What companies can learn from the Orbitz Mac pricing ‘scandal’

Last week, The Wall Street Journal reported that Orbitz is recommending higher priced hotels to Mac users than to PC users. Apple fans immediately took to Twitter with their outrage and the media was ablaze with follow-up articles condemning Orbitz’s discrimination against Mac users.

Well here’s one more article. However, this article is not going to warn businesses of the ills of treating customers differently, as you may have assumed from the title. No, this article celebrates it.

In defense of the travel site, Orbitz’s PR firm released a statement highlighting what the company considered an overlooked fact that Orbitz does not show Mac and PC users the same hotel at different prices. The company blamed The Wall Street Journal for burying this fact in the middle of the article, ultimately misleading many readers. However, people seemed to understand this was the case from the very beginning, and yet were still outraged that Orbitz is even recommending pricier hotels to Mac users. Here’s why Orbitz is actually doing Mac users a favor.

While it’s true that not all Mac users prefer nicer hotels, it’s very important to note that Orbitz found Mac users were in fact spending 30% more a night on hotels and were 40% more likely to book four- or five- star hotels back in October, before they implemented this strategy. That means many Mac users are indeed more interested in and looking for pricier hotels.

The point is, Orbitz identified that Mac users had this pre-existing preference, and then simply made it easier for them to find what they were looking for. Don’t we all prefer a more personalized, relevant shopping experience?

If you’re a regular at my watch store and I know you have a preference for Rolexes, I will show you Rolexes when you walk in the door. For another customer, I may begin by showcasing our selection of Movado watches. Both customers are free to view all of the watches in the store and will be charged the same prices, yet I’ve used the knowledge I have of each customer to recommend the products I believe they will be most interested in. This is essentially what Orbitz is doing. This is personalization.

Still not convinced? Consider this statistic: 54% of consumers are ready to “break up” with brands due to “the barrage of irrelevant messages, low-value rewards, and impersonal engagements”, according to research by CMO Council. And yet, 47% of marketers do not take any action based on consumer preferences. That means simply paying attention to your customers and delivering a tailored experience nearly puts you ahead of the pack, and doing it well makes you exceptional. To that end, I say Bravo, Orbitz.

The Journal article was focused on only one factor — type of computer — that influences Orbitz’s recommendations to users. However, as any data scientist will tell you, using only one piece of data about a visitor is insufficient. Companies need to take a more holistic approach to personalization. Orbitz has said they use other information to determine results, such as your past purchases and location.

So, for all you Mac users who are on a budget, Orbitz hasn’t forgotten you. If you are a Mac user, but have previously always chosen budget hotels, Orbitz probably won’t recommend the higher end hotels to you, though it may do so for other Mac users. Each customer will show indications of her preferences, but it is up to the company to capture those preferences and deliver the appropriate experience.

And that’s personalization. The more a company knows about its customers, the better experience it can provide. The companies, like Orbitz, that are recognizing this early on will be the ones to reap the rewards.

Elie Khoury is Co-Founder and CEO of Woopra, a customer-centric web analytics service that enables companies to target and personalize web experiences.


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