Airlines are increasingly finding creative, new ways to upsell at just the right time and are taking a closer look at a range of different factors. Tom Bacon reports
Earlier this year, jetBlue advised that a unique new merchandising strategy was driving more sales. The airline reported that customers’ response rate on flight promotions to warm destinations last winter was much higher when the temperature at the customer’s city fell below a certain level.
Bringing such external factors (temperature) into travel marketing is a new opportunity for airlines. We have often talked about ‘personalisation’ but have generally focused on how an individual responds to different promotions. Questions that arise include: Does he normally check a bag? Does he frequently search for travel to Las Vegas? Is he part of the loyalty programme?
On this score, jetBlue is noting that various external factors can impact an individual’s response.
…potentially more subtle externalities offer another opportunity.
We all know how external events drive demand – where the World Cup is played, what is the Hollywood Bowl concert schedule this summer. As jetBlue’s success demonstrates, potentially more subtle externalities offer another opportunity. These can include everything from weather (temperature, as jetBlue found, or precipitation or snowfall – both at the customer’s location and at a target destination) to time-of-day or day-of-week, news or media coverage, hotel, car rental or event prices, and other factors.
Effective merchandising requires the right offer at the right time. This is often framed on a calendar basis – travellers begin thinking about Christmas travel in October. But jetBlue suggests that certain environmental data or other external data can also impact ‘the right time’ for a marketing campaign.
5 potential opportunities
1. Weather. JetBlue found that colder temperatures, presumably in Boston and New York where most of their customers live, drove higher response to warm weather (Florida, Caribbean) promotions. Consecutive days of rain may have a similar impact, increasing the appeal of a sunny destination. Likewise, snowfall in the Rockies could drive a higher conversion rate for those already inclined to travel to ski destinations.
2. Time of day/day of week. A promotion offered via email on top of a pile of such emails appearing in an in-basket on a Monday morning is not likely to be very effective. There are certainly times of day and days of week that will produce a better response – but this may differ somewhat by customer. Potentially, as people begin to think about weekend plans on a Thursday they may become more open to both weekend and longer-term leisure opportunities.
3. News or media coverage. Certainly, an event can drive demand – and building on an event’s media coverage with an airline communication can capitalise on such market changes. The post-Brexit-vote drop in the value of the British pound makes it cheaper for travellers to England. If a travel magazine features a certain destination, readers will likely be more open to a campaign or package deal for that destination. Increasingly, travel suppliers are monitoring social media discussions to present offers at ‘the right time’.
4. Related travel pricing. If hotel rates fall in Miami, or if a high-profile hotel has a promotion, airlines that serve Miami may be able to capitalise on it. As airlines pursue total travel merchandising, selling hotels, car rentals, and events, they are better positioned to exploit non-flight-related ‘deals’.
5. Ancillary services. Many travel e-merchandisers have studied the ‘right time’ for ancillary sell-ups. The right time for bag fees is said to be about a week before the flight – opting to spend another $25-$30 at the same time as the flight is something customers initially defer. Similarly, the ‘right time’ for booking car rentals and hotels may be a few weeks before departure.
As airlines continue to gain sophistication in consideration of external factors, there is an opportunity to refine ancillary merchandising. As temperature helped jetBlue sell more tickets, more ancillary could be gained by leveraging certain external factors:
Would bad weather at the destination make ground transportation more desirable relative to car rental?
Would challenges with security at the airport influence the attractiveness of the Expedited Traveller programme?
Would customers be more prone to respond to a pitch for increased travel comfort (Big Seat, priority boarding) on a stress-filled Monday morning than when home for the weekend?
Certainly, ‘the right time’ lends itself to new creative approaches. jetBlue’s success with temperature is a great example of exploiting external factors in travel merchandising but there are many possible opportunities for applying external factors to identifying the right time to maximise travel sales.