7 smart steps for successfully selling third-party ancillary services

A new study, initiated by Amadeus, has highlighted that travel suppliers should think about what it means to become a true retailer offering a comprehensive selection of relevant third-party ancillary services.

Published: 19 Jan 2011

A new study, initiated by Amadeus, has highlighted that travel suppliers should think about what it means to become a true retailer offering a comprehensive selection of relevant third-party ancillary services.

In its study, Cross-Sell Your Way to Profit, which charts the untapped revenue potential of third-party ancillary services to the travel industry, Amadeus says it is only through customer insights — by knowing what drives them, exploring the different channels they use to interact, experimenting with different third-party products and services, and offering something personal — that travel suppliers will be able to reap the rewards of what is yet an untapped and underexplored opportunity.

There is growing recognition that third-party ancillary services will become important revenue contributors for travel suppliers, provided they offer a relevant product mix and make these services available throughout a journey and across channels. The right technology infrastructure is essential to making third-party ancillary services available when and where needed, and travel suppliers will need to develop a story arc to optimise offer management and communications. And while most suppliers anticipate that their own direct channels — especially their websites — will be their most effective sales channels, many believe that by 2015 their most effective sales channel will rely on a technology that hasn’t yet been invented.

Amadeus recommended following “smart steps” that travel suppliers can take to successfully sell third-party ancillary services include:

  • Get to know your customers. There is almost no limit to the number of third-party ancillary services available to travel suppliers. Surveying travellers about what they may be interested in buying is a good way to understand potential demand, but only by offering products will you truly know what your customers want.
  • Track the sale of your ancillary products and services as much as you track the sale of your core products. Don’t just track sales volumes, but how travellers interact with your website and other sales channels. Test products, and test elements such as price, page placement, descriptive text and visual images, and entry and exit points. Track sales of third-party ancillaries to find out which routes and destinations are reaping the greatest total shopping basket value and why. Test, test, test — and test some more, and be willing to make changes based on your findings.
  • Communicate your full offer to your customers. Plugging in third-party content to complement your core offer is just the first step. To maximise the full sales potential, implement and track promotional campaigns for your third-party ancillary products and services as you would for your core offering. Invest in joint marketing programmes with partner providers and explain the benefits of your total offer to your customers..
  • Create a cross-department third-party ancillary services work team. This team will be responsible for setting and implementing enterprise-wide business objectives and revenue goals; identifying, reviewing, and approving potential third-party ancillary service partners; collaborating with relevant departments for sales, fulfillment, and support; coordinating third-party partner promotions and customer marketing and communications; and collaborating with IT for necessary systems and applications.
  • Feed sales data back into your customer data warehouse. It’s important for travel suppliers to know more than just gross sales volume and similar performance metrics. To effectively measure customer value and evolve into better merchants, travel suppliers need to be able to track the third-party ancillary services a customer browses, puts in her “shopping cart,” and actually books or purchases. This will help you gauge customer profitability while simultaneously building a real-time picture of customer interests that can be used to better target product offers and communications.
  • Lead — don’t just follow. There is value in taking a longer-term view of the third-party ancillary services that may be in demand 10 years hence. By looking at broader traveler, technology, and societal trends, it is possible to secure a competitive advantage by identifying the most relevant “extreme” third-party ancillary services to test to determine whether and when any demand is forthcoming, with little downside risk.
  • Keep your eye on the ball. In a volatile environment, social, economic and political trends will continue to shape and reshape your customers’ preferences and behaviors. Ensure that you keep an eye on these trends so as to ensure that your brand, and its products and services, remain relevant.

 
 
 

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