Why X-Data is Key to Breaking Through in the Experience Economy

Simply having a customer experience management program is not a competitive advantage.

Today, most organisations are invested in CX in some way. For example, in a recent study Qualtrics conducted with Bain, 97 per cent of executives said improving customer experience is very important to achieving or maintaining a competitive advantage. Ninety-one per cent said improving customer experience is a top 3 priority for their company.

Ultimately, CX management is no longer a new frontier and there’s less room at the top for a brand to make a difference.

This means organisations have to work harder than ever before to breakthrough. Businesses who recognise every customer touch point is an opportunity to deliver breakthrough experiences will be successful in the experience economy.

Cathay Pacific is a great example of a brand adopting this mindset, and as part of its efforts to take the travel experience to new heights it leaves no stone unturned. 

Qualtrics recently sat down with Walter Li, Head of Insights at Cathay Pacific, to discuss how the airline is using data to compete against airlines with bigger budgets, boost customer loyalty, and grow market share.

Check out the discussion below, and to learn more about Cathay Pacific’s CX transformation visit the X4 Singapore 2019 Content Hub to watch Walter Li’s presentation. There you’ll also find insights into the work brands like Fuji Xerox, JAPFA, and GOJEK are doing to design and deliver great experiences.

How does Cathay Pacific use CX to compete with bigger companies?

To use a sporting analogy, we’re like the San Antonio Spurs or the Oakland A’s. We’re a small team with a small budget. We can’t afford big superstars, but what we can do is really figure out the right things to focus on. It’s like “Moneyball” —  you’re buying runs, not stars.

For us, the customer experience is where we’re going to excel. It’s an area where, if you spend wisely, the benefits you reap go up exponentially.  We’re also confident going down this path because we’ve always been known for providing excellent service.

In the past, we’ve done a good job delivering really good service, but we haven’t really excelled in using both X- and O-data to assist our decision making. We needed to modernise, and that meant creating an Insights Team that understands the importance of the O-data, while also bringing the X-data component to the business that we haven’t had in the past.

How does Cathay Pacific act upon X and O Data?

One example happened early on in our time using Qualtrics. We brought hot meals back on our Hong Kong-Taipei routes. This is only a 1.5 hour route, and while we had stopped offering hot food on that route, most of our competitors were still doing it. It may seem like a no-brainer to match their propositions, but we learned that delighting our customers was more than simply offering a hot meal onboard. We needed to offer the right meal and all the services alongside it that customers wanted and, using Qualtrics, we could gather those insights very quickly to create a proposition that stood out from our competitors, rather than simply mimicking them.

Why does loyalty matter in great CX?

The way you define loyalty in an organisation is key, because that influences what you’ll focus on and the results you track. Is it just making sure that people fly the same number of flights year after year and give you the same share of wallet? Or do you want to make them advocates for your brand? Are people choosing you because they’re loyal, or because they don’t have many choices?

How you define loyalty affects everything from the way you design your loyalty program to the way you measure and track its effectiveness.

What are some of Cathay Pacific’s innovative approaches to CX?

We run very rigorous testing on our in-flight products — that’s a key customer touchpoint for us. Take our business class products on our B777 fleet, which flies long-haul to the US and a lot of European destinations, as an example. Some airlines will buy a ready-made design from a seat manufacturer and maybe customise the colour to match their branding and make some small changes here and there — but by and large the seat remains the same from one carrier to the next. We wanted to offer a different experience on Cathay, so we did a lot of customisation based on what we know our business class customers want from the experience.

One of those customisations is a layer of material, added to the back panel of the seat that reduces noise. It means our business class passengers can relax better, because they’re more protected from the noise around them when they’re lounging or sleeping on the flight.

Another change is the airbag that’s traditionally attached to the seatbelt. On our A350 fleet, that’s no longer there, and instead, it’s built into the panel of the seat in front of you. It’s a small thing that most customers won’t notice, but it removes the discomfort associated with those airbags and makes a big difference to the experience for those passengers.

What role do employees play in a great CX?

Our most loyal customers always say they come back to us, time and time again, because of the service they get from our employees, from the ground staff to the cabin crew and the call center teams. Within minutes of boarding a flight, customers can already tell if they have a magnificent cabin crew on board who are going to deliver the best service they’ll ever get. 

Those sorts of insights from our customers tell us just how important it is to have the best employees. It can be challenging in an industry where margins are slim, but it’s really important for us when we’re in such a competitive landscape to invest in both our service and our people.

How does Qualtrics help Cathay Pacific?

Qualtrics enables us to deliver real-time customer feedback to uncover insights that ultimately improve the experience we deliver to our customers. From being able to close the loop with individual customers to analysing large volumes of X- and O-data to identify improvements we can make to the experience across the board, it helps us put customers at the heart of our decision making.

We use Qualtrics for our post-flight surveys and for pulse checks in our membership program. The tool is quite flexible, so we’ve started testing new ways to deploy it, pushing different trackers at different points in the customer journey. If we understand how people react to these trackers and pulse checks, we can then design the right kind of service recovery module for each moment.