Ai Editorial: The game of “air ticket plus trip essentials” – are you predicting it right?

Ai Editorial: How astutely are you predicting what, when and where to offer a hotel room or car rental as a user is about to book a seat on a plane? Ritesh Gupta finds out

Airlines, just like other travel e-commerce sites, are vulnerable to losing out on a visitor in a matter of few seconds. It is imperative to be spot on with the sort of work that happens the moment a user lands on a site, or even when a traveller opens an email.  

Airlines need to ensure they maximize any opportunity to cross-sell in order to step up the average order value. A key here is to embrace a dynamic form of merchandising and marketing, fundamentally based on data-driven decision-making. 

There needs to be a mechanism that would predict what a customer is likely to buy.

“What to offer each individual customer, when, and through which channel is the new merchandising paradigm. What this means is that unique and personalized offers for individual customers based on their attributes,” says Boxever’s VP – Sales, Ultan O'Brien. There is seemingly an extreme polarization – if you get it right, then customers can buy a lot more; if your offer goes wrong, then there is cart abandonment and dismay is what a customer ends up with. “People not only buy more products when offered ones that are more relevant to them, but they are also more loyal to brands that seem to understand them and can accurately predict what products to offer them,” says O Brien.

Trip essentials – how to offer them aptly?

Making the right offer at the right time is a challenge for most, says Justin Steele, Senior Director of Innovation, Switchfly.

Predicting what would click is the key here. Here we explore how it matters:

For most airlines, as Steele says, hotel ancillaries are best sold post purchase, or after the customer has completed his or her airline ticket purchase. One great method is through a simple `pre-trip’ email. Do not just send an email with a link saying `need a hotel?’ asking the user to click a link, enter their specific dates, and conduct a search. Users can do this on their own. Instead, try to predict the top 2-3 hotels that customer is likely to purchase.

Steele further explains: Airlines can use previous customer information such as purchase history (star rating, chain affiliation), demographics, or even member tier status to begin the targeting process. Airlines can also use other factors such as length of stay, days of the week travelling, number of travellers in the party and other factors. The goal is derive the top 2-3 hotels that this customer is most likely to purchase in their destination. Then, display these 2-3 hotels directly in the email with live pricing allowing the customer to see results. Use minimal content to surround the hotel property. Large pictures with hotel name, star rating, and total price are the only 4 required pieces.

Timing is the next key. Airlines need to learn the travel journey and purchase habits of their customers. “Airlines should be able to say, “customers who book their flight 6 months in advance, and that are traveling with a family are most likely to begin their hotel search / booking process 3 months in advance” and airlines can target their email for the exact date the customer is about to think about a hotel purchase,” he says.

As for ensuring the path of booking is not riddled with unnecessary products or content, Steele says the focus should be on well-timed, planned touch points. “A certain subset of ancillaries belong in-path, varying by factors such as airline, route and business model. These ancillaries should be limited to items that a customer requires in order to complete a ticket booking,” he says. An example of this is that many customers will not book a long haul flight unless they can pick their seat. “Other ancillaries need to be sprinkled throughout non-intrusive touch points – we call these casual checkpoints. Some additional casual checkpoints include the confirmation page, confirmation emails, pre-trip emails, check in time and pre-boarding,” he says.  “Understanding the relevance of the offer and the timing of the offer in the customers purchased decision process can help airlines determine which products to market, when to market and where to market. Then tweak and test. This is definitely not a ‘set it and forget it process.’ The process needs to continue to be refined by the airline.”

Old approach

O'Brien says the existing descriptive and diagnostic analytics landscape has traditionally been a very lean-back approach to merchandising ancillaries. A typical example might be to create an email segment from an operational CRM by querying all family bookings who purchased previous (the same time last year), and who added a specific ancillary (also bought a hotel, car or insurance package). “It’s using historical data points to inform a contact strategy with the customer that is delivering increasingly limited success – mainly because it is generally based on stale information and is part of a generic grouped campaign rather than personalized to an individual,” he says.

He adds, “The result is a form of scatter gun marketing communication – with a kind of “throw mud at the wall and see what sticks approach” – which is batched rather than real-time (so tends to be stale and out of date) retrospective in its nature and based on historical information (thus missing any intermediate interactions the customer has with the brand that can indicate an intent to spend, a buying persona, a context and the relevant product(s) of interest).

The New World

By using a data-first merchandising platform - which captures all interactions as well as shopping and buying behaviour across all channels – airlines can commence building a unique contact strategy for each visitor, traveller or customer.

“The use of predictive analytics to drive offers in practical terms means you stop asking the question “What products do I need to sell” and start asking “When will a specific customer next make a purchase?" and "How best can we communicate to them to make it happen?”, says O Brien.

According to him, predictive marketing is really about understanding who the customer is, what products they might be interested in based on their behaviour as well as their transaction history – and then marketing contextual relevant personalized offers in an automated way, orchestrating this across all customer touch points to achieve what is referred to as customer-centric marketing. So, when a customer has not purchased a product it’s then about inspiring them or pre-targeting them with appropriate travel experience. When they are however in the purchasing funnel it’s about offering the optimal assembled product set (or dynamic package) to convert them, and re-targeting them with the next best ancillary to widen their traditional travel basket.

Whatever airlines strive to offer needs to be spot on. Anticipating the next product a customer will want to purchase right before the customer does, then making it available to the customer through the proper channel is a top priority right now.