News | Distribution | Technology | OnlinePositive airline outlook ups the need for a better ancillary strategyThis article was originally published onBy Viewpoints | June 25, 2015 Travel for business and leisure is on the rise and a combination of factors are positively affecting airline industry profits.NB: This is an analysis by Bob Dufour, president at Fusion.With fewer airlines around due to mergers and acquisitions, the industry is benefiting from less competition. Fuel costs are lower and the strengthening of the jobs market is also a help.First quarter earnings of major airline companies indicate that 2015 will continue to be a year of expansion, especially in comparison to Q1 2014 earnings.A report by the US Federal Aviation Administration predicts 50% growth over the next twenty years in US airline passengers. According to this report, 1.14 billion passengers are expected to fly via U.S. carriers by 2035.Furthermore, the International Air Transport Association (IATA) predicts global profit will increase to $29 billion in 2015—almost double 2014's return.This growth provides tremendous opportunities to increase profit through ancillary revenue.But despite industry-wide acknowledgement of the proven revenue-generating performance of ancillary product sales, many companies aren’t taking a holistic approach to either developing a comprehensive strategy or allocating resources to these programs.Fusion partnered with Forrester Consulting on a research study about the current ancillary sales practices of more than 100 airline companies based in the US and the UK.The study identified that 78% of respondents found that their ancillary product sales goals were met or exceeded, even in cases where the airline had no concise or cohesive strategy in place.With more resources and a concerted effort to sell ancillary products in a smarter way, ancillary sales programs could see even greater results.When defining the customer experience, can you provide them with options when it’s most relevant to them? For instance, offer ground transportation during the initial transaction of a business customer who’s accessing your site from a desktop or laptop.Or offer an upgrade when the consumer is checking in at the kiosk and can better envision themselves relaxing on their flight.The Ancillary Revenue Report 2015 suggests that airlines need to find the right balance of technology and human interaction when considering physical and in-cabin offerings. Research suggests that the visibility of in-flight offerings and retail activities further entice consumers to purchase.In many cases, ancillaries are no longer on a dedicated page, making them easier for consumers to miss and harder for companies to identify natural placement.Don’t opt for one size fits all, tailor the design and purchase path for each device. Providing a customized selection of ancillary products in a visually pleasing display will improve sales and margins.In my previous post, I defined three steps to ancillary revenue excellence.This means approaching ancillary sales with your customers in mind. Enlist a partner to track purchasing habits, monitor big data trends and incorporate psychographic information about your customers and to present optimized offerings.Providing an experience with tailored choices demands the effective design and implementation of a testing strategy.Develop a robust incremental testing plan that allows you to test consumer reaction to the presentation of offerings, down to the impact of a single word.Test small changes then put real-time results to work through seamless implementation, serving only the most effective options to consumers for increasing the likelihood of completed purchases.The first step in the right direction is identifying a partner with expertise in harnessing big data trends, proprietary trends and customer data, as well as technical execution.It’s important to note that partnership is more than a fulfillment of requests. Partnership is a commitment to achieving shared success through consistent communication and strategic guidance.The ultimate goal is to effectively create increased opportunities for repeat business, presenting desirable solutions for customers and driving consistent performance through this growing revenue stream.NB: This is an analysis by Bob Dufour, president at Fusion. It appears here as part of Tnooz's sponsored content initiative.