Submitted by Skip Henk, EDP, President/CEO of Xplor International
June 23, 2015
Big data has been touted as a means of helping target individual consumers for specific products and services based on a culmination of data points. It can be income, homeownership, where you live, if you have children, and so many other things. There are hundreds of different criteria that can be used in attempt to provide the right message, to the right person, at the right time, using the right media.
It’s a beautiful thing …
On the surface, big data’s virtues seem to present a win-win for marketers as well as the recipients of the barrage of marketing communications we receive each day. After all, attaching targeted demographics reduces the amount of communications being sent, thus reducing costs and increasing response rates. We benefit by receiving fewer aggravating and irrelevant communications and we receive more offers that are more targeted and match an individual’s lifestyle.
Looking at big data in this way makes it a ‘beautiful thing’. A technology and methodology that actually reduces costs to the sender and cuts down on the junk we receive in our email, mailbox and now our cellphones. Sign me up!
BUT beauty may just be in the eyes of the beholder ….
Hypothetically, what if big data had another angle to it? What if it was used to target individuals and as a result certain people were asked to pay more for the same product and/or service than someone else because they ‘could afford to’ (or not)?
I read an article this morning that is implies exactly that.
The airline industry is looking at big data to set ticket prices. In the future it may be possible that four airline passengers, who booked the same flight on the same day at the same time, end up paying four different fares because they ‘are different’. Some would pay more and others less.
If maybe you live in Manhattan, where living costs are normally higher, the airline could assume you can afford to pay more. Maybe you live in a particularly nice zip code. You are a frequent flyer, booking 20-30 trips a year, so you assuredly would be willing to pay more and not give much thought.
According to the article, the amount you may pay for a flight in the future may no longer be just based on when and where you’re flying or when you booked your ticket. Your airfare could be based on who you are, with each fare being theoretically different for everyone.
Should we be angry or surprised? Car insurance rates for years have been based on the value of your car and where you live while coverage usually is driven by ‘how much you have to lose’. But airline tickets?! Seems wrong to me.
So where could this take us? The possibilities are endless, even if they today sound absurd. It is inevitable that if the airline industry goes this way, others will follow.
As I get closer to retirement, maybe I will consider selling my home and buying an old car so I can get lower airfare. It is a strategy…
Just think of the possibilities … Until next time.
The complete article reference in this post can be found on Yahoo!