The Wanamaker organ is the largest wind instrument in the world, with 28,750 pipes and six manuals for the organist to play. John Wanamaker bought the musical monolith (pictured) in 1909 for his Philadelphia department store, now Macy’s Center City. It still sits there to this day, pumping out entertaining recitals as visitors browse Swiss watches and fashionable frocks.
Great retailers like Wannamaker know how to captivate customers. The organ’s music is soothing and entertaining so people stay in the store longer and buy more. Some shoppers might even make a special trip to hear the music and buy a new trinket at the same time. Wanamaker would have appreciated that buying gear while listening to music is highly satisfying to the human brain. It also stimulates the creative brain use for problem solving.
The spiky mechanisms that keep us hooked on music, retailing, social media and our favourite foods and drinks have been appreciated since ancient times. Wanamaker’s organ has been playing for more than a hundred years, covering the internationalisation of addictive brands from Coca-Cola and McDonald’s to platforms like Facebook and Instagram.
In 1957, scientists discovered the chemical responsible – dopamine, a neurotransmitter and hormone that our brains use to reward pleasure. In the great airline rush to become better retailers understanding dopamine will be the key to success. And it’s not a linear booking process. What do they need to learn? Read on to find out…
Hormones and neurotransmitters comprise important messages within the brain and between the brain and the rest of a human body. They ultimately drive our emotional systems and then our behaviours.
When people shop online and eagerly anticipate delivery or grab a chocolate bar as an impulse buy, we are triggering the feel-good dopamine.
When we go to the always-slow ba.com, lufthansa.com and the like we can almost see the coal being shovelled in to the furnace and hear the groaning as the mix of technology stack strain to price an itinerary. A different hormone is released – cortisol – and we feel stressed.
Cortisol release can typically peak within 8.25 seconds, coincidentally the average attention span of an adult doing a passive activity like watching tv or airline ads.
Airlines are going to have to work hard to improve their booking experience if they want to maximise dopamine and minimise cortisol while sending personalised offers.
Most airlines have not started addressing this seriously yet. But across supermarkets, retailers and social media psychology specialists focus on dopamine as a motivator. People want to have new experiences, feel good, get excited and get attention. More dopamine rewards are released when all of these are recognised on social media channels.
As an enabler of cool and exciting travel experiences, airlines should be well placed to be outstanding reward generators across the entire passenger journey. Travellers should get hits of dopamine when they get a great deal with cash or points, eat a tasty meal, look at the clouds, have a successful trip and eventually get home. Yet the reality is sometimes quite different.
Operational issues like delayed or cancelled flights and inoperative seats are part and parcel of complex businesses, their maintenance plans and supply chains. Out of millions of passengers a year some will inevitably be disappointed.
Airlines and tour operators could do better over the parts of their experience where they have complete control. This will not always be easy as the often significant time gap between shopping, booking and flying presents significant challenges.
A good example is cabin upgrades – many people like the idea of flying in a bigger seat or comfy bed but by the time they care about it enough to pay a little more all the discounted seats have been sold. The dopamine released by saving money is all gone by the time the cortisol of sitting in a 16.9” wide seat all the way to San Francisco is released.
There are two things that airlines can do to overcome these challenges to maximise the reward system of travellers across all points of the passenger journey. They can either release rewards earlier or release them later.
Unfortunately existing organisations, systems and processes are not geared to changing the order in which airline products and services are offered. Many buyers take decisions based on when they arrive yet schedules are set based on departure times. Other buyers may not be interested in what may or may not be for lunch when they buy a ticket in advance, but on the day it could be a key factor in whether or not they enjoy the flight.
In applied psychology we could refer to a tendency to buy based on “state of mind”, which is not often correlated with a passenger journey stage. People who are not hungry today may well be hungry when the flight leaves, yet because the brain discounts the future it is not considered when a purchase is made and there is money to be saved.
State of mind is irrational, inconsistent, omni-directional and contextual. Revenue management systems however are linear. Aligning the two will not be easy, but can be achieved by trying to give buyers an idea that their actions today will have positive (rewarding) or negative outcomes.
BA’s old ad showing people going to bed in London and waking up in a far-off city are a good example – they clearly imply that if you do not fly in the carrier’s Club World business class seat you will be tired when you arrive. The key is to focus on the pain of NOT having a certain benefit if airlines want to sell enhanced experiences or services early on.
Sometimes this might be based on fear, like the fear of missing an opportunity because you do not fly to see a customer or are too tired to handle yourself in a meeting, both of which BA addressed in some of their ads from the 90s.
Ongoing retailing in real time any time is a field where airline retailers are trying to draw parallels from distributed reinforcement learning and dopamine-related activities in the brain. Just as reinforcement learning works in algorithms (by layering on improved insights and better predictions), so does dopamine work as people see and feel improvements in their shopping and experiences.
The dopamine release has a multiplier effect and the motivation to solve more interesting pieces of their holiday-related adventures and services they may find rewarding grows. This cannot happen at offer and order management level in one booking path, because of the law of diminishing returns, also when efforts overshoot and drain the customer.
So, we can also break up the offer and order management process to work with 8 seconds to 8 minutes, which is the difference in elapsed time of passive and active processes. It means airlines have to engage with customers based on their state of mind at different moments and more frequently (more about this in another article).
Finding the right balance between personality and reward systems in airline retailing requires work on organisation design. Airlines that can integrate loyalty (repeat business and lifetime value), sales (today’s business) and revenue management (today’s value) will be best placed to do well in the rush for travellers’ dopamine.
Coming up next time, we will look at how airlines can use behavioral economics to avoid retailing that leads to boredom, mental fatigue and lack of interest. Stay tuned!
ricardo DOT pilon AT millavia DOT com (author)
oliver AT ransonpricing DOT come (editor)