Ai Editorial: Triumphing in the game of ancillary products and personalisation

First Published on 17th May 2016

Ai Editorial: Selling ancillaries is about identifying a need in a particular moment. The key here is to do it right. Because awkward personalisation can be worse than not personalising at all, says Vueling Airlines’ Maria Cardenal. She spoke to Ai’s Ritesh Gupta about getting it right.

Offering an ancillary product isn’t just about revenue maximization. If you can provide relevance and personalised service and service recovery at all touch points, then you have reached personalisation nirvana.

“Picture a transfer offer you receive while on your in-bound flight, the airline knows the actual hotel you need to go to and they are providing a free limo upgrade because your flight last week was delayed,” this is what an executive told me as he referred to the sort of travel experience he expects today.  

These are exciting times indeed. And there are executives, who are striving hard to excel in this arena.

I really enjoyed my interaction with Maria Cardenal, head of product development at Vueling Airlines.

Barcelona, Spain-based Maria finds the continuous challenge of seeking the next big thing or the next step in improving the product as the most exciting part of her role.

“It’s a very rewarding feeling to create new services for our passengers or innovate in business models. I am also fortunate because I have the chance to meet diverse and really interesting people from a lot of different business areas. What is less satisfactory are the limitations that we face to offer all these new services or products across our sales channels. That’s not an easy task. But we have been successful in selling part of them in a bundled way through our branded fares,” said Maria.

Delivering what I am seeking

What to offer each individual customer, when, and through which channel is the new merchandising paradigm. What this means is that unique and personalised offers for individual customers based on their attributes.

Nowadays, most airlines offer a great deal of ancillary products, even the ones that have been slow in introducing them. And more are to come, of course. What is not so common is to offer them in a personalised way, says Maria.

“Selling ancillaries is about identifying a need in a particular moment,” says Maria.

It’s heartening to hear this. It clearly shows the intent and the desire to make progress.

Of course, this would only be possible when travel marketers capture all interactions as well as shopping and buying behaviour across all channels – airlines can commence building a unique contact strategy for each visitor, traveller or customer. Also, the use of predictive analytics to drive offers in practical terms means you stop asking the question “What products do I need to sell” and start asking “When will a specific customer next make a purchase?” and “How best can we communicate to them to make it happen?”.

But amidst all this one shouldn’t forget the significance of doing it right.

“Because awkward personalisation can be worse than not personalising at all,” says Maria. She adds, ”Here is where big data comes into play.”

Using data effectively for personalisation

According to Maria, there are four fundamental aspects for using data effectively for personalisation:

1.     You need to collect enough data with enough quality.

2.     You need to have the ability to draw the right inferences. Customer intelligence.

3.     You need the right tools to transform the data into personalised messages or experiences.

4.     You must do it at the right time and in real time.

Maria said all the above is possible with today’s technology, but, as airlines, we are facing three big challenges that make it difficult to offer what we would like to, which are:

1- The mix of technologies: or how to integrate different technologies involved in this industry’s value chain, so that they all work together for the same purpose.  It’s easy for one of the links (technologies) of the chain to fail. Although it is a challenge even for our direct channels, indirect channels are the biggest challenge for data collection, customer recognition and the effective use of the information.

2- The cost-benefit balance: or the high cost of implementing personalisation.

There is evidence that personalisation is profitable because it drives conversion up, but there is also evidence that it only works when you get it right and only on a highly segmented audience. As a consequence, you have to be careful with the cost, both economic –high investment is needed- and also opportunity cost. Hopefully, personalisation tools and CRM technologies will be inexpensive in the near future.

3- Customer acceptance: or how much you can personalise before annoying customers or travel agencies.

Once you have the data and the right interpretation of that data aligned with the business strategy, as well as the technology to be able to use it effectively, then you need to use it in the right moment and with the right message so it will not be received as intrusive or wrong by the customer.

“Therefore, technology is not enough, you need to build your customer’s trust.  The relationship with your customers is a quid-pro-quo relationship. Travellers are willing to provide more personal information if it means a better customer experience for them. If you make proper use of their personal information and the message you send is relevant to them, then it will not annoy them, but will develop trust,” said Maria.

She also added, “We have to be humble, we are at the beginning just looking into the horizon of what we might be able to do in the future.”

Selling ancillary products in a better way

Maria would like to see an improvement in easiness, convenience, relevance and self-sufficiency when it comes to ancillary products.

“From a technology perspective, to achieve this we will need as much information as possible from our customer. For that reason, we need to work in a collaborative way with our partners and the rest of the stakeholders involved in the travel experience, sharing more information across platforms,” she said.

Overall, airlines are in a “very good position” to offer a personalised experience for travellers, integrating the best deals and all of the customer intelligence that all the stakeholders involved in the travel experience could share, to achieve a common goal: a win-win relationship which results in an enhanced travel experience, more repeat customers and, consequentially, more business.

“In a very near future I would like to see Social CRM playing a bigger role than it does today. Along with this, new advanced ways of customer recognition, geo-localization and real time communication will enable us to deliver contextualized and relevant product offerings to our passengers,” concluded Maria.

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