Active data warehousing trumps the traditional for Travelocity by supporting event-based decisions.
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The sixth largest travel agency in the U.S., Travelocity, saw a way to greatly increase its revenue--but that would only happen if the company could increase the number of queries that its data warehouse handled every day. The firm's existing data warehouse system was reaching the limits of its capacity at about 50,000 queries a day. Travelocity sought a new system with greater scalability and CRM capabilities that would enable it to use an active data warehouse (ADW) marketing effort, driven by customer histories, to offer new promotions.
Traditional data warehousing looks at what happened, why it happened, and what might happen next. Although those are necessary foundations, active data warehousing goes further by using tactical queries to support right-time decisions, typically focused on a narrow target like a specific trip, including hotel, airline, and other accommodations.
The company chose Teradata CRM, Teradata Database V2R5.1, Teradata Tools and Utilities 7.1, and two types of servers, the NCR 5380 server and the NCR 5400 server. The firm now handles increased queries and is more proactive in offering email specials and customized promotions via Travelocity's Web site. The Teradata CRM software was deployed in mid-2001.
Daily load times, based on the same amount of data, decreased over 70 percent. One monthly report went from 11 hours on the old system to 20 minutes on the Teradata data warehouse. The time for complex queries has been cut from half a day to 30 minutes, while booking rates have increased by more than 800 percent. Travelocity now handles 450,000 airline reservations, 7,000 rental car requests, and 15,000 hotel bookings on a typical day, according to Michael Hawkins, Travelocity director of data warehousing and CRM.
The travel agency searches several thousand markets and fares to find specials, then searches for customers who have previously shopped with the travel agency--but who have not already booked travel to those markets-- and then sends those customers a targeted email. ADW aids Travelocity in offering similar deals on its Web site.
"When a customer comes to our Web site, we know who they are, but we need to put that in a historical context," Hawkins says. "We're going to use that information to help ensure that a better outcome occurs." By using a customer's travel history, originating location, and current request, Travelocity can provide customized offers and customized responses once a traveler has booked a portion of a trip. "We know where they've shopped, we know what they've booked--so we use that information to make a compelling offer," Hawkins says.
For example, a person living in San Francisco might receive promotions to fly from there to New York, while someone from Miami might receive occasional offers to fly from Miami to New York. If the Miami traveler, for example, had shown a history of taking flights to the West Coast rather than to New York, promotions would be made tied to Pacific Coast locations, according to Hawkins. And a San Francisco--based customer with a history of taking cruises who's booked a flight to Miami and a hotel there will likely receive some type of cruise promotion along with his reservation confirmations, according to Hawkins.
By using NCR Teradata CRM, Travelocity has been able to:
reduce the time for complex queries from half a day to 30 minutes;
increase customer booking rates more than 800 percent; and
decrease daily load times by over 70 percent.
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