Travel companies are always advised to stick to their customers’ preferences and being disciplined in how they approach them when it comes to cross-selling and up-selling through the booking process.
Cross-selling and up-selling to the youth and independent online travel sector can turn out to be a significant growth opportunity.
All of this, as Paul Hastings-Gayle, Head of Distribution, HostelBookers.com, says would depend upon the following factors: strength, price transparency, and full product choice.
“In the youth and independent online travel sector, customers are web savvy, they are typically pioneers and early adopters, therefore, they are less likely to ‘package’ for convenience, as our surveys show that price, brand, and choice are the key factors of their purchasing decision,” Hastings-Gayle told EyeforTravel.com’s Ritesh Gupta in an interview.
Hastings-Gayle, who is scheduled to speak at the forthcoming Travel Distribution Summit Europe 2012, to be held in London (April 17-18) this year, highlighted that travelers in this segment like to know exactly what they are paying for and are used to only paying for what they need/want, enabling them to spend more on “cultural experiences.”
“I guess hostels and budget hotels were the original ‘unbundlers,’ where guests chose to pay for towels, sheets, lockers and breakfasts!” said Hastings-Gayle.
He added, “Over recent years, this trend of unbundling accommodation has changed, as more and more hotels and hostels include what was previously considered ancillary products as part of the core product – all available for the same price – breakfast, sheets, lockers and even Wi-Fi are increasingly being bundled as part of the core product rather than an extra!”
“Ancillary products for this sector are likely to focus on pre- and post-arrival, products with limited opportunity for further unbundling of the core product. Our customers love gaining the lowest price available, therefore, unbundling has its benefits to this sector as long as they can see clearly what they are paying for, so fees and charges without demonstrable value will directly hit conversion in our market,” said Hastings-Gayle.
He also spoke about that getting the merchandising right, profile of this segment, and selling ancillary offering via mobile phones and tablets. Excerpts:
It is highlighted that getting the merchandising right is all about creating a better customer experience. What do you think is the key to achieving the same? What factors does one need to take into consideration?
PAUL HASTINGS-GAYLE: Hostelbookers would agree with this statement. Youth and independent travelers are independently minded and are highly demanding in the information required about the product being served. Only when these savvy and independent visitors gain this do they consider the experience to be satisfactory.
The key for us is simple, to continually develop our site around the question, ‘does it make sense for the customer?’ Does the customer have all the information, set out in the simplest way, at the appropriate time in the purchase path? Can the customer amend their choice? The main factor for us is to keep the purchase path informative, simple, clear, and transparent throughout.
How do you assess the maturity level of cross-selling and up-selling strategies in terms of them being tailored to match benefits and promotions to customers’ profiles? What sort of trends have you witnessed in this arena?
HASTINGS-GAYLE: The travel sector remains in the early stages of this, possibly due to the infrequency of the travel purchase. For books, clothes, and groceries, purchases are more frequent and so the opportunity to monetize cross-selling and up-selling is more advanced. Perhaps there is much for the travel industry to learn from the leaders in these sectors, such as Amazon.com Tesco.com, ITunes; these are companies who have traveled further along the path than the average travel company.
Travel companies are attempting to better serve their most loyal customers while also working to differentiate themselves from competition on features other than cost. A lot of these efforts are focused online in gaining a deeper understanding of the plans that a user has already made, and then using that information to market travel enhancements, upgrades, or add-ons. What do you make of such efforts?
HASTINGS-GAYLE: These are very early days for such developments and to ascertain the real value of these. It is an obvious and positive move to explore these avenues, – as an industry we would be crazy not to – however, we also know that past purchases, and wider social media knowledge about customers does not necessarily conclude with us knowing the customers’ future requirements.
In our sector, delivering the lowest price to our price-sensitive customers, significantly outweighs the value of travel add-on’s and upgrades to retain and reward loyal customers; as such, our efforts remain focused on remaining the price leader, so we can match our sector’s primary purchasing motive – gaining the lowest price, through a reputable brand.
What factors do you think a supplier should take into consideration while going ahead with offering ancillary services selling via mobile phones and tablets?
HASTINGS-GAYLE: Being aware of and choosing to be in the mobile and tablet space is important. More important for us is to know and understand how this space is being occupied by our market. In our market, our consumers are digital natives, they intuitively use new technologies, so we need to continually be aware of consumer behavior. The key consideration while going ahead with offering ancillary services is that:
1. detailed and extensive research of your own market is undertaken, and
2. clear objectives for being in the mobile market are established from the outset.
It is so easy to follow the crowd or, due to fear or “follower pressure,” move into this space without business clarity. Getting the objectives absolutely clear from the outset allows the rest of the project to be about excellence in execution against the objective. Should a company offer full/partial product/services? An app/simple a mobile-friendly site? Prioritize existing/new customers? See this as part of an overall marketing/acquisition strategy? Where, when, and how is success to be measured? Looking into the mobile and tablet market is the same as moving into any other new channel/territory – the same level of analysis and business questions need to be considered.
What according to you are the dos and don’ts in ancillary services selling via mobile phones and tablets?
– your comprehensive and detailed research,
– significant user testing and more importantly be prepared to change according to the results,
– think of your audience and the benefit to the customer, and
– it well (technically speaking) or not at all. A bad mobile experience is one sure way of reducing the value of your brand.
– be wedded to the idea/status of “having an app” without a clear objective, strong business case, and ROI expectation – however, you measure this,
– rush it.