version – Google Analytics 360. Adobe Analytics is the other platform used by airlines for digital analytics (15% of airlines in our survey). Google’s solution for mobile analytics, Firebase, is the most popular solution for mobile and app digital analytics. There were also several airlines in our survey that claimed they are in the process of migrating to GA4 (Google Analytics 4). You can nd two different airline digital analytics roles based on different digital marketing stacks (one for Google, one for Adobe) in our “Examples” section. What is your primary web analytics platform (e.g. Google Analytics, GA360, Adobe Analytics / Omniture, Firebase, Monetate ....)? Google Analytics GA360 Firebase Untitled 1 Adobe Analytics Untitled 2 Other Untitled 3 0% 9% 17% 26% 2023 2023 Airline Digital Optimization Yearbook 34% 43% 51% 60% 2022 61 KEY TRENDS: WHAT CHANGED COMPARED TO 2022 40% science role with A/B testing elements in our “Examples” section. You can learn more about how to leverage data and marketing tools to build audiences and provide personalized experiences in the “Ask the Expert” interview in Section VI – Tools. 32% 24% 16% 8% 0% Level 1 Level 2 Level 3 2023 Level 4 Level 5 The other challenge when it comes to using data and leveraging analytics is that sometimes there can be too much data and metrics. Digital departments and teams use different tools and can track and analyze data in different tools. This siloed approach when it comes to data and metrics can result in different teams optimizing different parts of the customer journey, or different parts of the digital product, and using different metrics, instead of having uni ed goals. 2022 As we mentioned at the beginning of this section, we didn’t see signi cant change when it comes to airline digital analytics maturity. The level of maturity and the usage of digital analytics platforms are almost at the same levels as in our 2022 survey. In the “Ask the Expert” section, you can read about two traps to avoid when it comes to digital product metrics, and why it is important to nd a balance between business and product metrics. The number of airlines at Level 4 increased slightly (35% vs. 33% in our last survey), but only one airline (2%) stated that they’re leveraging data science (Level 5) when it comes to digital optimization and CRO. With democratization of data science, advanced techniques like predicting conversion probability, anomaly detection, churn prediction, recommendation engines, and building various segments and clusters based on your digital analytics data are becoming more accessible. There is an untapped opportunity, the next level for airlines to reach when it comes to using digital analytics data: going from reactive to proactive analytics when it comes to digital optimization of their digital products. Combining CRO elements (experimentation, user research) with marketing data science could be the ultimate step towards smart, data-driven digital marketing. You can nd an example of a marketing data 62 fi fi fi fi 2023 Airline Digital Optimization Yearbook ASK THE EXPERT: TWO TRAPS TO AVOID WITH DIGITAL PRODUCT METRICS Mariana Fonseca Medina VP of Digital, Loyalty and Marketing at Virgin Voyages, prior Managing Director – Digital Customer Experience at American Airlines What would you say is most important when you’re setting up a metric system (KPIs) or an OKR system or any measurement system for digital teams and digital products? "I would say you have to measure what you can in uence. This is where sometimes, digital OKRs and business level objectives are not 100% aligned. I think every CEO would like to say, “I have a revenue goal of doubling bookings, and I need your OKR to be doubling bookings.” Well, the people responsible for the checkout page cannot in uence doubling bookings. They can in uence doubling the throughput of people paying on that page or reducing the number of errors on that page. So it’s nding that sweet spot and creating objectives and key results of things that you can in uence that correlate or tie into the broader business objectives, but not falling in the trap of two things. One is adopting those business objectives as your digital OKRs, because you’re never going to be able to measure success. If I commit to doubling bookings, then all I can do is, I don’t know, change the forms, improve the UX, remove some error rates. I’m not going to be able to accomplish my The other thing that you should avoid is the opposite: having objectives and key results of things you can measure, but that actually don’t contribute at all to the revenue targets, or to whatever the overall corporate targets are. If I have a goal of decreasing time on task, but time on task doesn’t necessarily mean more revenue, better conversion, or higher attachment, then I am not contributing to that corporate goal. That for me is the biggest learning. It’s tough because purist digital product managers want that metric that they can tackle, and they may not be seeing the corporate goals. And then business leaders who are not digital native only want the business goal, but they don’t understand that the digital product teams can only in uence so much. It’s nding that negotiation and balance between the two." t be measurable in the short term (the duration of an experiment) yet believed to causally drive long-term strategic objectives […] The hard part is nding metrics measurable in a short period, sensitive enough to show differences, and that are predictive of long-term goals. For example, ‘Pro t’ is not a good OEC, as short-term theatrics (e.g., raising prices) can increase short-term pro t, but may hurt it in the long run. Customer lifetime value is a strategically powerful OEC. 63 fl fl fi fi fi fi fl fl fl fi 2023 Airline Digital Optimization Yearbook goal. A goal that cannot be accomplished should not really be a goal. EXAMPLES OF DIGITAL ANALYTICS ROLES IN ACTION Here you can see two examples of airline digital analytics roles on two different analytics platforms: one from LOT Airlines on Adobe Analytics and a digital marketing tech stack (Adobe Analytics, Adobe Target, Adobe Campaign), and a CRO & Data Analyst role for Corendon Airlines on Google digital marketing platforms (Google Analytics, Google Tag Manager, Google Optimize). 2023 Airline Digital Optimization Yearbook 64 EXAMPLES OF MARKETING DATA SCIENCE ROLE Here you can see an example of a marketing data science role with CRO elements like A/B testing. 2023 Airline Digital Optimization Yearbook 65 V. Smarter Travel Marketing 2019 T IT L E O F D I G ITA L SURVEY TEST QUANTITY Airline industry insights for a higher conversion Month 2019 | © Diggintravel Q: HOW MANY TESTS AND EXPERIMENTS DO YOU DO? • • • • • Level 1: None or minimal: 1-2 tests per quarter Level 2: Ad-hoc testing or project based: 1-2 tests per month Level 3: Regular and planned testing: 2-5 tests per month Level 4: Interactive testing: 5-10 tests per month Level 5: Disciplined testing: 10+ tests per month 40% 33% 27% 20% 13% 7% 0% Level 1 Level 2 Level 3 Level 4 By Size By Type 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% Level 1 Small Level 5 Level 2 Level 3 Medium 2023 Airline Digital Optimization Yearbook Level 4 Level 5 Large 0% Level 1 Level 2 Level 3 Level 4 Level 5 LCC FSC 67 KEY STAT: TESTING AND EXPERIMENTATION ARE FINALLY GAINING TRACTION, ESPECIALLY WITH LOWCOST AIRLINES Testing and experimentation volume still remains one of the biggest pain points and the lowest ranked digital optimization area, but we’re nally seeing some positive progress. 56% of airlines don’t test (20% are at Level 1) or do it only on an ad-hoc basis (36% are at Level 2). Testing quantity is especially problematic for traditional (FSC) airlines, as 27% don’t test or do minimal testing (Level 1) or rarely run experiments (32% of FSC airlines are at Level 2). The positive news is that 44% of the airlines in our survey are doing regular and planned testing (Level 3 or above). Low-cost carriers are at the forefront here; 50% claimed they do experimentation at a respectable scale of 5-10 tests per month (Level 4). Testing quantity is really where digital optimization leaders distinguish themselves from the rest, and low-cost airlines made big strides in this area during the last year. Most low-cost airlines increased their experimentation velocity to 5-10 tests per month. Per one of our Yearbook contributors, velocity and quality are two of the biggest levers in experimentation, and you should be constantly exploring your limits of both. As you start running more experiments and increase test quantity, you learn and optimize your testing process, which enables you to run more complex tests – and run them more e ciently. Another Yearbook contributor and past podcast guest Mark Hush from Southwest Airlines disclosed that their digital team ran more than 130 A/B tests and more than 240 usability tests in the span of one year. In our “Examples” section, you’ll see that another low-cost airline powerhouse, easyJet, is The key for airlines is to leverage experimentation to de-risk ideas and reduce the risk of running into identifying product issues late in the development process. As you can see from the Forrester 1:10:100 rule, the cost of identifying problems increases exponentially over time. 68 fi fi ffi fl 2023 Airline Digital Optimization Yearbook running up to 10 tests a month within their CRO program. Another shift we’re seeing is that many airlines are starting to move CRO and experimentation beyond the domain of specialists and into the hands of product owners. While democratizing experimentation can increase velocity, airlines are facing new challenges, as most people are new to testing. Orchestration, education, and guidelines for teams from different channels running experiments is crucial in this process. Over the past year, during our research we’ve seen examples of airlines working on an internal CRO and experimentation centralized support function to educate digital product owners and provide guidelines on how to embed experimentation in their digital product work ow. You can nd an example of this type of centralized role at Qatar Airways in our “Examples” section. Experimentation and testing can be utilized both as risk mitigation as well as exploration. You can get ideas for new products or features from past experiments, and 36% of airlines claim to do so. As you can see from our data, airlines get the most ideas from web analytics, but data is not enough. The key to high-quality, high-impact A/B tests and experiments is doing conversion research leveraging both data and user and UX research. Where do test and experiment ideas come from at your organization? Please select Top 3! Web analytics Customer journey analysis and customer struggle Ideas from the executive team Untitled 1 Insights from previous experiments Untitled 2 Customer data (CRM, personas, user surveys) Untitled 3 Competitive analysis Untitled 4 Online resources about other experiments or web design & UX best practices Untitled 9 Gut feeling Untitled Heat maps, click maps, session recordings, eye tracking Untitled 5 Usability labs Untitled 6 0% 10% 20% 30% 40% 50% 60% 70% 2023 fi 2023 Airline Digital Optimization Yearbook fi fi See our “Ask the Expert” section for insights from two CRO experts on how the eld has changed over the last ve years and how companies are nally embracing the concept of iterating on a product quickly by identifying the key issues early in the process and based on customer feedback. 69 KEY TRENDS: WHAT CHANGED COMPARED TO 2022 50% 40% 30% 20% 10% 0% Level 1 Level 2 Level 3 2023 Level 4 Level 5 2022 If we compare our 2023 results to results from our 2022 survey, we can see that the biggest shift happened from Level 2 (1-2 tests per month) to Level 3 (2-5 tests per month). This is a welcome sight, and it probably means that most airlines that had to scale down their experimentation volume because of the pandemic are now reinvesting in digital products and running more experiments. The shift from ad-hoc, project-based testing to regular testing is the crucial step airlines need to take towards data-driven digital marketing. But while we see new airlines making this progress, more than half still don’t do regular testing and experimentation. Lack of resources remained the main reason airlines gave as to why they’re not running more experiments. What prevents you from running more A/B tests and experiments? Lack of resources & budget Platforms complexity & limitations Other priorities & time constraints (a lot of other initiatives) Untitled 1 Lack of skills & knowledge Untitled 2 Lack of testing tools Untitled 3 Organization Untitled 4 Lack of experimentation culture 2022 Airline Digital Optimization Yearbook Untitled 6 0% 6% 11% 2023 Airline Digital Optimization Yearbook 17% 23% 29% 34% 40% 70 We’ve seen that as CRO programs mature, airlines want to increase the number of tests and run more complex experiments. This is where core digital platform limitations can impact the quantity and complexity of your tests. In exible digital platforms and booking engines that don’t support experimentation have been a common theme in our CRO surveys over the last ve years. requirement list when airlines are implementing new or upgrading existing digital platforms. As you will see in our next two sections, you cannot run a competent CRO program without proper testing tools. This year, almost two-thirds of airlines claimed that they will invest in their core digital platforms in the next 12 months, yet only a third will invest in A/B testing capabilities (see Section VIII for more data). This makes us believe that A/B testing capabilities are still not at the top of the It all started with a simple and engaging mobile app What if engaging Mobile Apps came off-the-shelf to be smoothly integrated with your digital commerce platform, just requiring easy activation? Visit branchspace.com to learn more fi fl 2023 Airline Digital Optimization Yearbook 71 ASK THE EXPERT: HOW HAVE CRO AND EXPERIMENTATION CHANGED OVER THE LAST FIVE YEARS? NOTE: During our research for our 2023 Airline Digital Optimization Yearbook, we reached out to several thought leaders in experimentation and CRO and asked them how they see the evolution of this eld. Here are some of their answers. Rich Page Conversion Optimization Expert with more than 15 years of experience Lorenzo Carreri CRO, User Research and Experimentation Consultant "The top two changes I’ve seen happening are: One, collecting and acting on qualitative feedback. Eric Ries released the book Lean Startup in 2011. One of the many messages in the book was to iterate on a product quickly based on customer feedback. 13 years later there are still tons of companies that don’t follow the advice of this book. But things have gotten much better. Five years ago my jaw would have dropped if a client shared any customer research work they had previously done before hiring us. Today it’s not a rarity anymore. Which is a great advancement for the industry. "Over the last ve years, CRO has now become much more about the quality of A/B tests than the quantity, and doing conversion research to power higher impact ideas. Understanding your user's needs, issues, doubts, and hesitations through user testing and surveys has become a particularly important part of this conversion research, instead of relying on analytics insights or best guess." Two, the need for one source of truth. Five years ago the idea of having pre-purchase and postpurchase data together in one place was pretty rare (unless you were a very large business). In the past few years, I’ve seen more mid-size (and small too) businesses invest in having one source of truth (data warehouse) for the entire customer journey. This allows them to understand their acquisition and retention better, and also make more con dent decisions when evaluating the results of an experiment." 72 fi fi fi 2023 Airline Digital Optimization Yearbook EXAMPLE OF CRO AT SCALE Here is an example of a Front-End Developer role at easyJet, leading the CRO program by launching up to 10 tests per month of different scopes (small, medium, large). 2023 Airline Digital Optimization Yearbook 73 EXAMPLE OF CRO ROLE SUPPORTING DIGITAL PRODUCT MANAGERS Here is an example of a Web Optimization Specialist role at Qatar Airways; this role, together with the Testing and Optimization O cer role, provides guidelines and support for digital product owners to run tests. ffi 2023 Airline Digital Optimization Yearbook 74 Smarter Travel Marketing VI. 2019 T IT L E O F D I G ITA L SURVEY TOOLS Airline industry insights for a higher conversion Month 2019 | © Diggintravel Q: WHAT TOOLS DO YOU USE FOR YOUR DIGITAL OPTIMIZATION ACTIVITIES? • Level 1: Basic web analytics platform, performance monitoring • Level 2: Level 1 + advanced web analytics; simple A/B testing tools (client-side); simple user research tools • Level 3: Level 2 + advanced customer research tools; customer experience analytics tools; simple personalization tooling • Level 4: Level 3 + advanced A/B testing tools (server-side) or own testing platform; project management tool for optimization • Level 5: Level 4 + own testing platform embedded in the core digital platform; advanced personalization tools; predictive analytics & optimization tools 30% 25% 20% 15% 10% 5% 0% Level 1 Level 2 Level 3 Level 4 By Size By Type 60% 40% 48% 32% 36% 24% 24% 16% 12% 8% 0% Level 1 Small Level 5 Level 2 Level 3 Medium 2023 Airline Conversion Optimization Survey Level 4 Level 5 Large 0% Level 1 Level 2 Level 3 Level 4 Level 5 LCC FSC 76 KEY STAT: COMPLEX OPTIMIZATION TOOLS ARE MOSTLY THE DOMAIN OF LARGE AIRLINES 24% of the airlines in our survey claimed they don’t use a tool for testing (Level 1) and that they rely on a basic web analytics platform for their digital optimization activities. Another 27% claimed that they use simple A/B testing and user research tools (Level 2). Most of the small airlines don’t use digital optimization tools, as more than half (58%) claim they only use a basic analytics platform. 54% of traditional full-scheduled airlines are at Level 1 or Level 2. On the other end of the spectrum are 18% of airlines that use advanced server-side A/B testing tools or their own testing platforms (Level 4). 39% of LCC airlines use advanced tools (Level 4) compared to 22% of FSC airlines, another sign that low-cost airlines are more mature when it comes to digital optimization. Large airlines have more resources and more complex technology stacks, and 72% of large airlines are using advanced digital optimization tools (Level 3 or Level 4). Digital analytics and looking at past data is not enough if you want to do systematic optimization. Some airlines in our survey said they track monthon-month conversion rate improvements on a granular level, and if the improvement is signi cant, they attribute it to the change they’ve made. However, there are many factors that can make those assumptions wrong, from seasonality and audiences to pricing and availability. If you want to really measure the impact of your digital product changes, you need to run experiments and tests. You need to do systematic user research and testing as well, and implementing at least simple A/B testing, digital experience analytics, and simple user research tools should be the next step for all airlines that don’t use such tools at the moment. The following chart is a representation of the most popular options among airlines when it comes to A/B testing platforms. Do you use A/B testing tools (Google Optimize, Adobe Tests, Optimizely, Oracle Maxymiser, VWO...) or do you have your own testing platform? Google Optimize Adobe We don't use a testing tool Untitled 1 Own testing platform Untitled 2 Others Untitled 3 Optimizely Untitled 4 Oracle Maxymiser Untitled 5 2022 Airline Digital Optimization Yearbook 0% 6% 11% 17% 2023 fi 2023 Airline Digital Optimization Yearbook 23% 29% 34% 40% 2022 77 Most airlines are using third-party vendors’ A/B testing tools. Google Optimize is still the most popular testing tool among the airlines, followed by Adobe testing tools. Oracle and Optimizely were other tools that got several votes in our survey. Google has announced (you can nd the link in the “Resources” section) that Google Optimize and Optimize 360 will no longer be available after September 30, 2023, so this is something airlines need to consider. Google suggested that they are investing in A/B testing in Google Analytics 4. The share of airlines that said they have their own testing platforms (or that they use a combination of their own and a third-party platform) remained the same at 16%. Airlines that have built their own testing platforms can be more agile with their experimentation initiatives. The share of airlines that claimed they don’t use an A/B testing tool dropped a bit to 20%. When planning on building a digital optimization and experimentation program, a testing platform is one of the key elements you need to consider. Do you use a vendor (third party) or do you build your own testing capabilities? Do you consolidate all digital optimization tools (analytics, digital experience analytics, testing) under one vendor or do you use many different ones? Here you can see a grouping of various third-party tools posted on LinkedIn by our Yearbook contributor and experimentation expert Ben Labay. Ben grouped the tools based on their experience with working with them at Speero and based on how these tools collect and assign data, what metrics they can handle, and what types of analysis they can do. Server-side tools or in-house testing platforms allow more complex metrics (like margin, average booking value, and ancillary revenue) but are more complex to build, implement, and manage. You can nd an example of an A/B testing tool and other CRO tools used by easyJet in our “Examples” section. There is also a link to a CXL article with a list of alternative A/B testing tools for Google Optimize in our “Resources” section. Source: Ben Labay, Speero fi fi 2023 Airline Digital Optimization Yearbook 78 KEY TRENDS: WHAT CHANGED COMPARED TO 2022 in large airline organizations, of insourcing these skills into their digital teams. Some airlines that started their testing initiatives with simple A/B testing and digital optimization tools made the next step by starting to use more advanced A/B testing tools during the past 12 months. 30% 24% 18% 12% 6% 0% Level 1 Level 2 Level 3 2023 Level 4 Level 5 2022 As in other areas, we’re seeing a trend when it comes to digital optimization tools. We see more advanced airlines moving from Level 3 to Level 4, meaning more airlines are using advanced testing tools or are working on developing their own testing platforms. The trend is logical if interpreted in the context of others: with the industry recovering after the pandemic and airlines investing back into their digital teams and skills, there is a need for more complex digital optimization tools. More complex tools require more specialized skillsets and knowledge, and therefore we see a trend, especially Do you combine digital optimization and personalization activities (within the same team)? The other trend we’re watching in our yearly surveys is whether airlines use personalization tools and if they combine CRO and personalization activities within the same team. We’ve shared a lot of resources and expert takes in our past Yearbooks on why it makes sense to combine personalization, digital optimization, and experimentation. We see that airlines are recognizing this as well; 75% of airlines in the survey claimed to combine digital optimization (CRO) and personalization activities within the same team. This is a 6% increase compared to our 2022 survey. To say that data and personalization have been popular topics in the airline industry over the last couple of years is an understatement. Our survey con rms that personalization is at the top of airline agendas, as 52% of the airlines in our survey said they use a personalization engine. Do you use a personalization engine? No No Yes Yes 0% 11% 23% 34% 46% fi 2023 Airline Digital Optimization Yearbook 57% 69% 80% 0% 7% 15% 22% 30% 37% 45% 52% 79 This is a signi cant increase from 39% in 2022. In addition, 60% of airlines listed personalization and customer data (CRM, CDP, personalization engines) as one of the focus areas of their digital team in the next 12 months (see Section VIII for more detailed results). Successfully integrating data, data platforms, personalization engines, and your marketing and experimentation initiatives is de nitely challenging. Running experiments based on conversion research is the best way to understand the impact and calculate the ROI of personalization initiatives. You can learn more about how to connect the dots with data, digital marketing platforms, personalization, and testing in our “Ask the Expert” section. fi fi 2023 Airline Digital Optimization Yearbook 80 ASK THE EXPERT: HOW HAVE CRO AND EXPERIMENTATION CHANGED OVER THE LAST FIVE YEARS? NOTE: During our research for our 2023 Airline Digital Optimization Yearbook, we reached out to several thought leaders in experimentation and CRO and asked them how they see the evolution of this eld. Here are some of their answers. Ben Labay CRO & Growth Expert and CEO at Speero "There are a couple primary ways that CRO is evolving. One is quite tactical, and centers on data security and privacy and site performance standards. This area has CRO tackle attribution, personalization, and data quite differently than before. We're more prone to build and leverage CDPs and data warehouses for our work, we're more prone to focus on session-based behavioral monitoring and changes, etc. The second is more strategic and programmatic. It has CRO evolving into business operations more and more. It has the CRO way of thinking, that failure is a feature and not a bug, operationalizing into orgs more and more. Centers of excellence, ambassadors, specialists in change management related to experimentation combined with Agile thinking and processes. CRO is borrowing from the dev ops movement here in many ways." fi 2023 Airline Digital Optimization Yearbook 81 HOW TO CONNECT THE DOTS WITH DATA, PERSONALIZATION, AND TESTING Matt Ravlich Digital expert and former Digital Analytics and Optimization Manager at WestJet Airlines You said optimization is a combination of experimentation and creating personalized customer experiences. In your mind, what kind of tools do you need to run a proper optimization program? “I think it’s having a good understanding of the data you have, and then a big thing is combining that data with your other sources. In my previous experience, there’s been siloed data in different areas. I feel for a lot of the analysts sometimes because I know that there’s a lot of stitching they have to do, but then there’s also a lot of data wrangling that has to go on around, “Where do I get the data for this?” You have to go to different teams, gure out where everything is. When I think about airlines, there’s loyalty data, there’s the digital data, there’s data coming in from ights, there’s revenue management information. One thing that we started doing is our teams realigned and we started working heavily with our revenue management data teams. We would actually send them a daily data feed of our digital data so they could start combining it into ight search data to help them start to look at those patterns and see where they could decipher what people’s interests were and how they could better work that into their pricing or offer discounts, things like that. One of the things I think really helps is if you do have a centralized data repository. I don’t like to say that because I know it’s di cult. It’s not an easy thing to do.” By centralized data deposit, you mean like a CDP platform? "Yeah, or I like to say data lake, but yeah, CDP is key. From my experience working with Adobe products, I’ve seen people start to use the AEP product to centralize their data. There’s a schema where APIs are used to get streaming data to be pumped into the centralized data resource in AEP, and then they can take advantage of what’s called the Real-Time CDP in Adobe where basically the pro les get built. You can actually get a real-time pro le of your customers, and you start to see what events are happening on your site, but also what’s happening in other areas. Like, are they a loyalty member? Are they not? Can we convert them to a loyalty member?" And then you build personalization scenarios on top of those. "Exactly. So there’s the promise of 1:1 personalization, which I think is eventually – it’s tough. I think it’s a tough go, and to be honest, I haven’t seen 1:1 really working anywhere that I’ve been at fully. But what I do see working very well is the segmentations that can happen through that type of data.Within RT CDP, people start to quality for certain segments. For example, say somebody’s an anonymous user that comes to your site; they do some actions, but then they ll out a form and add their email. fi 82 fl ffi fi fi 2023 Airline Digital Optimization Yearbook fi fl ASK THE EXPERT: That starts to build their pro le. Then maybe that email is already in your loyalty system. Then you can stitch that data together and start to see their larger picture, and maybe they start to qualify for a loyalty tier, they’re a Bronze member, they’ve own to a certain place using points – things like that that they can start to qualify for. Or maybe they’ve searched for a trip to the Bahamas; now you can start to show them certain advertising for Bahama ights. That information can be used onsite and offsite through this RT CDP using destination, such as Facebook, Google 360, things like that." You were talking about data management platforms, decision management software, optimization tools. Would you say these are the blocks (next to digital analytics, of course) – your core analytics platform that helps you not only run but also automate the optimization and personalization process? “Yeah. I think that’s where we’re going. A future state is that I think most airlines or most companies, just knowing that a lot of people are using Adobe Experience Cloud, are probably going to make the move to Adobe Experience Platform at some point if they haven’t already, because they can align their web data to be available, and then also connect it through to Adobe Target. Those pro les that I was talking about earlier tie into Adobe Target and allow for more personalization, and more testing as well. You can do a lot of testing with your segments. tracking certain things?” Say loyalty member logins; that’s something I’ve talked a lot about. Anonymous users, what people search for, the tra c to your booking site, things like that. Understanding the key KPIs is going to help you and your program grow because I think once you understand that and you’re tracking the right things, you’re getting the right data, and then your strategy will align and only help improve everything. I’ve been mentioning the Experience Platform a lot, and people are moving in that direction with CDP. But also, I think a good thing to note is taking inventory of what you have today. Take a step back and say, “Yes, we should probably start to look at these new tools, but what can we do with what we have today?” If you’re using Adobe Analytics, if you’re using Google Analytics, what data are you getting out of that? Are you able to create audiences that you can start to look at and break down and use for your marketing data? Can you leverage Audience Manager in a way today that helps you with your offsite advertising and digital marketing? Can you also personalize things based on the data you’re receiving today? We always look to what the latest and greatest is, but also, I think we should look at, “What do we have today and are we using it in the right way? Can we do better with what we have?” But I think it all comes down to, is your strategy aligned with the business goals? You can have a great marketing stack and tools, the best in the world, but if you’re not aligned to your business goals, then I don’t think your program is going to work out as well. So understanding what you’re tracking on your website and why, like “Why are we 83 fl fi fi 2023 Airline Digital Optimization Yearbook ffi fl ASK THE EXPERT: EXAMPLES OF CRO TOOLS IN ACTION Here is an example CRO Manager role at easyJet with CRO elements and A/B testing (Google Optimize) and other user tracking tools. And here’s a similar example of a CRO role at Wizz Air with key stakeholders and main tools. 2023 Airline Digital Optimization Yearbook 84 VII. Smarter Travel Marketing 2019 T IT L E O F D I G ITA L SURVEY INTERNET BOOKING ENGINE (IBE) Airline industry insights for a higher conversion Month 2019 | © Diggintravel Q: HOW FLEXIBLE IS YOUR INTERNET BOOKING ENGINE (IBE) FOR A/B TESTING AND OTHER EXPERIMENTS? • Level 1: Our IBE doesn't support A/B testing and experiments • Level 2: Simple A/B testing and experiments are possible but with workarounds and take a long time & effort to implement • Level 3: We can do basic and semi-complex experiments and A/B tests on an ongoing basis • Level 4: We can do split-path A/B testing, have & test several versions of booking ow at the same time • Level 5: We completely own and manage booking ow and have no limitations with A/B testing and experiments 40% 33% 27% 20% 13% 7% 0% Level 1 Level 2 Level 3 Level 4 By Size By Type 60% 40% 48% 32% 36% 24% 24% 16% 12% 8% 0% Level 1 Small Level 5 Level 2 Level 3 Medium Level 4 Level 5 Large 0% Level 1 Level 2 Level 3 Level 4 Level 5 LCC 2023 Airline Conversion Optimization Survey FSC fl fl 86 KEY STAT: BOOKING ENGINE FLEXIBILITY REMAINS A BIG PAIN POINT FOR TRADITIONAL AIRLINES 58% of the airlines in our survey claimed they have internet booking engine (IBE) solutions that are not exible for A/B testing (Level 1 or Level 2). 35% from this group said their IBE solutions allow them to run A/B tests, but it takes a lot of time and effort to do it (Level 2), and 24% said their IBE solution doesn’t support A/B testing at all (Level 1). On the other end of the spectrum, only 14% of airline optimization professionals in our survey are satis ed with the testing capabilities of their IBE platforms (Level 4 or Level 5). Even if their booking engines are not exible, airlines can still run experiments on other platforms (e.g., email campaigns, advertising campaigns, copywriting, landing pages, etc.). These are good places to start with simple tests and to get your rst learnings. However, in the long run, more complex experiments, so-called big bets, are the ones that provide true value and signi cant results. In a recent thought-provoking article from Reforge, the authors claimed that the tests marketers are most comfortable with are simple to run, most likely to “succeed,” but don’t actually create much informational value. They’re designed to generate small wins that will move you up to “local optimum” within the framework of what you’re already doing, and nothing more (a small improvement but not a step-change winner). Big bets (more complex tests in the airline world) could be changing your customer acquisition strategy, changing your product bundling and ancillary strategy, or rolling out a different or several booking funnels. These changes are not possible without exible booking products. As in prior years, internet booking engine exibility is an area where airlines struggle the most overall and where the gap between low-cost airlines (LCC) and traditional, full-scheduled carriers (FSC) is most notable, especially at the bottom. 65% of FSC airlines in our survey claimed to have an internet booking engine that makes testing and experimentation within their booking ow either impossible or it takes a long time and effort to implement it. Small airlines are in a tough spot when it comes to internet booking engines; most rely on third-party legacy IBE products that don’t allow much control and exibility (83% of small airlines are at Level 1 or Level 2). Do you have a custom built IBE or do you use an IBE product-solution? Most popular IBE product solutions Amadeus IBE product solution Navitaire In-house or custom built solution Sabre Untitled 1 Mix (IBE product solution + custom development) Others or not speci ed Untitled 1 Untitled 2 0% 9% 17% 26% 34% 43% 60% 0% 7% 14% 21% 29% 36% 43% 50% 87 fl fl fl fl fi fl fi fi fi fl 2023 Airline Digital Optimization Yearbook 51% Only 14% of airlines in our survey said they can run more complex tests like split-path A/B testing, test several versions of booking ow at the same time (Level 4), or even completely own and manage booking ow and have no limitations with A/B testing and experiments (Level 5). However, all but one of the eight Leaders in our survey claimed to have booking engines that allow them to run complex experiments. To be good at CRO, you need to have a exible booking engine. Even great A/B testing or other customer experience tools won’t help much if your IBE doesn’t allow experiments on your main digital product. Because of the complex distribution and IT landscape (and legacy solutions), FSC airlines’ internet booking engines are much less exible than the ones LCC airlines are using. 74% of FSC airlines in our survey disclosed that they use a third-party IBE solution. The vast majority of third-party IBE products come from traditional big vendors like Amadeus and Sabre (see survey results for most popular IBE product solutions). These product solutions were often built as an extension of the legacy PSS platforms, and as such are not the best t for modern digital optimization and A/B testing. Most airlines that use IBE product solutions claim that complex tests are either not possible or are time- and cost-consuming due to IBE constraints. On the other hand, 55% of LCC airlines claimed they developed their own booking engines (most have a custom-built IBE that is based on APIs from the back-end and have full exibility with the front-end), so they have much more exibility with customization and running tests. Navitaire is the most popular IBE platform among LCC airlines; however, most LCC airlines use it only as a base and have custom development on top. engine, or even building a custom booking engine with A/B testing functionalities, is the other part. Build or buy is always a di cult decision, and the answer depends on resources, organization and priorities. The good news is that in recent years, new modern airline digital platform solutions have emerged that have A/B testing and personalization functionalities already embedded. Using such solutions, even small airlines or airlines that don’t want to develop solutions in-house can run tests and do personalization within their booking ows. You can nd an interview on the topic of building agile airline digital platforms with A/B testing functionalities in our “Ask the Expert” section. In the prior section (Section VI – Tools), you saw why testing tools are the rst step and a very important part of your digital optimization tech setup. Integrating these tools with your booking fl fl fl ffi fl fl fi fl fi fi fl 2023 Airline Digital Optimization Yearbook 88 KEY TRENDS: WHAT CHANGED COMPARED TO 2023 Almost all airlines (98%) do at least some kind of CRO activities on their website. However, many airlines still lack the resources or knowledge to do digital optimization activities on their mobile app. Only 46% of airline digital professionals in our survey answered that they do digital optimization activities on their airline app. While it is still rare, there are some innovative airlines that are expanding CRO and experimentation best practices to other channels. 40% 32% 24% You can learn about what Southwest Airlines’ digital team learned about running experiments on their In ight Portal in our “Ask the Expert” section. 16% 8% 0% Level 1 Level 2 Level 3 2023 Level 4 Level 5 2022 Which of the following platforms do you optimize (user research, optimization, A/B tests)? If we compare the 2023 results to our previous survey, we can see there is a status quo when it comes to internet booking engine exibility. A similar share of airlines claims to have a booking engine that is not exible for A/B testing (Level 1 or Level 2): 58% in this year’s survey, compared to 54% in 2022. 27% of airlines said they can do basic and semicomplex experiments and A/B tests on an ongoing basis (Level 3), which is an 8% increase compared to our previous survey. This is good news, as it means more airlines can do experimentation on their core digital products. However, we see a slight regression when it comes to running complex A/B tests within booking ows: 14% of airlines are at Level 4 or Level 5, compared to 27% the year before. As mentioned in the prior section, large airlines represent the vast majority of airlines with exible booking engine platforms. When it comes to digital touchpoints where airlines do CRO and digital optimization, main airline websites are still the predominant channel. Mobile websites (mobile or responsive airline.com Mobile apps Untitled 1 Web check in, kiosks Untitled 2 Other Untitled 3 0% 14% 29% 43% 57% 71% 86% 100% 89 fl fl fl fl fl 2023 Airline Digital Optimization Yearbook Desktop website (main ailrine.com website) ASK THE EXPERT: WHERE AND HOW TO START WHEN IT COMES TO MODERN AIRLINE DIGITAL PLATFORMS AND WHY EXPERIMENTATION SHOULD BE PART OF IT Ursula Silling CEO at Branchspace, prior Chief Commercial Officer at Kenya Airways, Commercial Director at Air Malta, EVP Commercial at Brussels Airlines and more Most airlines are still tied to long RFP cycles when it comes to implementing new IBE or digital product solutions. Is there an alternative, more agile way? Like doing a pilot on a smaller case where you see if there is a t, or redesigning or testing a new partner or platform on a smaller scale before committing to a long project? “I think getting to know each other rather than just doing an RFP and then immediately going for the marriage – it’s a very good point. Airlines often do the opposite. We’ve got lots of examples where, for example, we’ve been doing a digital review to really understand and benchmark performance and also very clearly help to nd quick wins to improve in the current environment rather than just looking for completely new solutions. That’s one part. Also benchmarking touchpoints and understanding the performance across touchpoints, even also physical ones. We also do UX and UI design as we realize how important the design is for customer experience. We’ve been doing this as well for a couple of airlines where suddenly they get to appreciate our innovative thinking, our approach, how thorough we are when going through this and how we fi fi fi fi 2023 Airline Digital Optimization Yearbook engage the whole organization and all of the key stakeholders to really make this work whilst bringing in our know-how and experience. And this on an international basis and relevant for the speci c environment of the airline. I think such a project can actually be another good starting point to create value and to get to know each other. I compare it with the example where you’ve got a shop and you don’t want to completely renovate it immediately when you have in mind some new customer experiences, maybe some new products and how to best position them, and you start by really doing a super well-designed shopping window to get some more interest. And suddenly you realize, “Hm, this works. Now I’ve got the con dence to restructure the main part of the shop, and maybe later on I will add other elements on top of this. And I have found the right partner to ensure it will become a success.” The “shopping window” is a nice analogy. You could even expand it by opening other shops, other touchpoints? "Exactly, open other shops, maybe add additional possibilities such as how you can reach the shop, maybe with some additional self-servicing outside of hours via self servicing machines so you can still buy your products. You can compare this in the digital world with all of the e-servicing that you would do for travel." 90 ASK THE EXPERT: “Maybe you suddenly want to experiment to sell completely different products, so you start your innovation journey, and you get the con dence. And you don’t only get the con dence in the partner; you actually get the con dence for your team to be able to do this, because this team needs to grow as well. Sometimes maybe your partner could move faster, but if the team doesn’t start to get the con dence – and initially there is often a certain fear with these changes – then you should do the steps more slowly. If suddenly they gain the con dence, “We can make this work, now we can really do more, this is great,” suddenly it gets the domino and it gets stronger and faster together all the time." Con dence for your digital team is a very important but often neglected part of this. Experimentation is another way for airline digital teams to build con dence, as they can learn and measure the impact of their changes. Why is A/B testing as part of an airline IBE platform still such a rare sight? So suddenly, if I take this example of experimentation and optimization, or A/B testing – airlines have been hearing that this is what Expedia has been doing and it works so well. This is how they became so successful, so good at customer experience. But airlines do not know how to get there. We include this in the experience, in the technology solution that we offer. It’s part of the platform. It means it makes it easy to really start and experiment and make it happen, and then adjust to where you want to go. This is, I think, another area where we help. And we can support with this as well, setting it up or managing it completely. We have been doing this for a few airlines for a long time, as the augmented team. Or we can do this to train, to help, to introduce how to set this up. And this applies for a number of different areas so that we can ensure for us, we set out, we’re a partner. I think that’s maybe the big difference for the success of tomorrow, not just to implement a technology and run away, but really to ensure that the business can succeed." "One of the problems which I have seen over time – because there is often not this a nity to technology and to the latest developments in digital within the airlines, there is also this – I sometimes call it “technology spaghetti.” There is not clarity. Where should I start? What do I really need? What is this vendor promising, how many other things do I still need to really make this happen? How will I ever bring this together with where I am? With our solution, we’ve got an out-of-the-box approach, if you want to. You can get all of the essential parts. It’s very modular at the same time. And you can also keep adding other modules if you want to. fi ffi fi fi fi fi fi fi 2023 Airline Digital Optimization Yearbook 91 I can be all different kinds of a consumer. A digital-web strategy of an airline should reflect that. What if dedicated Website Portals enabled a unified but personalised experience, irrespective in which role a consumer appears? Visit branchspace.com to learn more 2023 Airline Digital Optimization Yearbook 92 ASK THE EXPERT: EXPANDING CONVERSION RESEARCH AND EXPERIMENTATION TO OTHER AIRLINE DIGITAL TOUCHPOINTS Mark Hursh Senior Director of Digital Customer Experience at Southwest Airlines Most airlines apply this testing and user research to their main channels (desktop, app, etc.). I haven’t seen many do it on a kiosk level. I saw what you do on the in- ight entertainment when you’re testing. What was the learning experience there, and the feedback? Does it work the same as on your desktop? “I’m fortunate that we have the in- ight portal team on our digital experience team because longer term, I think we can do so much in that space. We have a great entertainment experience onboard, and we have the ability for you to access internet and free messaging and all that great stuff. We made the entertainment fully free a few years ago and saw great take rates. But I also see a really big opportunity – and we just need to spend more time in the space – to help better prepare you for your connection. We have connecting ight information, but we don’t have the push noti cations, as an example. If you have the app that’s telling you, “Hey, here’s what you should expect when you land in Houston for your next section of your journey. Here’s the gate you’re going to arrive at. Here’s where you’re going to go. Here’s how much time you have to get there, and that’s enough time for you to go take your kids to the bathroom or get folks fed,” it reduces that level of journey anxiety that comes from traveling. Travel is anxiety-prone. It’s a stressful experience. fl fl fi fl fi fl fl fl fl 2023 Airline Digital Optimization Yearbook So how do we take stress out of that for you? The in- ight moment is a great moment to do that while you’re sitting there. We actually see most people, the most amount of time is actually spent watching the ight map. People will sit up and put up a movie and put it in picture-in-picture mode.” Since we’re talking about the in- ight entertainment portal and you brought up Wi-Fi, how much control does Southwest have over that design versus your Wi-Fi partner? Do they let you do the frontend, or is there any kind of hand-off, if you will, between the Southwest designed portion and your partner? "We work hand in hand with them on the portal experience. On the portal experience we’ve had some great success with our current partner. A few years back, we did some research; we found learnings that we had from other app experiences, which was “Let’s put the key things in front of people.” We had this giant hero shot when you were on the in- ight portal, and then you had to scroll down to nd the key things that you wanted to go do, like watch a movie or what entertainment. We all had a simple hypothesis, which is “Let’s get rid of the hero shot and move all that stuff up to the top.” Lo and behold, 25% increase in take rates." That’s an example of testing that we were talking about. 93 ASK THE EXPERT: “Yeah. Free messaging was up I think 20% or 30%. Movies were up in similar fashion. We worked hand in hand in the research element of that to improve that experience. And all the providers have a different type of structure; some of them have out-of-the-box, some of them have fully customizable types of things. We have been fortunate in the area where we had that early partnership in that space, so we’re highly in uential in that. And we’re constantly testing in that space. We just launched Venmo recently and I was super surprised by the take rates of that product. It’s doing great. that space, and he came up with this great idea, which is changing buttons around based on your phase of journey. We saw increased take rates from those as well. Your rst button you might see is free movies and free live TV at the top, and then throughout your journey, we’ll pop up a button when you’re at a certain phase in the ight when drink service is about to begin so you can have context about your drink service and it’s handy. And then if you’ve used other products and services, some of those pieces go away and we pop something else up there, just to make it much more contextual." But there’s lots of little nuance that you may not even know. Steven is our digital product owner in fl fi fl 2023 Airline Digital Optimization Yearbook 94 VIII. Smarter Travel Marketing 2019 T IT L E O F D I G ITA L SURVEY O R G A N I Z AT I O N A L SUPPORT Airline industry insights for a higher conversion Month 2019 | © Diggintravel Q: WHO IS A DIGITAL OPTIMIZATION AND EXPERIMENTATION SPONSOR IN YOUR ORGANIZATION? • Level 1: None – digital optimization & experimentation is recognized on an individual level • Level 2: Head of Ecommerce – digital optimization & experimentation is recognized on a departmental level • Level 3: Director level – digital optimization & experimentation is recognized by director or higher management • Level 4: VP level – digital optimization & experimentation is recognized and supported by VP level executive (top management support) • Level 5: Entire organization – digital optimization & experimentation is recognized as a crucial activity and has company-wide (C-level) support 40% 33% 27% 20% 13% 7% 0% Level 1 Level 2 Level 3 Level 4 By Size By Type 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% Level 1 Small Level 5 Level 2 Level 3 Medium 2023 Airline Conversion Optimization Survey Level 4 Level 5 Large 0% Level 1 Level 2 Level 3 Level 4 Level 5 LCC FSC 96 KEY STAT: DIGITAL, OPTIMIZATION AND EXPERIMENTATION ARE MOVING UP ON AIRLINES’ AGENDAS While optimization and experimentation are recognized and supported on a department level for the biggest cluster of airlines in our survey (35% are at Level 2), there is now a signi cant share of airlines (38% are at Level 4 or Level 5) for whom digital optimization and experimentation have company-wide exposure and top management support. As in other categories, LCC airlines are at the forefront when it comes to recognizing a datadriven approach to building great digital products. 55% of LCC airlines are at Level 4 or Level 5, which means digital optimization and experimentation are recognized on the top level. Partially this is because of background and organizational structures; direct digital channels are the predominant (or even only) distribution channels for LCC airlines, while FSC airlines were built on indirect distribution and have shifted towards direct channels in the last decade. LCCs (and small airlines) also have a atter organization, so digital leaders have more access to C-Level executives. But there is more to it than history; LCC airlines recognize that digital needs to be embedded in the company’s DNA if airlines want to compete with other global travel and big tech giants. Most of the modern digital roles and examples we’ve shared in other sections of this Yearbook come from LCC airlines. This is not a coincidence. Some of the airlines from our examples have digital, data-driven and experimentation-based decision-making in their company vision and mission statements. You can nd two such cases in our “Examples” section. and less hierarchical organizational models that are more suitable for building digital products. In our “Examples” section, you’ll see that Air New Zealand is working on a matrix Chapters and Tribes model, where Data and CRO chapters are supporting Brand, Marketing, Retail and UX tribes. During our research and interviews with airline digital leaders, we ran across other FSC airlines that are working on establishing experimentation support functions (Center of Excellence model) to enable their digital product teams to experiment. Another sign that CRO and experimentation are gaining more exposure is a positive shift when it comes to airline budgets. 50% of airlines in last year’s survey said they didn’t have any budget for CRO and experimentation. This share dropped to only 30% this year. For most of the surveyed airlines (56%), CRO is part of the marketing and ecommerce budget, but 15% of airlines have a dedicated budget for experimentation. Data-driven decision-making should not be part of digital optimization teams only. It shouldn’t be seen as a growth hack or a way to trick the user into purchasing a product. To achieve long-term growth, airlines need to embrace optimization and experimentation as a strategic initiative. But while LCC airlines are at the forefront, several traditional carriers are experimenting with modern fi fl fi 2023 Airline Digital Optimization Yearbook 97 How are experiment results and learnings implemented and shared across the organization? Shared to broader ecommerce & digital teams (or other commercial teams) Actively spread throughout the organization (entire organization has access to experiment results and stakeholders are proactively informed about all experiments) Discussed exclusively within the optimization team Untitled 1 Not shared across the organization Untitled 2 0% 10% 20% 30% 40% 50% 60% 70% 51% 60% Do digital optimization & experimentation have their own budget? No, digital optimization & experimentation are not mentioned speci cally in the budget. Yes, it's part of the marketing or e-commerce budget. Yes, we have a dedicated budget for experimentation. Untitled 1 0% 9% 17% 26% 34% 2023 Airline Digital Optimization Yearbook 43% fi 98 KEY TRENDS: WHAT CHANGED COMPARED TO 2022 We hope that this Yearbook and our other Diggintravel content can help airlines in adopting a modern, data-driven digital mindset and will be recognized as a valuable resource on their digital transformation journeys. 40% 32% 24% 16% 8% 0% Level 1 Level 2 Level 3 2023 Level 4 Level 5 2022 The shift from Level 3 to Level 4 that we’ve seen in other areas of our maturity model is re ected in organizational support. There was another notable improvement: there are fewer airlines where digital optimization and experimentation are recognized only on an individual level (Level 1), as it seems that some of those airlines have moved to Level 2 of our maturity model. Recognition for CRO and experimentation typically starts with an enthusiast (you can nd an example of such a journey in Section I); however, the key goal of the internal CRO champion is to start embedding experimentation in the broader digital teams and, later on, throughout the organization. In our previous Yearbook, we noted that some airlines “used” the pandemic to focus on digital and building their direct ecommerce channels. This trend will continue in 2023, as many airlines are re-investing in their digital teams and digital platforms. Investment in mobile apps, booking engines, personalization and data are at the top of airlines’ agendas for 2023. fl fi 2023 Airline Digital Optimization Yearbook 99 What will be the focus area of your digital optimization team in the next 12 months? [Please select up to 3] Investment in mobile app Investment in internet booking engine (upgrade, optimization or simpli cation) Investment in personalization and customer data (CRM, CDP, personalization engines) Untitled 1 Investment in data & analytics (e.g. migration to GA4, other analytics implementations) Untitled 2 Investment in customer servicing (Manage My Booking, Check-in) Untitled 3 Investment in core website (e.g. frontend, CMS, home page, key landing pages…) Untitled 4 Investment in retailing and product enhancements (e.g. retailing UX features, adding new ancillary products in the booking ow) Untitled 9 Investment in experimentation and A/B testing platform Untitled Investment in customer noti cations and other post-booking customer engagement and targeting Untitled 5 Investment in other digital touch-points (e.g. B2B or B2T portals) Untitled 6 Others Untitled 7 0% 10% 20% 30% 40% 50% 60% 70% 2023 fl 100 fi fi 2023 Airline Digital Optimization Yearbook EXAMPLES LOW-COST AIRLINES PROMOTING DATA-DRIVEN AND EXPERIMENTATION CULTURE easyJet and Eurowings Digital are two lowcost airlines that have digital, data-driven and experimentation-based decision-making in their company vision and mission statements. 2023 Airline Digital Optimization Yearbook 101 EXAMPLES AIR NEW ZEALAND CHAPTERS AND TRIBES MODEL Air New Zealand is working on a matrix Chapters and Tribes model, where Data and CRO chapters are supporting Brand, Marketing, Retail and UX tribes. 2023 Airline Digital Optimization Yearbook 102 REFERENCES & SOURCES REFERENCED DIGGINTRAVEL RESEARCH AND ARTICLES: Diggintravel 2022 Airline Digital Optimization survey https://diggintravel.com/2022-airline-digital-optimization-yearbook/ Airline Scienti c Decision-Making [LATAM Airlines case – Part I] https://diggintravel.com/airline-scienti c-decision-making-latam/ Step-by-step Evolution of Airline Digital Optimization and CRO Team https://diggintravel.com/airline-digital-optimization-and-cro-team-air-europa/ Airline Digital Talks: Eveline Lee, Scoot https://diggintravel.com/airline-digital-talks-eveline-lee-scoot/ How to Grow Your Airline Digital Product Team https://diggintravel.com/airline-digital-product-teams/ How to Build a Modern Airline Digital Experience https://diggintravel.com/how-to-build-a-modern-airline-digital-experience/ Airline Ancillary Revenue Leaders Talks [Frontier Airlines Case] https://diggintravel.com/airline-ancillary-revenue-leaders-frontier-airlines-case/ Airline Digital Optimization Maturity: How to Take the Next Step https://diggintravel.com/airline-digital-optimization-maturity/ How to Build Innovative Airline Digital Products [Southwest Airlines Case] https://diggintravel.com/innovative-airline-digital-products-southwest-airlines-case/ REFERENCED ONLINE RESOURCES Google Optimize Sunset https://support.google.com/optimize/answer/13257663 Google is Shutting Down Optimize in 2023: 22 Alternatives for A/B Testing https://cxl.com/blog/ab-testing-tools/ Some Testing is a Waste of Time: Making Business Cases for Big Bets https://www.reforge.com/blog/roi-of-testing 39 Conversion Rate Optimization (CRO) Tools Used by Experts https://measuremindsgroup.com/cro-tools-used-by-experts Experimentation Program Maturity Audit https://speero.com/experimentation-program-maturity-audit The evolution of optimization: How to make your program grow and mature https://albertacg.com/the-evolution-of-optimization-how-to-make-your-program-grow-andmature/ 103 fi fi 2023 Airline Digital Optimization Survey Smarter Travel Marketing Airline industry insights for a higher conversion Month 2019 | © Diggintravel