In the digital era, information is omnipresent and available at the click of a button. To stand out and make your communication effective, it is extremely important to engage the customer with the right information at the right moment. Hence, Personalization has become more relevant than ever in today’s world.

Sometimes, people confuse personalization with customization: though both seem similar at the onset, there is a difference. Customization is about the choices that are available with the customer, while personalization is about providing the relevant choices based on the customer’s past behavior, buyer status, age, time of the year etc. With a personalized suggestion, the customer feels more empowered, informed and important, which results in better customer engagement. For businesses, it means better conversion from shopping cart to order and cross-selling and upselling to increase customer spend.

As per McKinsey report on the Future of Personalization “Personalization will be the prime driver of marketing success within five years”¹.

Today, personalization is not just driven by data crunching but has adopted machine learning (ML) to anticipate customer behavior considering numerous parameters that can impact customer buying habits. CMOs have been using personalization as the most effective tool to run marketing campaigns and are adopting real time personalization to increase customer engagement, customer retention and repeat business.

The most relevant use case for personalization is online shopping. Amazon has been delivering excellent personalized experience to users, whether on the website or mobile. Amazon has now opened the ML-based personalization engine it uses for driving customer stickiness to users of AWS Cloud.

Amazon Personalize: Real time personalization and recommendation

Amazon Personalize is a machine learning service that makes it easy for developers to create individualized recommendations for customers using their applications. The best part is Amazon Personalize services can be used by developers with no prior machine learning experience but can still build sophisticated personalization capabilities into their applications, using machine learning technology perfected from years of use on Amazon.com. Amazon Personalize provides an activity stream from your application – clicks, page views, signups, purchases, and so forth – as well as an inventory of the items you want to recommend, such as articles, products, videos, or music. You can also choose to provide Amazon Personalize with additional demographic information from your users such as age, or geographic location. Amazon Personalize will process and examine the data, identify what is meaningful, select the right algorithms, and train and optimize a personalization model that is customized for your data (Amazon Personalize description sourced from https://aws.amazon.com/personalize/).

Apart from the multiple use cases for ecommerce, Amazon Personalize will be effective in improving customer experience for the airline industry and driving additional business through loyalty programs.

Amazon Personalize for the Airline industry

The power of Amazon Personalize in airline applications will help manage loyalty, and sales and promotions. Loyalty programs are not a new concept but due to the changing technology landscape and customer behavior, it needs to be relooked to improve customer experience.

Traditional loyalty programs provide static options to the customer based on the loyalty points accumulated over a period. With Ml-powered Amazon Personalize, more curated and optimized options (travel packages, gifts, extended stays etc.)  can be presented to the customer based on multiple factors like past travel interest, demographics, itinerary, hops etc. This can be made available to customers while booking the tickets or offline through custom campaigns.

Amazon Personalize service brings to the Airline industry a unique opportunity to upgrade their existing loyalty program applications. This will enable loyalty applications to provide more personalized promotions and offers, proactive alerts for personalized promotions, travel packages, and gift purchases to passengers. For airlines, this will result in better customer engagement, stickiness, more digital ads, high conversion ratio to sales, thus resulting in increased revenue, improved partner ecosystem and above all, great customer experience.

Benefits of the loyalty personalization application are given in Figure 1.

Loyalty programs are not restricted to the Airline industry but applicable across major customer facing industries like Banking, Retail, and Hospitality. As the loyalty programs evolve with advanced ML and Amazon Personalize service, in times to come, loyalty will be the key instrument for driving customer experience.

Reference

1 - https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-future-of-personalization-and-how-to-get-ready-for-it