When Personalization and Promotions Go Wrong, and How to Repair Customer Experience
Data-powered personalization is effective when it works, and disastrous when it doesn’t, as we learned This Week in Fraud Trends, February 21, 2020.
The travel and hospitality industries feel the competing pressures of customer experience and risk management perhaps more acutely than any other. Where else is a high-quality, friction-free experience more central to the success of a business model? Virtually by definition, customers have to actually actively enjoy their engagement with businesses in this space — neutral is not enough.
To succeed, organizations in the travel and hospitality industries try to collect a great deal of information about their customers, with the premise being that the more personal data they have, the better able they are to serve their customers in personalized ways. When it works, customers love it. Customers love a seamless travel experience, and put their trust in — and return their business to — those companies, platforms, and services that deliver on their hospitality promises.
Conversely, when problems happen, negative reactions can be swift and decisive. As the saying goes, brand reputation takes a lifetime to build, and but a moment to destroy. If there’s one thing a business in the travel and hospitality sectors doesn’t need, it’s a data breach. Suddenly, those efforts to acquire personal data, instead of fueling increased personalization and better experiences, becomes the cause of a major financial and reputational disaster.
We learned this week about a major data breach in the travel and hospitality sector:
“According to our analysis, the MGM data dump that was shared today contains personal details for 10,683,188 former hotel guests. Included in the leaked files are personal details such as full names, home addresses, phone numbers, emails, and dates of birth.”
More than 10 million impacted guests. That’s remarkable. However, as the ZDNet article points out, “the size and the severity of this MGM Resorts security incident pale in comparison to the massive data breach that impacted Marriott hotels in 2017.”
Regarding that Marriott breach, the company itself has maintained that the financial and reputational impacts were minor. However, this kind of damage has a long tail, and more issues have continued to emerge for the company, including a class action lawsuits, and a massive GDPR-related fine. According to additional reporting by ZDNet, the company’s final costs could run into the billions.
While hacks and breaches of this kind are perhaps the most dramatic examples of the security perils faced by the travel and hospitality industries, there are many other concerns as well. Promotion abuse, for example. If you weren’t familiar with promotion abuse before this week, a recent article from Vice may have introduced you to the term, by way of a somewhat humorous tale:
Stolen Happy Meals aside, promotion abuse is actually a very serious problem, and it’s something DataVisor knows about firsthand, having worked with clients to defeat these kinds of attacks. DataVisor, in fact, published a new case study this week addressing this very topic:
Our client, in this case, is a global digital travel platform with over 15 million monthly active users. The client supports over 40 languages and has a global presence in more than 200 countries and territories. As we detail in the case study, fraudsters were taking advantage of promo codes, discounts, and bonuses to make massive numbers of fraudulent hotel reservations, later reselling these reservations at inflated prices to make illicit profits. This massive-scale promotion abuse was not only causing significant financial losses for the client, but it was also slowing down their market growth, and their under-performing promotion campaigns were holding back customer acquisition and retention. Fortunately, in choosing to work with DataVisor, they were able to successfully address the issues, and today, our client is enjoying a 40% increase in detection rates, with savings of more than $20M.
Throughout this week’s post, we’ve discussed challenges associated with acquiring data in the service of personalization. We saw a tweet this week that did a nice job highlighting this topic, so we’ve chosen it as our …
Tweet of the Week!
And on that note, we invite you to join us next week, for another edition of This Week in Fraud Trends!
