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FEATURE27 April 2012

Ready for take-off

Paul Kehoe, CEO of Birmingham Airport, wants research to lead him in new directions. He tells Robert Bain why he values fresh thinking.

Paul Kehoe has been working in military and civilian airports for 25 years. Since leaving the RAF he has run Belfast, Luton and Bristol airports and served as a director at Cardiff, Liverpool and Stockholm Skavsta among others. But he says the three years since he became CEO at Birmingham have been, without question, “the toughest time in my career”.

Things were so much easier before recession and upheaval in the aviation industry changed everything. Although the business travel market is holding its own, the more significant leisure market is suffering.

“A lot of people are frightened of [behavioural economics] because it comes with an academic tag rather than being seen as a practical thing”

When Kehoe joined Birmingham Airport in 2008 it “wasn’t performing”, he says. British Airways, which just a few years before had accounted for nearly half of Birmingham’s business, had stopped flying from the city in 2007 when it centralised its UK operations at Heathrow. The airport, Kehoe says, was left “without a Plan B”.

These days nearly ten million passengers a year come through Birmingham Airport, flying to 140 direct destinations. But for an airport serving a metropolitan area of three million people “we should be doing far better than we are”, Kehoe says. Costs are under control, but the big challenge is to spur growth amid grim economic conditions. Change was needed.

The problem is, change hasn’t always been the aviation business’s strong suit. “You don’t do things out of the ordinary because everything’s got to be safe,” he explains. “You encourage safety and security across the whole organisation, and when you say, ‘Let’s do something different,’ people say, ‘Ooh, you can’t do that.’”

That might explain why research suggested that the airport’s image was somewhat lacklustre. Kehoe sums it up as: “You’re not in the north, you’re not in the south, you’re not good and you’re not bad.”

With this in mind, Kehoe deliberately sought out suppliers who were willing to challenge the business and introduce new thinking. The airport got a new name (dropping the ‘international’ tag that had the counterproductive effect of making it sound provincial), a new logo, a new website and a major staff training programme – all of which drew heavily on input from staff themselves.

From the web to the world
It was through work on the airport’s website that Kehoe first became interested in behavioural science – what he calls the soft side of things. He brought in digital agency 3Sixty, which was involved with the IPA’s behavioural economics taskforce and keen to put ideas such as nudge theory into practice (see overleaf).

“One of the things we wanted was to have the website used as a far more interactive tool rather than have people ring the airport, which is what they typically did,” says Kehoe. “We had a switchboard – a call centre effectively – and we wanted to get people out of there and have all the information online.”

The old site was built from the point of view of the airport itself, says Kehoe. The new one starts from the point of view of the customer’s journey, with buttons across the top of the page (using symbols for visitors who don’t speak English) leading to information about flying to and from the airport, getting there, and the various services available.

The site takes into account the influence of how information is presented on how people behave, and eye-tracking research was used to make sure that the layout allowed users to find what they needed. Kehoe is conscious that people don’t visit an airport website to be sold things, and that the site needed to appear calm and clean to encourage feelings of trust and safety. “They’re coming here to get information, and that’s where we start from,” he says. “If we can sell them something, that’s a bonus.” In this sense, he says, it’s “the very opposite of the Ryanair website”, with its brash colours and hard-sell approach.

Having said that, the new site has managed to increase sales conversion rates by placing the options for booking parking, the executive lounge and fast-track service at the right point in the user’s journey. And users say they find it more helpful than the old version.

Following the website’s success Kehoe started to think about how behavioural understanding could be applied to a passenger’s entire journey – starting before they even reach the airport when they book the flight or look up information online, and ending when they get back home.

It’s hard to think of a better test bed for behavioural science than an airport – a world in microcosm, and a place where emotions, social influences, safety concerns and jetlag all feed into the decisions we make (factors which Kehoe believes might explain why passengers interviewed by local news teams last winter “blamed Birmingham Airport for the snow”).

As someone who has spent his life in airports, he was keen to get outsiders involved who could see things from a fresh perspective. “My own airport, I’m very comfortable in,” he says. “But put me in Munich Airport and I’m as stupid as every other passenger. I was going through Munich only a few months back and I could not find my way to the taxi rank. You forget sometimes that not everyone sees what we want them to see.”

“We still do good old-fashioned market research. What we’re trying to do now is take that information, plus experimentation and see if we can get that extra penny per passenger”

Kehoe helped to run a three-day fast-track behavioural economics course for advertising and marketing professionals at Warwick Business School last year, which provided an opportunity to encourage a focus on behavioural science in the marketing community and bring in new thinking. Participants in the course visited the airport to observe behaviour, then devised experiments to test their ideas for encouraging people to spend more money in airport shops, reducing negative perceptions of waiting times in the security area, and improving ticketing processes.

Online surveys were fielded overnight in which different subsets of respondents were presented with a range of hypothetical scenarios at the airport, and their responses compared. Results were available the next day, allowing the teams to come up with recommendations for influencing passengers’ behaviour, which they then presented to Kehoe and his team.

Not everyone in the research world is ready for these sorts of approaches, though. “When I tried to tell people what we were doing at the Market Research Society [at last year’s annual conference] we got a pretty sceptical bunch of people saying, we’ve heard it all before. A lot of people are frightened of [behavioural economics] because it comes with an academic tag rather than being seen as a practical thing.”

Try and try again
Kehoe is happy to experiment with new ideas at the airport to understand behaviour. “We can test things very quickly,” he says. “We’ll typically try something for a few months, find out if it works, and if it doesn’t we can dump it.” Some risk is involved, yes, but one thing is certain: “If you don’t try it, you know things will remain the same.”

Experimenting with how people respond to real situations gets at things that standard research can’t, he believes. “Typically we’d go to a market research company and say, ‘Tell us about what our passengers are buying.’ So we know it’s ABC1, we know they’re buying x and y and they come here 90 minutes before they fly… Good old-fashioned market research – and we still do that. What we’re trying to do now is take that information, plus experimentation and see if we can get that extra penny per passenger.”

One of the biggest influences on behaviour is information provision, Kehoe says. “Passengers crave information all the time and what we’d like to do is give them information as soon as they want it, to allow them to make the right choices as they go on their journey. So we’re regularly experimenting – low-cost experimentation, thank goodness – with things to try and help the passenger.”

For instance, last year the airport introduced a holographic staff member called Lucy in the security area – a moving figure projected on to a screen who greets passengers as they approach the X-ray machines, reminding them to take their jackets off, take laptops out of bags, not to carry liquids through and so on. The aim is to get people through security as quickly and painlessly as possible (in this regard Kehoe envies Disney, which has found a way to get people “to spend two hours in a queue for a 30-second ride and come off and say, that was fantastic”).

As for what impact Lucy the hologram is having, “the jury’s still out,” Kehoe says (partly as she is only one of a number of changes the airport has made to its security area). But the system is certainly operating more efficiently, with queueing times down.

“She’s the cue, she’s the trigger,” he says. “The fact you see her talking is the thing that makes you do something different. It’s difficult to say whether passengers appreciate her or not, but at least they notice her.”

Even if it weren’t for the fact that people hate queueing, this stuff matters commercially. Kehoe reckons every minute a passenger spends in a queue means 3p lost in retail sales. “There’s a value to getting people through quickly,” he says.

Fresh thinking
Playing around with new ideas like these means working with agencies who are “open to change before we are,” says Kehoe. Not everyone is. “We were working with one company and all they gave us was the traditional view of the market. We were paying a premium for their name and the association with them, and actually it wasn’t doing us any good at all. I thought, we’re not getting anything from this, this is a one-way street.”

The best agencies, he believes, are the ones that “take you on a journey”. “We recognise that one of the things people have always said about Birmingham in the past is that it’s not good, it’s not bad, it’s middle of the road. And you don’t want to be average. No one remembers the average kid at school.”


Taking customers on a journey

For Chris Thurling of digital agency 3Sixty, the appeal of behavioural economics is obvious, even if to a certain extent it “just brings a name and a kind of academic rigour to what we were doing anyway”.

“We’re an agency that has always been involved in looking at behaviour,” he says, “because we’re designing things that people interact with, so if we can’t get people to behave the way we want then we’ve probably failed.

“Birmingham is one of three airports we work with, and what we’ve tried to do is develop a customer journey starting not just when they cross the threshold of the airport but from interacting with them online before they fly.

“A lot of this stuff might sound like common sense, but it gives you a framework to make sure you’re not straying off and doing things that go against the ways our 100,000-year-old brains still behave. It grounds you.

“To be honest, the term behavioural economics doesn’t do us a lot of favours with middle-ranking marketing managers who feel it’s a bit academic and pompous. So it has been great to have someone like Paul at the top of the business who says, let’s strip away the academic side and look at the practical applications, and who’s willing to get involved and spearhead it.”

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