Dynamic Offer - Product Determination

February 27, 2020

Dynamic offer creation presents the opportunity to increase high value revenue, increase conversion and optimise the customer lifetime value. Dynamic offers require both dynamic product determination and dynamic price determination. Increasingly, my discussions around dynamic offers navigate to the topics of continuous pricing, the latest Artificial Intelligence (AI) or Machine Learning (ML) algorithm and the inevitable conversation around how revenue management will work with this dynamically created offer. They are all exciting topics, but what rarely gets discussed is product determination. Is this because we don’t fully understand the value it brings? Or because it lacks the innovative and technical glamour of price determination? Maybe a little of both.  With this as a backdrop, I am going to discuss product determination and, through the build out of the Datalex Dynamic Offer product, some of the considerations we went through in product determination.


Product Content

Do not restrict yourself when sourcing content. Be independent. As an airline, you need the capability to access variable products from multiple sources. The greatest limitation of product determination is restricting your content suppliers to a single source. It is an absolute imperative that you ensure your dynamic offer product has been architected in a content agnostic way where the number or type of content providers you source from is not restricted. Access to multiple content providers is the only way you can implement a dynamic product determination capability.

At Datalex, we have implemented a number of projects that source air content from multiple Passenger Service Systems, our own pricing engine, and a dynamically created source. The value of this is in the completeness of the data set. The more restricted the data set, the less likely you are to take value from the next step which is contextualising the offer. What is also equally important is that all non-air content, whether through ATPCO optional services, our product catalogue, or through the import of an external product catalogue is returned within the original offer, not as an after-thought. Without this, dynamic bundling and true product determination is impeded. 

Once you have sourced from multiple content providers, you need an orchestration layer that can de-duplicate, sort and optimise before presenting the offer to the customer.

Product Contextualisation

Now that you have sourced the product content, you need the ability to contextualise the offer. For this, we needed to develop a greater understanding between macro-segmentation, micro-segmentation and personalisation. The first thing we learned was that these are not to be treated as a maturity model. Each of these categories offers discrete business value and can coexist with the others. Your dynamic offer product needs to be capable of distinguishing and managing these.

  • Macro-segmentation – This is broad market classification where the variables used are wider in scope. A typical use case we have implemented is where corporate users want to ensure their staff have lounge access and priority boarding included in their bundle.
  • Micro-segmentation – This is the ability to understand your segments on a more finely-tuned level. If you take the example above, we have corporate users who want to ensure their staff hierarchy is taken into consideration before the products to offer them are determined in their dynamic bundle.
  • Personalisation – This is the ability to understand historical behaviour, propensity to buy and customer lifetime value in order to determine the products that best suit this individual. The ability to pass and receive signals to and from marketing, analytics and data warehouse systems is what allows products to be determined at an individual level.


Product Offering

Finally, you need to ensure you have the capability to offer your contextualised products on the right channel. What you see throughout the industry is the misuse of the word omni-channel. What most people mean when using this word is multi-channel. This is having the ability to offer products on multiple channels but not being able to transition mid-flow between channels. That would be true omni-channel. Omni-channel is a digital necessity for most users. In order to offer true omni-channel capability, your shopping cart should be able to be modified, deleted and shared across any device or channel seamlessly.

The next time you look to discuss continuous pricing, the latest AI or ML algorithm I recommend you focus on your product determination strategy and use the tactics above as a sophisticated method to differentiate your offering.


To learn more about Datalex Dynamic Offers product click here


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