Why up-selling in travel is key to long-term revenue growth and loyalty
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Why upselling is the key tolong-term growth and
loyalty
Webinar20 August 2013
K
Kevin MayEditor & Moderator
Gene QuinnCEO & Producer
Your hosts
K
Jason BryantFounder & co-CEONor1
Your panelists
Henry HarteveldtTravel Industry AnalystHudson Crossing
Why Upselling is the Key to Long Term Revenue Growth and Loyalty
5
Nor1’s patented technologies are focused on perishable inventories serving a variety of industries, while our core solutions are designed to support the hospitality industry.
Nor1 enables hoteliers to have direct contact, in real-time, with their guests throughout the trip lifecycle, from booking through check-out.
About Nor1
Post-Stay Pre-Stay At Check-inUpsell and Cross-sell offers from tours and activities, dining, transportation, spa, etc.
Global Team: Mix of technologists, data scientists, and travel industry veterans in Silicon Valley, Mexico, Germany and Singapore.
Intra-Stay Upsell at booking
confirmation
Pre-Arrival Emails
Hotel Services Upsell
Satisfaction and Loyalty
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Nor1 is the Technology Leader in Upsell Solutions Engineered to provide a clearer understanding of:
• What consumers want• Are willing to pay for; and• Improve the offer process
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Nor1 Hotel Partners
88
What is Upselling?
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Upselling focuses on driving additional conversions from your current customers, and can be the largest and most profitable revenue source for any business.
Upselling refers to revenue potential that goes above and beyond a traditional booking.
10
Why is Upselling Critical?
1. Creates greater utilization of fixed assets
2. Builds customer loyalty - enhanced guest experience
3. Maximize the value of each reservation
4. Leverage the resultant data across the enterprise
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Upsell Benefits for Consumers
• Consumers love room upgrades and will pay for them.
• Helps differentiate your business in eyes of consumers.
• Makes your business’s Mobile application more relevant during the actual travel phase.
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Travel-focused strategic advisory firm Headquartered in New York City, serving a global client base New subscription research program focusing on marketing, distribution
and technology─ Objective and independent
─ Mix of large-scale consumer surveys and topic-specific industry executive studies
About Hudson Crossing
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Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
The Journey “Story Arc” Spans Multiple Sales Opportunities
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Dream Research Book Outbound journey
DestinationReturn journey
Share Dream
Story arc
Channels/Touchpoints
Products/Offers/Promotions Can Reach Travelers Beyond Initial Booking Point
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
The Traveler Has Two Wallets
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Source: Overstock.co
The room
Everything else
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
The “Three I’s” Of Travel Merchandising
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Inspiration IndividualismImmediacy
Source: Google Images
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Traveling Is An Excuse For Self-Indulgence
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3 in 5 travelers say they do nicer things for themselves when they are on a trip
Base US online travelers
Source: Hudson Crossing’s US Travel Online Study, Q1 2013
Source: Google Images
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Details Matter
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74% of travelers consider the quality of a hotel’s amenities and service to
be importantBase US online travelers
Source: Hudson Crossing’s US Travel Online Study, Q1 2013
Source: OmniHotels.com
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
A Significant Number Of Travelers Can Be Tempted With Up-Sell/Cross-Sell Offers
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Save time/reduce hassle: 47%
Receive better service: 48%
Enjoy more comfort: 45%
Percent of US travelers who will consider paying a reasonable premium for the following:
Base US online travelers
Source: Hudson Crossing’s US Travel Online Study, Q1 2013
Source: Google Images
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Travelers Have Above-Average Mobile Device Ownership
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2012 2013 2014 (E) 2015 (E) 2016 (E) 2017 (E) 2018 (E)0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
53%
66%75%
81%85% 88% 91%
21%
42%
59%
71%79%
85%89%
US Smartphones US Tablets
2013 US average smartphone adoption (43%)
Source: Hudson Crossing analysis
US mobile device average” Pew Internet Research
2013 US average tablet adoption (31%)
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Mobile Enables Additional Selling Opportunities
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During ini-tial reserva-
tion
Between making
reservation and check-
in
At the airport
On the plane
0%
10%
20%
30%
40%
50%
60%
70%
80%Premium in-flight meal
Checked bag fees
Upgrades
Fast-track security screening
Priority boarding
Airport transfer
Advance seat assignments
Hotel accomodations
Travel insurance
Base: Smartphone-owning US online leisure airline passengers
Source: Hudson Crossing’s US Online Leisure Travel Study, Q1 2013
Percent of airline passengers who want to buy the following items after making initial reservation
25%-50% of product sales opportunity
Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Definition: Using relevant data to create and target offers, Customer Managed Experiences are products/services that customers create and buy on their channel/platform of choice and use when and where the customer wants.
Entering The Era Of Customer Managed Experiences (CMX)
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Confidential !! All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Ancillary Products Are The CMX Catalysts
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Source: Wizie.com
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The Pain of Paying = Strong Consumer Interest for Upgrades After Initial Purchase
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Capitalize on Loyalty
Complimentary option is pre-selected
A 5% increase in customer retention can increase a company’s profitability by 75%... Bain and Company.
Paid options are also shown
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The Upsell Opportunity $9
IS THE AVERAGE PRICE PAID FOR A HIGH FLOOR
$28+IS THE AVERAGE PRICE PAID FOR EARLY CHECK IN
$36+IS THE AVERAGE PRICE PAID FOR LATE CHECK OUT
$58IS THE AVERAGE PRICE PAID FOR KING SUITE (MOST POPULAR UPGRADE REQUESTED)
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Creating True Personalized Commerce
In order to create a relevant dialoguewith the traveler by predicting what they are most likely to be interested in at a given point in time, Real-Time Data & Decisioning must be core to your
Upsell Strategy.
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Three Levels of Analytics Maturity:
Optimization
MathematicsMachine Learning
Data Mining
Probability Theory
Statistics
Customer Behavior
Management Science
Operations Research
Mathematical Programming
Stochastic Programming
Game Theory
Simulation
EconomicsComputer ScienceDecision Science
Artificial Intelligence
Dynamic Programming
Big Data
Profiles Predictive ModelingPersonalizationBusiness Intelligence
Experimentation
1. Traditional Business Intelligence
2. Predictive Business Intelligence
3. Real-Time Decision Intelligence
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Real-Time Upsell Offers Take Real-Time Algorithmic Analysis
Data points worthconsidering, include:
• Consumer profile• Current transaction• Historical transactions • Inventory availability
Real-time decisions include:
• Product(s) selection • Assortment• Pricing
Machine learning algorithms learn from each transaction to calibrate future offers.
• Constraint handling• Geo Location• Weather
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62% of
restaurant searches are from smartphone and tablet devices, according to Google.
75% of
Americans bring their phones to the bathroom.Searches on mobile
devices are
66% more likely to have local intent than a desktop search.
80% of mobile users prefer
locally relevant advertising and
75% are more
likely to take an action after seeing a location-specific
message.
(Sources: Mobile Audience Insights Report from JiWire, 2012
and Digiday, 2013)
Statistics for Mobile Purchasing
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The Mobile Upsell = Experience Management
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Make relevant and targeted offers to consumers while they are traveling, such as:
• Maps• Dining Offers• Room Upgrades• On-Site Schedules• Event Invitations• Tours• Weather• Spa Offers• Activities• Reminders• Flight Delay Communications
The Mobile Upsell = Experience Management
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What’s the Secret to Upsell Success?
• Invest in analytics and real-time decisioning.
• Optimize everything for Mobile.• Think more broadly about your
product set.• Engage multiple functions in the
discussion of upselling and to leverage the resultant data.Upselling is the Key to Long Term Revenue Growth
and Loyalty
K
Q & A
K
Replay and presentation from today’s webinar will be available at www.tnooz.com
Please send your questions to kevin@tnooz.com
Company Confidential.Do Not Copy or Distribute
© 2013 Nor1 Inc. All Rights Reserved
“Nor1”, “Powered by Nor1”, “Nor1 Upgrade Your Life”, “eStandby”, “eStandby Upgrade”, “Nor1 Upgrade”, “PRiME”, “Front Desk Integration”, and “eReach” are representative of
some of the logos and trademarks registered by Nor1, Inc.
Copyright © 2004-2013 Nor1, Inc. All Rights Reserved
The Nor1 system and/or its use is covered byPatent 7,249,062 B2 and other patents pending.
Thank you
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Core Technology Assets
• Unique buying process that allows merchants to price and merchandise perishable inventory more effectively
• Utilizes PRiME technology to optimize offers
• Platform that connects travel consumers and decision makers
• Patent issued for “Method for Transacting for a Perishable Object Having an Uncertain Availability”
• Deep integration into property management systems to provide up-sell offer at point of check-in
• Initial integration with Micros Opera (leader in PMS systems with 22K properties)
• Utilizes PRiME technology to optimize offers made
• Extendible to other point of sales, e.g. retail check out at cash register, mobile payment checkout
• Predictive modeling engine trained on millions of historical transactions
• Makes real-time decisions on product selection, pricing, and display rank
• Leverages data from consumer and supplier profiles, behavioral observations, real-time transaction information, and inventory availability for offer optimization
• Understands consumer’s willingness to pay and can steer demand on behalf of supplier
• 2 Patents issued/allowed: “Computer-Implemented Systems and
Methods for Automatic Merchandising” “A Method and a System for Simultaneous
Pricing and Merchandising”
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