In trying to ensure that it maintains its positioning as the “World’s Favourite Airline”, British Airways has turned increasingly to sophisticated direct marketing and data analysis to learn more about its customers’ habits and expectations .
BA’s loyalty scheme is one tool the airline has used extensively to this end, and its Executive Club alone has amassed data on more than 2.5 million members, along with millions of flight records, over the past few years.
And in order to better understand the data and highlight business opportunities, BA’s customer information department has recently recruited Scottish software company Quadstone. The company acts as a computer bureau, holding the Executive Club’s data on its Unix workstations and performing detailed analyses using its Decisionhouse decision support software system.
BA’s in-house analysts spend two weeks every month with Quadstone, looking at the patterns which emerge from the data.
Mike Lawrence, the airline’s customer information manager, is loathe to disclose what BA is doing for fear of giving information away to rivals, but he does confirm that the exercise goes far beyond identifying that small number of customers who make up a disproportionate amount of the club’s traffic.
Lawrence says: “We’ve gone beyond the 80/20 rule. We wanted Quadstone to confirm our understanding of our data. Although we have a lot of experts in-house, we wanted a fresh eye.”
Quadstone started working with BA in November 1995. Kevin Collins, the company’s commercial director, says: “One of the problems with analysing large volumes of data is speed. We have developed software systems which allow us to compress tasks like this from three months’ work down to a day or even an afternoon.”
He explains that the traditional analysis process has been very laborious, with constant to-ing and fro-ing between business analysts and their IT departments. Quadstone will enable analysts to manipulate data quickly themselves, cutting the IT department out of the loop
Collins also points out that such data analysis techniques are not just useful for marketing purposes: they can also help with tasks like risk analysis, which he says is “two sides of the same coin – identifying the customers who will be profitable, and those who will be a risk.” This is the first time Quadstone has worked for an airline, although its customers include some of the UK’s biggest companies, including BT. Lawrence preferred this lack of airline experience, but he admits it did mean a delay as Quadstone got up to speed with BA’s business. He says: “It’s good to have a company slightly removed from our business, although you do need to get a good understanding between the teams. There was an enormous amount of work involved to convert our data so that we could manipulate it, but once that was done we were able to play around with it and build decision trees very easily.”
Lawrence particularly likes the way the Decisionhouse system presents information in a visual form on-screen. He observes: “We could look at a decision tree, say ‘what if we did this?’ and then see what the effects would be.
“It has come up with significant opportunities and we now have to make use of them,” he says.