For decades airlines have untied their dependency to GDSs and showcased their product by developing their airline.com. In parallel, Google was changing their rules and was adding Google Flights. Overtime the free traffic acquired through organic search dried up. Today, to paraphrase what Paul Hennessy – former Priceline CEO, said a year ago: ‘this is a paid world’ and each year it becomes a more expensive one for airlines.
The danger was identified as soon as 2010 by the Fairsearch organization and it has become worse. Industry leaders like Bobby Healy – CarTrawler CTO, are very vocal about the risk for airlines to give away their flight and pricing data to Google. This is not only about increasing costs but also about a more strategic perspective of airlines losing control. Resolving holistically the issue is a regulatory matter: EU commission has announced a record fine to Google for their Google Shopping. But there is probably no airline CEO on this planet waiting for somebody in D.C. or Brussels to save their business, so they are actively looking for alternative strategies.
Spend Smart to Avoid Big Spending!
Instead of spending big on Google fees power your shopping and merchandising to boost revenues. Optimizing the airline offer is a strategy that achieves quick results: by acquiring traffic, extracting more $$ from visitors and finally retaining customers to maximize the customer lifetime value.
The Opportunity of the New Distribution Channels and NDC
28%1 of people start their flight research on a metasearch site. So picture this – connect multiple metasearch through NDC or other APIs in order to maximize your coverage and visitors rush to your web site. At least if you have a modern shopping system that accommodates massive volumes and 10 000 searches per booking or worse… at an affordable cost. Any legacy system would just surrender under the sheer volume… but still presents you with the bill.
Get More $$ for Each Shopper
When the cost of acquisition is high, turning more shoppers into customers and maximizing the revenue for each one is critical. Shoppers have an intent to buy from you. You have the best itinerary at the most convenient times, so give them a superior shopping experience, value for money, and you maximize your chances they will buy. Sure, this will fall short with a traditional pricing system limited to static filed fares and brands, not much better than what was leading-edge… in 2007.
Your passengers’ ‘second wallet’ is your upsell opportunity… tapping into the average $1002 that travelers are ready to spend to improve their flight experience. Just give them what they expect: extra baggage, more legroom and goodies like Wi-Fi, lounge access, etc. Design the offer that matches your passengers’ expectations – bundle the right services and adapt to the profile of the traveler. With dynamic pricing capabilities in place you can set the price at the dollar amount needed to make the sale.
Retaining Customers = Less to Acquire, More Long Term Revenues
Maximize customer lifetime value. Make your customers loyal. It is not only about giving miles away: in 2017 customers demand instant gratification. By recognizing frequent flyers adjust the offer to incentivize a new purchase: why not offer lounge access for the same price, an upgrade at preferential conditions or a discount? When acquiring a customer through Google costs more than $20, $10 discount is a bargain!
Technology is Freedom!
Google will own the top of the funnel or most of it – this is not in your control. Transforming into a digital, customer-centric airline is certainly the ultimate goal but it is a multi-year journey. Escape the legacy static PSS technology, move to a complete offer optimization system within weeks.. Enjoy the freedom to distribute to NDC channels and from metasearch to travel agencies with full control of your content. Experiment pricing strategies in real time. Turbocharge your airline.com to improve conversion and yield: merchandise and personalize to increase your revenue per ticket and secure loyal customers. We are living in exponential times, don’t wait for others to do it before you do.
1,2OAG and industry sources
About the AuthorMore Content by Stanislava Yordanova