A major key performance indicator for airlines is about how they monetise their web and mobile traffic.
As the chief marketing officer of OpenJaw Technologies, Colin Lewis, states: "Airline.com is the perfect storefront to sell the customer journey."
The "first wallet" generally comprises shopping for a flight (net margin of 5%) plus much higher margin products such as priority boarding and bags, and all three together can result in net revenue of $29 over typical total transaction value of $270 (typical of a short haul airline).
Post this, the mindset of the shopper isn't the same, and that's where airlines can garner incremental revenue via the "second wallet".
So, selling hotel accommodation and car rental, with net margin of 15%-20%, can jointly result in net revenue of $55 or so, eventually targeting more via meals, insurance, transfers, taxis and events for an additional $55, or even selling a package that can result in net revenue over $200 or so over transaction value of $1,000.
Being "smarter"
The attention span of a visitor to a site is under scrutiny, and ecommerce brands can lose visitors in a space of few seconds. An app can get deleted, if a couple of push notifications aren’t deemed worthy.
Emails can get unsubscribed if a recipient ends up receiving offers for a flight already booked, yes it continues to happen. In fact, just another offer or ad wouldn’t work. It is time to be smarter.
But how?
Here is an example. I recently travelled to Shanghai via China Eastern Airlines for a leisure-cum-work trip with my 11-year old daughter and wife. The booking was done via an OTA.
The clever ecommerce players have been mapping the journey of travel shoppers, and categorising them (returning visitors or repeat buyers). It is common to use explicit data to target specific content to specific groups of visitors.
I checked my flight itinerary on the airline's website a couple of times via two devices. The check-in experience was smooth, and I shared my email for boarding passes, too.
The fact that in-flight Wi-Fi was free obviously improved the flying experience. I stayed in three areas – The Bund (to explore downtown); near Shanghai Disneyland Park and Sheshan; and a suburb of Shanghai.
The in-destination expenditure of around $1,500 over a week or so didn’t feature any transaction on the website. Sure, the boarding pass was sent to my mailbox (Gmail) - but, no, China Eastern didn’t ask for my mobile number.
Some of the opportunities missed
Poor on-site engagement – the lack of interest-based content stood out. The days of a generic approach to destination content are over.
A source goes further:
"This is where airlines, despite being very much in the top of the booking funnel, haven’t really capitalized on their position. If you look at Airbnb, what its core competency is and what uts ads/ content show (being local, experiences etc.), it seems there's an effort to be right there in the trip planning as early as possible.
"Airlines can definitely learn about the importance of destination content. By building a connect during the inspiration and planning phase, they can capitalize on it and monetize the same in the later stages of the booking funnel."
So, rather than offering loads of content, build on a layer of intelligence and display destination images, videos etc, as per the trip motive, lifestyle preferences etc.
In my case, the airline could have presented with relevant content options about the destination, and this could have, in fact, paved the way for monetization.
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Furthermore, carriers should monetize their content via all of the available touchpoints, such apps, ads, etc.
The timing counts, too. How about a couple of emails between the booking and the day before travel?
How about offering a deal for two adults and a child to Shanghai Disneyland Park via the free Wi-Fi onboard the flight, or even the same discount being offered by the in-flight crew who helped with in accessing the same channel?
Other than sorting out organisational issues, including embracing of a retailer mindset and preparing the entire organization for the same, some of other areas that need attention are as follows:
Learn through data as much as possible
Finnair is clear that every time passengers interact with the airline, the team ends up learning more about them. The focus is on behavioural profiling, demographics and personal data, as well as historical and preference data.
Also, in terms of profiling, Finnair is progressing from rule-based segmentation to analytics-driven or algorithmic personalisation. The precision of such techniques keeps on improving, too, as the organization moves from a relatively broad set of recommendations to ones that are specifically meant for an individual.
Today, savvy entities run algorithms every time a new interaction occurs to develop individual data profiles. A concerted effort is being made to collect and integrate data from a multitude of channels, including transactional systems within an airline, and spotting patterns of behavior that lead to a transaction.
Machine learning for targeting visitors
Algorithms also come into play when a visitor visits the airline website, paving way for what offer to make, what content to show, etc.
Also, the sort of data that helps in personalising digital experience includes the source of traffic or acquisition (all the details about the visitor, when they arrive on airlines’ digital channels and information about where they came from, and which campaigns are resonating the most) data, anonymous visitor data, profile data as well as real-time interaction with the website.
The clever ecommerce players have been mapping the journey of travel shoppers, and categorising them (returning visitors or repeat buyers). It is common to use explicit data to target specific content to specific groups of visitors.
One can then analyse who has made a particular buy and compare against groups with similar characteristics, who haven't yet made the same purchase.
Machine learning can also help in serving anonymous visitors, by deciding what to serve after the firth click from an anonymous visitor to a site.
The process of serving anonymous passengers starts with some level of contextualisation – once a prospective traveller accesses a website or a mobile app, enters city-pair, dates, type of travel (family, with kids etc.), then algorithms can match them against pre-set customer segments and serve offers accordingly.
Significance of content architecture
Again, Finnair leads the way.
"Think about architecture, build content architecture to support personalisation,” recommends Anni Ahnger, head of ancillary sales, Finnair.
The airline is already displaying targeted content based on segmentation analysis, dynamic content for the upcoming flight (ancillary up-sell) etc.
One platform encompassing all ancillaries
OpenJaw recommends that the diverse set of platforms operated by various suppliers can be a major hurdle.
For instance, in the case of hotels, how to integrate a property management system from a hotel company and sell the same, based on real-time confirmed inventory.
Dynamic offers
irlines need to focus on ensuring whatever is going to be offered is being created dynamically in real time.
This needs to encompass certain business specific factors, such as load factor, inventory left etc. Structures need to be in place to dynamically fine-tune the offer based on the addition of other data points.
Travel-specific retailing
Airlines are also diligently looking at flexible booking flows, considering the fact that shopping for a flight can take multiple sessions.
For instance, some are using digital retailing APIs to ensure shopping sessions and carts would remain open for several months.
This implies that a user can initiate shopping for flights, close their session anytime, and resume where they left off to complete their transaction.