United and Big Data

Old Nov 21, 13, 3:35 pm
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United and Big Data

United just boasted that its new website will allow it to leverage big data capabilities in 2014. Forget big data—United can’t even handle basic customer analytics!

Why in the world does United blast out emails to me for every single ticket I purchase informing me of Economy Plus (I’m a 1K) or baggage services (I haven’t checked a bag in probably my last 100 or so flights)?

My clients are health insurers, one of the most conservative industries in the U.S., yet they use the data to draw meaningful conclusions when making business decisions. United doesn’t seem to have a grasp of simple data analysis, how in the world are they going to put “big data” to work?
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Old Nov 21, 13, 4:43 pm
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You obviously have never worked for an airline.

The way the data is collected is a huge problem. The way it is currently collected is done in a way that was never intended to do any meaningful analysis other than for revenue management and accounting. It doesn't allow targeting, it doesn't tie information together across platforms. Hell, the information about TICKETS and the information about BOOKINGS is completely different. This is generally the way it is across the industry and the data suppliers to the industry have not offered adequate to solutions to solve these problems since they are mostly monopolies with no interest in providing better service (ITA and Sabre).

Right now, no system even KNOWS you haven't checked a bag in your last 100 flights. This is actually a technical limitation, not a human limitation from the United employees. What they're saying is that they're working on actually removing those technical limitations so that they can actually do something with this data.

Right now all data analysis has to be done at the aggregate level using single-point data (ie check-in data only or booking data only or ticket data only or segment data only or website visitor level only) It can't be bridged across platforms (ie seeing of customers who changed their flight online, what percent checked a bag? Or are customers who log into their itinerary before the trip more likely to purchase E+ at the airport than those who don't?) Current technical limitations prevent these questions from being answered.
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Old Nov 21, 13, 7:56 pm
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A simple cost analysis. Why spend money to analyze whether an ad applies to a given customer when you can shift that cost by sending the ad to everyone and have the customer spend HIS time to decide whether the ad applies to him.
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Old Nov 21, 13, 8:30 pm
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Originally Posted by burlax View Post
A simple cost analysis. Why spend money to analyze whether an ad applies to a given customer when you can shift that cost by sending the ad to everyone and have the customer spend HIS time to decide whether the ad applies to him.
Umm, because if customers keep receiving a ton of garbage, they delete all my UA emails -- which is very easy to do on a Smartphone if the content isn't interesting in the first screen pre-scroll.

On the other hand, fewer but more targeted e-mails relevant to a customer's actual buying habits or needs might actually be read and acted upon, resulting in greater loyalty / revenue generation for UA.
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Old Nov 21, 13, 8:37 pm
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Originally Posted by ORD_UA1K View Post
Umm, because if customers keep receiving a ton of garbage, they delete all my UA emails -- which is very easy to do on a Smartphone if the content isn't interesting in the first screen pre-scroll.

On the other hand, fewer but more targeted e-mails relevant to a customer's actual buying habits or needs might actually be read and acted upon, resulting in greater loyalty / revenue generation for UA.
You are describing potential ramifications. But as you know, UA primary concern is the cost/savings reflected on the balance sheet, not some intangible ill-will or contempt that do not log in the accounting books. And, besides, you can always blame laggish sales on US gov't.
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Old Nov 21, 13, 8:44 pm
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UA offers to sell me E+ membership (I'm a 1K) and UC 1-time passes (I've a membership) all the time. These are not the behaviors of an entity I'm confident can pull off any sort of "big data" analyses.
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Old Nov 21, 13, 8:44 pm
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The theory is good but the devil is always in the details. Many companies have effectively harnessed big data to target customers. I can certainly see where the value is for an airline. Though I have no faith in UA's IT to pull it off.

I know they are hampered by technical limitations but I've always held the belief that if an airline could tie all the data that is collected on every flight (not just price you paid but actually seat selection, time of purchase, baggage, E+, etc.) they could build a model to dynamically price every single seat on the plane instead of just entire sections as they do now (e.g., buckets would no longer be based just on minimum stays, time purchased, etc., but they would also include seat on the plane or they would be lower and just represent base cost and then they would add on the cost of the seat which would change depending on what seat you selected - less for a middle in the back, more for an aisle in the back, more still for E+ middle, etc.). I'm sure there are a million reasons that couldn't work or would be quite difficult, but there are definitely many ways I can think of where an airline harnessing big data could help them significantly.
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Old Nov 21, 13, 8:48 pm
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CO led the major US airlines in this space for quite some time before the merger. I've seen a lot of details on what they were doing at the time, here's a publicly available document that covers some of it: http://www.mindtree.com/sites/defaul...aper_Final.pdf

Also this: http://gigaom.com/2013/03/27/why-app...uve-ever-seen/

At some point, Continental Airlines decided it wanted to keep its customers happy and began assessing them by lifetime value (which, it turns out, is often inversely related to frequent-flyer status) and began making alternative arrangements for them as soon as the airline realized flights would be delayed.
And this:http://www.slideshare.net/lsakoda/ca...data-analytics

To keep financial performance aloft at Continental Airlines (now a unit of United Continental Holdings), real-time analytics track empty seats prior to takeoff to put as many travelers on board as possible. At any time, Continental executives can see an accurate account of revenue-generating passengers on its flights.But real-time data helps with more than in-flight operations. It is now critical in helping the airline manage seat availability for its 2,000 daily flights, each of which can have as many as 30different seating classifications. In the past, says Anne Marie Reynolds, director of the airline’s data warehouse, it was difficult to manage the complexity of the various pricing options—updates were done nightly in a batch process. “The science behind it hasn’t changed all that dramatically but now we are able to respond within a few minutes rather than waiting until the next morning.” That alone, she says, has meant millions in increased revenues.

Clearly they lost some of this skillset during the merger
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Old Nov 21, 13, 8:52 pm
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Originally Posted by star_world View Post
CO led the major US airlines in this space for quite some time before the merger. I've seen a lot of details on what they were doing at the time, here's a publicly available document that covers some of it: http://www.mindtree.com/sites/defaul...aper_Final.pdf

Also this: http://gigaom.com/2013/03/27/why-app...uve-ever-seen/



And this:http://www.slideshare.net/lsakoda/ca...data-analytics




Clearly they lost some of this skillset during the merger
Was that white paper actually implemented or was it simply a graphomania product? Because it looks like something MBAs routinely prepare to 'impress' investors.
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Old Nov 21, 13, 8:55 pm
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Originally Posted by burlax View Post
Was that white paper actually implemented or was it simply a graphomania product? Because it looks like something MBAs routinely prepare to 'impress' investors.
I know for a fact that they had a fairly substantial team doing everything mentioned in the second and third quotes above, plus significantly more.
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Old Nov 21, 13, 8:56 pm
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Originally Posted by burlax View Post
You are describing potential ramifications. But as you know, UA primary concern is the cost/savings reflected on the balance sheet, not some intangible ill-will or contempt that do not log in the accounting books. And, besides, you can always blame laggish sales on US gov't.
Lost revenue isn't intangible. If a customer deletes UA e-mails thinking they're useless, they might miss the note about a $400 F-class upgrade offer that analytics suggest s/he may actually be inclined to purchase. If your premise is true, then Google would have no revenue or reason to exist.
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Old Nov 21, 13, 9:02 pm
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Originally Posted by ORD_UA1K View Post
Lost revenue isn't intangible. If a customer deletes UA e-mails thinking they're useless, they might miss the note about a $400 F-class upgrade offer that analytics suggest s/he may actually be inclined to purchase. If your premise is true, then Google would have no revenue or reason to exist.
Lost revenue isn't intangible, but it doesn't happen until later and it cannot be attributed to any given management decision. And you can always blame declining sales on something else - Hurricane Katrina, hostile US govenrment, bad economic climate - you name it. Whereas the cost incurred by paying data analysts is very tangible and attributable to concrete decision by concrete people.
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Old Nov 21, 13, 9:34 pm
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i sell big data solutions and work with some airlines to architect these kinds of solutions for new innovative use cases. some airlines have actually got some really cool things going and are getting significant returns on it.

i can tell you across the board all the airlines i know of have IT architectures that suffer from decades of band aid solutions. i can't think of any exceptions.

if united is working with real time big data, i haven't heard of it. and the vendor community for this isn't all that big. but i didn't expect UA to be a thought leader in this category. or any other category now that i think about it.
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