Ancillary marketing is an enormous opportunity for airlines to boost revenue and generate more value from each and every customer. Take Ryanair, one of the most innovative airlines in the world when it comes to ancillary sales. The Irish airline makes almost 27% of its revenue selling ticket upgrades, travel insurance, food and beverages, duty-free products, lottery tickets and much more.
To increase their sales figures, leading airlines like Ryanair have become incredibly adept at ancillary marketing, finding unique ways to attract customers and convince them to spend more money on products and services. What can other airlines learn from them to improve their own ancillary revenues?
Our airline clients use ConztanzOne, our passenger data platform, to better know their passengers and improve sales and ancillary marketing campaigns. It does this in two ways:
Let’s look at how airlines can enhance their ancillary revenues in 2020 using these two methods.
One of the keys to success in ancillary marketing is personalization; making sure that the products and offers which you put before the customer are truly relevant.
Think about how companies like Amazon do this: shop for any product and you’ll see messages telling you that “People who purchased Product X also purchased product Y.” Not only is this useful for customers, but Amazon cleverly leverages their sales database and search metrics to move customers further along the sales funnel.
10 years ago people might have searched for a product-type on Google, reviewed a couple of retailers, then maybe searched Amazon before making the purchase- just to see if they were getting the best price.
Today, by contrast, B2C marketers see Amazon Pay Per Click PPC campaigns as delivering a greater ROI than Google PPC - because when people search Amazon they want to buy now, whereas Google searches are more: “I’m thinking about this product for the future”.
How can you do this?
So how can airlines move customers up the travel sales funnel with their ancillary marketing? One solution is to aim to become a one-stop-shop for people who are planning a journey. If airlines can partner with other airlines (even those they compete with), other transport operators, plus parking, car hire and hotel companies, they can deliver a multimodal, ‘whole journey’ package.
A recent report on airline ancillary marketing by Idea Works Company describes how Asian LCC Flyscoot.com boosted revenue in this way: “FlyScoot.com now offers destinations and flights beyond the limits of its own network. Consumers are more likely to visit FlyScoot.com first before other major competitors such as AirAsia.”
At first, this approach to ancillary marketing seems almost counterproductive - Flyscoot is potentially sending passengers to their competitors. However, in the long run, they make themselves the trusted, ‘go-to’ place for passengers to purchase tickets. And that means those passengers are far more likely to buy Flyscoot tickets overall.
Amazon invests heavily in re-targeting, so when you have looked at a product on Amazon you’ll find that an advert for it ‘follows you around’ the Internet. Many ad platforms offer a ‘re-targeting pixel’, which enables this way of reminding consumers about your offer (to learn more, read this excellent re-targeting guide from HubSpot).
Referring again to Idea Works Company’s ancillary marketing report, US firm SalesCycle helped Virgin Atlantic to achieve an impressive 59% open rate on re-marketing emails, as part of a re-targeting initiative which is estimated to have raised the airline’s online revenue by 5%.
SalesCycle interviewed 1,000 travel consumers and found the following reasons why people leave a website:
SalesCycle’s statistics indicated that 87% of people would consider coming back to the site at a later date. But of course, once people have left a site, they can soon forget about it or stumble on a competitor who provided a more compelling offer. For the 39% of ‘just looking’, 37% of ‘want to compare prices’, and 21% of ‘need social proof’ site visitors, re-targeting would stand a good chance of bringing them back to your site.
How can you do this?
As with offering the ‘whole journey’ experience in our first point above, ‘re-targeting’ and ‘re-marketing’ are very much data-enabled initiatives, and the job of ConztanzONE is to liberate your data, in order to enable such strategies.
So many airlines’ data is spread across multiple silos, making it very difficult to create a ‘joined-up’ picture of the customer. That makes it near impossible to do serious, relevant re-targeting. And this is where ConztanzONE helps, it cleans up all your data and makes it so much more usable for the purposes of retargeting.
Travel market specialists Tnooz report that 61% of airline customers are open to buying add-ons, but only 37% say they are relevant - and that only 12% of airlines actually do a good job when it comes to customizing offers.
The good news, however, is that it’s never been easier for airlines to take advantage of those opportunities than today. As long as airlines manage their internal data, partner data and website/app API interfaces efficiently, it becomes a lot easier to move customers along the marketing funnel and provide more relevant retargeting.
And that’s where the ConztanzONE solution comes in. Created specifically for the airline and travel industry, ConztanzONE turns islands of data into a continent of instantly available market intelligence. It links all your siloed data into a cohesive whole; provides real-time links to partner data; and drives the websites, apps, and data-processes that will enable your airline to improve ancillary marketing and move customers up the sales funnel.
To take your ancillary marketing to the next level, contact Conztanz today to learn how our solutions help you.