Ever experienced an overbooked flight at an airport? Hearing the offer to get some cash, if you take the later flight or stay overnight? Well, I heavily recommend to read this posting and the thoughts on predictive analytics and customer experience.
Two trends, each racing forward, that have the potential for disastrous collisions:
- The need for truly customer-centric organizations in a fully connected world.
- The use of algorithms, predictive analytics, and big data to optimize everything.
In many cases, these can be synergistic. But some are train wrecks.
I experienced just how badly those two things can clash first-hand this week, when the Westin Cleveland Downtown reneged on my supposedly prepaid reservation at Content Marketing World. … How could that be? They failed to accurately predict the demand from an event that was outside their domain of expertise, a rapidly growing Content Marketing World. …
Here’s how something like that happens. Reserving rooms in a hotel is a ridiculously simple algorithm — …. If typically 5% of your reservations fail to show up, you could theoretically book 105% of your capacity.
That’s a classic insight that predictive analytics can deliver. But it’s also the point where you shift from a deterministic booking algorithm to a probabilistic one.
… You may think it’s worth occasionally sacrificing the happiness of individual customers for that extra revenue from overbooking. But in world of search and social media, there’s a risk that you will trigger outsized negative consequences.
In the world of Social Media and Word-of-Mouth people need to think before to trust analytics only. Or – in this case – take the risk of bad reputation. In other cases the damage could be even much worse.
I am a strong believer, that analytics is able to help, but there still needs to a human brain involved, before making a decision. And I have the strong feeling, that this human brain is taken out of the process more and more often. This makes me concerned.