EveryYou and Customer Reward: When an upgrade is not the right response

My EveryYou concept is about developing specific and targeted recommendations (which can include rewards) of one based on the unique combination of desires, needs and interests of each individual at any moment in time. I had a chance this week to experience an example of the deficiency of customer profiling and standard practice and thus a place where a more individualised (EveryYou) approach would have been much better.

I have just bought a house – should be celebrating. But due to a twist of fate and timing I have to spend the next two months in a serviced apartment before I can move into the new house. It is nothing too dramatic but gave me a chance to sample the serviced apartment market. I won’t mention the provider but they very kindly offered me a complementary upgrade to a bigger apartment with a view. Of course I was pleased to accept. Just prior to check-in we settled all the details of the stay including the deposit payment and my confirmation that I would be brining by wife, seven year old and three year old.

On check-in we discovered that the upgraded apartment was much bigger than expected, had great views over the park and had the bonus of a separate study/office. But we had to move out immediately. As large as the apartment was, it was completely unsuitable for children under 12 let alone 7 and 3. Firstly the bedrooms were on two separate floors. Meaning that my wife and I would have to sleep on a different floor to the children – not acceptable when one of the bedrooms is right next to the front door that cannot be locked. Secondly the study/office (on the second floor) had two windows at child accessible height that could easily be opened and pushed outwards. Easily exposing a young curious mind to a ten floor drop and instant death. Either we put the children in a bedroom next a door where the three year old could leave the apartment without us knowing or in a bedroom near a study with easy access to a deadly drop.

When we spoke with the front desk, they could not understand why we wanted to move (clearly not parents) and especially could not understand that we wanted to turn down the upgrade and take a smaller (but safer) apartment. This exposed two things to me. Firstly how “the upgrade” is one of the few (if not the only) pre-check in reward that a hotel/serviced apartment has set for sharing with consumers. Secondly how in the serviced apartment market the staff are not as well prepared as hotel staff for non-standard request.

Under a generalised profiling system of customer rewards, it is clear that the vast majority of customers would love to receive an upgrade. But trusting generalisations and profiling can lead the hotel/apartment sales rep to use it as a reward when deeper analysis would show that other rewards would better impress and therefore make more loyal a customer. If my wife and I were on our own or with adult travelling companions (ie the "weekend holiday away with friends" version of me) then the upgrade would be perfect. But if the accommodation provider had spent the time analysing and using the data they had on me for this trip (ie the "parent" version of me) then they would have determined that the reward I would have been more interested in would be a twin room as the second bedroom or an apartment closer to the swimming pool or free car parking. On another occasion (ie the "business traveller" version of me) it would be free wifi rather than a bigger apartment that would be the perfect reward. Generalised profiling is no match for taking the time to use data provided by customers and technology available to suppliers to target rewards/recommendations suited to not just the individual but the version of the individual that happens to be travelling at the time (EveryYou). Using these techniques would prove to my landlords for the next two months that a upgrade is not always the reward it should be.

Thoughts?

Secret to Innovation - technology and social movement together. Thoughts from PhoCusWright Innovation Summit

Another follow up from yesterday’s Travel Innovation Summit at the PhoCusWright. During the presentation I saw a lot screens and tech diagrams from innovators showing the latest in Web 2/3.0 technology. Lots of impressive looking technology touching on search, collaboration, analytics, content aggregation, mobile and more. Despite the impressive nature of the technology on display I came away reminded that technology is not enough for innovation. With innovation there is also critical need for an execution element and timing the product with social readiness for its adoption. For a new piece of technology to be capable of becoming an innovation it has to be timed to match the social movement and consumer readiness to use it (or be capable of holding on long enough for consumers to catch up).

This was particularly front of mind for me because only recently we learnt about Yahoo! finally shutting down GeoCities (TechCrunch story here). A business it bought for $2.87billion. At the height of GeoCities (wikipedia here) popularity it was the number one place for user generated content and destination information. It was the blogging platform before there were blogging platforms. Countless personal GeoCities pages were set up by individuals to talk about their lives, animals, home towns, travel experiences and more. Millions of words of local content were available through GeoCities years before TravelMuse, Nileguide, Geckogo, Tripsay, TripAdvisor, Uptake, etc were a glint in an angel funder’s eye. Yet it died. Clearly not for lack of user generated content. Sean Keener of BootsnAll said at breakfast yesterday that GeoCities died because Yahoo! blew it because they did not know what to do with it. There is something in this. But another reason why GeoCities died was that it came out too far ahead of the desire for consumers to share themselves with the InterTube world. When GeoCities was at its peak in 2000/2001 the traffic was high, the usage was ok but there was no revenue model (no AdSense or equiv) and no sharing and distribution mechanisms (twitter, facebook, URL shortening). The consumer trend for writing, sharing and engaging in social commentary was not there to support the business. The product/technology was launched too far ahead of the social desire and trend to use it.

Don’t believe in this need for technology and social change to be together? Let me give you another example. In 1996 – as a young lawyer- I was excited to load PointCast as my screen saver. Without me having to click a button or search a site, news and information was pushed to me. All the information I used to have to surf around to find was coming to me in a means that was more convenient, faster and “hands free”. Everybody in the firm followed suit and downloaded the product. Then in Jan 1997 (wikipedia story here) Murdoch offered $450mm for company. While PointCast was holding out for more money network admins across the corporate world were finding their network s crashing down under the load of constant information queries. Employees were banned from using PointCast. Without complaint we shrugged and uninstalled PointCast. The critical part was “without complaint”. We liked the feature but did not need it. It was not that big a deal to go back to reading the local paper, BBC and CNN online. Within moments Murdoch pulled the bid and PointCast was later sold for (a paltry) $7mm and shut down a year later. Fast forward to 2009 and each of us has a newsreader indexing hundreds of information and news site. If companies tried to block newsreaders there would be an employee revolution and drop in productivity. PointCast was the first prototype of a news reader but socially we did not need to fight for it and did not miss it much when it left because there wasn’t enough content out there to compel the need for an aggregation product. Technology came too early for the consumers.

My point from these two examples is that when trying to innovate it is critical to focus as much on timing and social readiness as it is to focus on the technology and product. Making sure consumers are available and ready to pick up what you are building.

I talk about this in my EveryYou concept. Our ability to develop a specific and targeted recommendation of one based on the unique combination of desires, needs and interests of each individual at any moment in time is only now becoming available because of the matching of technological capability (near unlimited processing power) and consumer desire to share information and data and receive targeted advice and replies.

What do you think? How important is timing in innovation?

thanks to Vermin Inc for the photo

Tnooz: BOOT on Lonely Planet on Tnooz

By second post for Tnooz is live titled "Tips for what Lonely Planet should do next". Contains some background on Lonely Planet's online plans over the last few years, the online and brand vision from new CEO Matt Goldberg and my recommendations on what else they could do. Check out the post here for more. He is an extract with my recommendations for Lonely Planet:

1. Content Expansion: Make more and more of the content currently only available in books available online with the aim of being the number one organic search results for every major destination search item. It might hurt some book sales but winning in organic search will be more valuable long term;
2. Open Syndication: Increase syndication capabilities by allowing bloggers, writers, transaction sites, Facebook pages and more to access content material is an open way. Similar to point #1 above, it might cost a few book sales but being the social network content source of choice will be more valuable long term.
3. Facilitate and Make EveryYou Recommendations: Invest in recommendation technology to allow the community forums and information to be combined with the editorial content, booking behaviour and other data available to put Lonely Planet at the forefront of the development of specific and targeted recommendations of one based on the unique combination of desires, needs and interests of each individual at any moment in time. See My EveryYou concept. It will cost money and development time but the future of inspiration and content sites are targeted recommendations.

Tnooz editor Kevin May has followed up with a post "We love Lonely Planet and want to see it get better says the BBC", where an interesting debate has started.

Long Tail and travel - Chris Anderson shows data

I am sure the timing is a complete fluke but two weeks after I published my first challenge to Chris Anderson's Long Tail theory in my post EveryYou: Individuation and going beyond the Long Tail theory he published a post on seekingAlpha called the Long Tail of Travel. In this post he carries some search data analysis that says that over time the top 50 destinations out for the UK have fallen from 36% of the total destinations in travelled by air 1998 to 26% in 2008 driven by low cost carriers, consumer demand and more. He has based this on data from the UK CAA. His post contains a graph and link to the data.

I have no doubt that searches for body and tail destinations are up and growing but we need more that just the Long Tail theory to allow demand for the tail to be unconstrained. We need targeting, recommending and discovery tools that allow consumers to find things they did not know they wanted to know about and trust the answers they get. [Broken record time] we need to use the technology and social changes made available to generated individuated search responses to open ended web queries.

WebInTravel: WIT presenation 2009 - Recommendations, Long Tail and EveryYou

Tim Hughes WIT presenation 2009 - Recommendations, Long T...

tims-boot's Podcast

On doctor's orders I had to cancel my trip to WebInTravel this year. Here with slides and audio is the presentation I would have given today if I had been there.

Key themes are

1. the long tail theory is now 5 years old. That is "decades" in Internet years. It is time for a rethink;
2. we now have access to effectively unlimited computational power (technology change);
3. consumers are voluntarily giving us data and information about themselves - often for no obvious tangible gain (forwarding links, writing reviews, uploading photos, setting up detailed traveller profiles etc) (social change); and
   
4. if we work to put together the technology change and social change we can target EveryYou rather than Everyone. Can develop specific and targeted recommendations of one for an individual. Rather than a recommendation based on demographics, a recommendation of one based on the individuals unique combination of desires, needs and interests.

PS - forgive the timing of the slides, they are not quite right but the message comes through.

EveryYou in Germany

A German blogger has picked up the EveryYou concept. Here is the post on the Hermann Hohenberger Blog in German and the badly translated by google version called “The End of Target Groups”.

Tnooz: first BOOT story on Tnooz live on Augmented Reality, EveryYou and more

My first story for the new Tnooz site is live called "Augmented Reality, mobile, search and (maybe) getting it wrong". As well as touching on Augmented reality and mobile apps I give even more background and analysis on my emerging EveryYou concept. Read the full story here.

EveryYou: Individuation and going beyond the Long Tail theory

This post is part of my developing series on the EveryYou concept– the ability we are developing to create a specific and targeted recommendation of one based on the unique combination of desires, needs and interests of each individual at any moment in time (first post here).

It is Internet marketing heresy to say anything that might contradict the gospel of the Long Tail – Chris Anderson’s now famous 2004 book on how the removal of the constraint of needing to support physical inventory and location (ie moving from stores to sites and physical to bits) has expanded marketing and sales opportunities beyond items that have achieved mass popularity to the niche and obscure. Anderson says this will result in demand shifting shift from the Head (mass popularity) to the Tail (niche products). But in my introduction to the EveryYou concept I said that one of the advantages we now have from the four dimensions of data available to us is that…

“We could kill off the head, body and long tail of sales and replace it with a sale of one, a market of one for the EveryYou.”

It is dangerous to be a heretic in Internet folk law but thankfully I found some support for my blasphemy in a recent article from Knowledge@Wharton called “Rethinking the Long Tail Theory: How to Define 'Hits' and 'Niches'”

In this article professor Serguei Netessine and doctoral student Tom F. Tan looked at Netflix data to see whether or not the growth in niche or tail sales was proving that the tail was catching the head. They concluded that

“The presence of the Long Tail effect might be less universal than one may be led to believe."

Instead of seeing the death of the 80:20 rule, Netessine and Tan found that the growth in demand for the top 20% of the movies (ie the head) was faster than the rest (the Tail) (note that the data was comparing 2005 to 2000). One of their conclusions was that the challenge with internet distribution was not the supply side (making digital inventory available on the web) or the traffic side (bringing people to the web) but was the discovery side (getting the people to find the thing they did not know they were looking for). Netessine and Tan say

“product variety has been skyrocketing in the Internet age, and therefore more and more products can be left unnoticed by consumers, or are being discovered very slowly, even though the customer base is also expanding."

This is exactly the point of the EveryYou principle adds value. The Long Tail is based on matching the unconstrained supply of the Internet to niche demand. What is missing is that the niche demand in Long Tail theory is constrained because it depends on knowledge. That is, someone can only demand a niche product if they know about it and believe that they like it (or could like it). For unconstrained niche demand you need to have a systematic and automated means of making trusted and targeted recommendations to someone. This is the EveryYou principle. Using the four dimensions of data we now have on people interacting with our sites (breadth), the different things an individual does on a site (depth), the interrelation between the data we have one person and others (context) and the freely provided data we have unrelated to transactions (community) we can develop a specific and targeted recommendation of one based on the unique combination of desires, needs and interests of each individual at any moment in time.

Without the recommendation part the tail is undiscoverable and therefore demand constrained. Through the EveryYou principle you don’t need to think about a head, body or tail as you can use technology and social change to target each recommendation and individual as a single, individuated marketing activity.

More on EveryYou soon.

PS - thanks to Madame BOOT for sending through the article

Preparing for WebInTravel: Reviewing the BOOT’s predictions for 2009

With TRAVELtech over it now time to prepare for WebInTravel in Singapore October 20-23. organiser Siew Hoon ask to to prepare an article prior to the conference on my thoughts on 2009 so far and beyond. Here is an edited version of submission

Back in January I made six predictions for 2009:

1. There are more airlines to go bust
2. Growth in domestic travel growth will surprise us all.
3. Consolidation is not yet finished:
4. 2009 will not be the year of mobile for the travel industry:
5. The dinosaurs (traditional offline travel companies) will screw up and come out of the GFC even weaker: and
6. The last minute model will come back.

With Q3 about to end, I will use this article as a chance to review each prediction and see how they are tracking:

1. Airlines – the list of grounded airline companies is growing each day. So far in 2009 we have lost Myair, Skyeurope, JetAmerica, East Star Airlines, Air Senegal and many others (thank you Airline Closure blog). Might still lose Frontier but on the bright side (I think) Alitalia was saved. The year is not yet over and there is vulture talk around Air Canada, US Airways, United and BMI;

2. Domestic travel – The Google results for “boom in domestic travel” produce a list of some 186,000 results touting the growth in domestic markets around the world including supplier sites, news site and DMO sites. The mashup word Staycation has entered our vernacular (despite its cringeworthiness);

3. Consolidation – We have not seen the consolidation I expected at the start of the year. There as some tuck-in deals but no multi-hundred million dollar deals to talk about. Instead we have seen no slow down in travel start ups raising funds. The WSJ carries a list of ten of the most notable (including Tripwolf, Dealbase, TVTrip and Yapta);

4. 2009 and mobile: This was my most controversial prediction and many did not agree with me. The argument in favour of my prediction is that bookings of travel via mobile phones apps (outside of Korea and Japan) are still very small and arguably inconsequential to the $150+ billion online travel industry. Arguing against my prediction is the near unstoppable growth of smart phone sales (Blackberry, iPhone, Palm etc) (see Norm Rose’s recent post on this) and the amazing display of augmented reality mobile applications recently captured on Mashable including Nearest Tube and Wikitude;

5. Death of the dinosaurs: In my part of the world Stella Travel is half the company it was a year ago and Flight Centre’s profits have fallen dramatically. But it is not their financial results or size that interest me; it is the continued denial by the leadership of those companies that they need to take the online world seriously. Peter Lacaze of Stella is a known online travel sceptic. He is recently quoted on TravelTrends as saying “not in my lifetime” in response to a question about the internet taking over half the market in Australia (despite the fact that this is already the case in the US). Flight Centre’s Graham Turner spoke at length after his FY09 annual results (see TravelToday pdf here) on how little he was worried about online travel companies and that they were not a threat to his business. Instead of taking the chances offered by a downturn to invest in new areas Lacaze and Turner continue to tell themselves that they don’t need to worry about online; and

6. Lastminute is back: This was the easiest prediction to make and have come true. There is data out there on reductions in lead times but the best form of proof is for you to do a search on any major online hotel player for check in tomorrow night and look at the deals that are available. The piece that surprised me was the parallel strength of the advance purchase side of the market.

There is one other thing I have my eye on for the rest of the year and beyond. It is the work that retail sites (like OTAs), search sites (like meta-search), content sites (like review sites) and discovery and inspiration sites are doing to personalise deals, search results and content streams down to the level of the individual. Much like how my twitter stream is different to every other stream because my follow list is a unique combination. Based on a concept known as individuation, I call this “EveryYou” . Stay turned for more on this topic during my WIT 2009 presentation and in later posts on the Business Of Online Travel.

EveryYou: using Individuation in travel to target a recommendation of one

I have just finished presenting at TRAVELtech 2009 on trends in social media, mobile and my new concept of EveryYou.

There is a concept from psychology, economics and demographics called Individuation. I will dodge the Carl Jung and Neitzche inspired definitions and give you the short one – Individuation is the process in which individuals become differentiated from each other. I am seeing the theories of individuation coming into the mobile and social media space in travel and I predict that we will all have to come to term with this notion as we develop means for capturing consumer attention.

In a recent article in Theoretical Issues in Ergonomics Science (Sep2009, Vol. 10 Issue 5) called "Individuation: the N = 1 revolution" by P Hancock, G Hancock and J Warm say that...

"a continuing increase in computational power and associated memory storage capacities will lead to circumstances in which each and every single person can be coded as, and treated as, a separate individual and therefore not necessarily as a representative part of any group, sample or population"

This is the concept of Individuation that the travel industry can now embrace to target consumers on an individual level rather than through representative group samples.

In the past we have undertaken consumer planning through analysis of the average behaviour of a group of consumers. Individuation in this context says that once we have the right matching of technology and social trends we can move from tracking the average, generic profiles or demographic groups to at scale analysis of what Hanckock et al call “specific instances of momentary behaviour of one single individual”. This already exists in psychology, neuro science and molecular genetics where the combination of data, technology and social preparedness allows those sciences to be able to track and understand for the first time “how specific individuals perform their own personal and very complex acts of cognition” (Hancock et al again) rather than rely on averages.

In travel we can use these same techniques to classify and recommend at a level of EveryYou rather than Everyone. The reasons I am attracted to this concept have arisen through the technology capabilities that we now have and the community/social environment we are now in. Let me explain how this happened and why you should care.

In the early days of online travel we revelled in the data we were able to collect from customers but really we were only able to see that data in two dimensions – Breadth and Depth. By breadth I mean that we were able to use and collect data on more than one person interacting with the site and sometimes other sites. By depth I mean that we were able to track the different things that consumers did on the site. This allowed us to manage our sort orders. To bias the display based on consumer behaviour to help generate what we think are the best result for a basket of consumers.

In the last few years we have improved on this and added a third dimension to our data collection and analysis. We have added Context. The ability to see the inter relationship between the data we have on one person and the data we have on others. Through our actions, those of the consumer and other consumers we can link previously unrelated data based on the relationship between different people and past collective behaviour rather than one off activity. We have seen this in the complex CRM systems we have all bought and use every day.

The common theme with the first three dimensions is that we have collected the data from consumers “without their knowledge”. That is not as sinister as it sounds because we have regularly asked for consent. The fourth dimension is Community – which is data that is freely given to us by the consumer. Often unrelated to a particular purchase. And not necessarily for a tangible gain. Though there is very often an intangible gain. What are examples – writing reviews, forwarding links to friends, making recommendations to strangers, building online profiles, contributing to forums, writing a blog etc. The combination of these four dimensions of data can result in an individuated experience. An experience in online media, retail, or community that is unique to an individual but also part of a group experience.

We have seen this individuation in media already. Your twitter feed, facebook newstream and RSS reader list is different to any other anywhere. As the Digital Deliverance group said in their post "What are Individuated Media (What are the New Media)?"

"...the most widely used Individuated Media vehicle today is Facebook. Its more than 200 million consumers give it a mass reach that very few of the world’s Mass Media can equal, yet each of those consumers see different content than one another

Collecting four dimensions of data is not easy. It requires technology leaps in bandwidth and computer processing power - which we now have. The technology needed to allow us to capture and process the data is now matched with the desire of internet users to seek answers to open ended questions and contribute into a community process.

For us as marketers, retailers and media people it means we no longer have to be constrained to gear our marketing to EveryOne. Sure we developed demographic cuts and installed CRM systems to improved the targeting but we were still marketing to EveryOne in the hope of catching the individual. Now with the matching up of technology and social desire we can seek to market to the EveryYou.

The four dimensions of data and technology now allows us to do away with 30 years of econometric dependence on distribution, central tendency and variation – you know bell curves – and instead we can envisage the ability to research an individual at scale rather than rely on measuring their responses as part of a group or sample. Instead of seeing individual behaviour as a “variance” or “outlier”, we can aim to target Every combination of individuals. The EveryYou rather than EveryOne.

Here is my definition of EveryYou:

“The development of a specific and targeted recommendation of one based on the unique combination of desires, needs and interests of each individual at any moment in time”

The EveryYou concept I am working on says that technology and social change put us in a place where we can work on a recommendation of one rather than relying solely on generalisations.

EveryYou marketing and planning approaches are now available to us because of new developments in:

• Social trends that favour online interaction;
• technology innovations that provide organisations with the four dimensions of data; and
• scalability.

In the travel industry, EveryYou means we can answer the question “where should I go next” with a specific answer. We can answer the question which hotel should I stay in "Rome" with an answer that references past purchase behaviour, past reviews written, friends on facebook, people trusted, media read etc. That takes into account that human beings are a mess of contradictions in the things that they like and want. For instance I love the blues, Byzantine mosaics, bad zombie movies and body surfing. No bell curve can market to that.

Companies can treat users as co-researchers in developing a bespoke solution for their individual requirements. The user's needs are met by conjoining the company's expertise in travel and the user's expertise of themselves, thereby creating a tailored travel solution for one. Consumers are and will be willing to provide information on the understanding that it will eventually be deployed to their benefit.

If we use the technological capabilities and social trends available to their fullest potential then we can conceive of a day where we do away with general principles and customisation for the group and instead market to the apparent contradictions in consumer behaviour and aim for the delivery of specific, unique and targeted answers. We could kill off the head, body and long tail of sales and replace it with a sale of one, a market of one for the EveryYou.

Want to hear more? Stay turned to the BOOT as this will be the major area of analysis and work for me on the blog. You can also see me speak on this at WebInTravel October 20-23 in Singapore.

BTW - sorry to get all proprietary but this concept of EveryYou has been put together by me and all in the IP including copyright in it is mine.

Update - thanks to Paul Baron for a photo of me speaking



PS - anyone know how to turn it the right way round?