Why up-selling in travel is key to long-term revenue growth and loyalty

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

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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.

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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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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


The Traveler Has Two Wallets

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Source: Overstock.co

The room

Everything else


The “Three I’s” Of Travel Merchandising

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Inspiration IndividualismImmediacy

Source: Google Images


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



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: OmniHotels.com


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




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%)


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


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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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

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Q & A

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Replay and presentation from today’s webinar will be available at www.tnooz.com

Please send your questions to [email protected]

http://www.tnooz.com/

mailto:[email protected]

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”

Why up-selling in travel is key to long-term revenue growth and loyalty

Business

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percent of us travelers

us average smartphone