November 2017, Amsterdam
Why less choice is the new value in travel
Giving travellers more choice is often touted as the way to personalisation, customer loyalty and more sales. If only it were so simple, writes Tom Bacon
Choice is the buzzword in travel merchandising. Give travellers choice of where to sit on the plane, whether to check a bag, how much flexibility they have to change their flight, and so on. But, with choice has come considerable new complexity.
Perhaps rather than presenting the menu of choices in a generic way for all – annoying basically everyone with too much choice, with too cumbersome a purchase process, with new levels of anxiety and stress (!) – the presentation of choice needs to be more personalised. This is not personalised pricing; it is personalised choice!
the presentation of choice needs to be more personalised
There are many possible approaches to ‘personalised presentation of choice’. In a sense, it is easier than the conventional vision of personalisation since it doesn’t actually require selection of one best alternative. In fact, choosing one alternative runs counter to best practices in e-merchandising. Presenting one alternative, even if it is targeted to the individual traveller needs, takes control back from the customer. Offering multiple alternatives, on the other hand, gives even more control to the customer than too many choices since it can be both targeted (displaying the ‘right’ alternatives for any individual customer) and transparent (fewer choices, each with clear differences and benefits).
3 ways to display less choice
There are, nevertheless, many different ways to pare down the options and display less ‘choice’.
1. Display of ‘best’ choices: Most likely, the ‘best’ choices for a subset of customers are those combinations most frequently selected by that segment. For most business travellers, an economy fare that includes checked bags may be the ‘best’, or most popular, alternative. But, since some business travellers choose to carry on their bags, a fare that includes carry-on bags, may be another option displayed. And, if 20% of business travelers choose more features, a sell-up fare can also be offered.
2. Display choices with distinct differences: If the most popular choices are close in price ($15 or less), potentially, a more useful display for many customers would replace one of those alternatives with a more distinct set of features priced $30-to-$50, or more, apart. Too narrow a choice may not be deemed much of a real choice by some travelers.
3. Display of alternatives for better framing: Behaviour theory applied to pricing recommends offering useful pricing ‘anchors’. A middle fare can be framed between a lower fare where the fare savings comes with clearly fewer amenities and a much higher fare that may appear too rich – the middle fare is shown to be ‘good value’. Here, personalised ‘choice’ is designed to help the traveller see the value of the middle fare as he contemplates his choice.
Although each of the above presentations could help travellers more easily decide on the travel experience best suited to them, they represent quite different philosophies:
· ‘Best’ choice presumes the e-merchandiser can properly categorise the customer in a sub-group and that the customer will behave similarly to others in the same category.
· A broad range of choices is perhaps most useful when the e-merchandiser can’t properly categorise the customer and determines it must present a greater range of alternatives. It presents the widest range of choice, ensuring that the merchandiser is not over-riding customer control.
· The ‘sell-up’ mode, although it may be characterised as travel supplier-centric rather than customer-centric, can actually produce the highest customer satisfaction as it most clearly conveys relative value across the options. The customer may be manipulated by behavioural science but in the end he may appreciate the presentation and easily make his choice.
Given the new menu of choices in airline product features, both across airlines and within any individual airline, travel sites need to make the selection process easier and less stressful. By making choices for travelers, travelers will see fewer remaining choices and be able to make their travel decisions more easily. There are many ways to reduce choice and display alternatives in more customer-friendly ways. Travel sites will experiment with each as they become more sophisticated in e-merchandising.
Tom Bacon has been in the business for 25 years, as an airline veteran and industry consultant in revenue optimisation. He leads audit teams for airline commercial activities including revenue management, scheduling and fleet planning. Email Tom or visit his website