Guestlogix: Psychology May Hold Key to Improving Passenger Experience and Airline Profitability
18-Oct-2017 New study reveals how combating "learned helplessness" can lead to empowered passengers who enjoy more, spend more
Guestlogix, the global provider of airline commerce technology and a pioneer in onboard retailing and ancillary revenue generation, has published an academic report identifying the psychological concept of "learned helplessness" which inhibits airline passengers from enjoying their experience and negatively impacts airline revenues. The report provides actionable insights on how airlines can solve this problem to their benefit.
The report is entitled "The Empowered Passenger: Break the Cycle of Learned Helplessness to Drive Customer Satisfaction and Higher Revenues." The author of the report, Dr. Gary Edwards, PhD, has helped executive leaders of the world's best-known brands take a Decision Sciences approach to solving complex business challenges.
"Passengers respond positively or negatively, profitably or less profitably, depending on their choices," said Dr. Gary Edwards. "We wanted to dive deep into passenger psychology and connect it back to bottom-line decision making in the airline industry."
Among the report's main findings:
- Since airline deregulation, airlines have cut back on service quality to meet the demand for lower fares, and passengers have agreed to the tradeoff.
- Even as airline passengers become increasingly frustrated – and vocal – about the quality of service, they have no choice but to accept the situation, which leads to a "learned helplessness."
- Learned helplessness has a direct impact on airline business as air travel becomes a joyless affair and passengers interpret ancillary selling as "nickel and diming."
- One study found that after just one negative experience, customers were 20% more likely to switch brands and 25% more likely to complain about the company. By contrast, after just one memorable experience, 19% of delighted customers said they purchased more products/services.
- While carriers are under pressure to offer ever lower ticket prices, they need to recognize the substantial upside of pursuing higher customer satisfaction at each touch point, as well as satisfaction with the overall journey, typically measured in the form of Net Promoter Scores (NPS).
- Empowering passengers to specify what they want, how, and when, benefits both passengers and airlines. Mobile devices can empower passengers while giving airlines access to vast amounts of real-time data, which they can use to meet and anticipate passenger needs, leading to more revenue generation opportunities.
The report notes that ancillary revenue has grown from 10% to 33% of overall airline revenue, which means that airline business models are changing and airlines can no longer afford to accept the cycle of "learned helplessness" that inhibits ancillary selling.
"The empowered passenger has tremendous revenue potential," said Robin Hopper, SVP Product & Marketing, Guestlogix. "Our new report provides deep insights and actionable advice for airlines to empower their passengers, build more loyal customer relationships and increase ancillary revenues at the same time. Now is the time to fulfill the original promise of airline deregulation, so that better consumer choices are realized and airlines thrive as businesses."