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Tnooz-Fusion FREE webinar: The science behind ancillary merchandising

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The travel industry knows there's great promise in selling ancillary products to travelers who want more ways to experience their journey.

Fusion's research shows 61% of customers are open to buying add-ons to complement their flight purchase. However, only 37% say the ancillary products being offered are relevant, and only 12% say airlines specifically are doing a good job of customizing offers.

Watch this Tnooz-Fusion webinar and learn how to design, test, and execute a winning ancillary sales strategy.

Panelists for the webinar are:

Mark Brown, VP EMEA, Fusion
Sinead Finn, Owner, affinnity
Sean O'Neill, Editor in Chief & Moderator, Tnooz
Gene Quinn, CEO & Producer, Tnooz
This webinar took place on the 10th of November, 2016.

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Tnooz-Fusion FREE webinar: The science behind ancillary merchandising

  1. 1. The science behind ancillary merchandising Webinar November 10, 2016
  2. 2. Your hosts Sean O’Neill Editor in Chief & Moderator Tnooz Gene Quinn CEO & Producer Tnooz
  3. 3. Your presenters Mark Brown VP, EMEA Fusion Sinead Finn Owner affinnity Will Plusch Sr. Optimization Mgr. Fusion
  4. 4. Poll no. 1 Where are you located?
  5. 5. Poll no. 2 Which industry segment do you represent?
  6. 6. THE SCIENCE BEHIND ANCILLARY MERCHANDISING THE SCIENCE BEHIND ANCILLARY MERCHANDISING
  7. 7. THE SCIENCE BEHIND ANCILLARY MERCHANDISING KEY TAKEAWAYS • The current state of ancillary sales and merchandising in the travel industry • What travel companies need to put together a successful ancillary merchandising strategy • How to reach optimization success through test design and execution 6
  8. 8. Poll no. 3 Sales from ancillary products account for how much of your company’s total annual revenue?
  9. 9. Poll no. 4 Do you expect that ancillary revenue number to increase or decrease in 2017?
  10. 10. THE SCIENCE BEHIND ANCILLARY MERCHANDISING CURRENT STATE OF THE INDUSTRY HOW IT’S GOING.
  11. 11. THE SCIENCE BEHIND ANCILLARY MERCHANDISING INDUSTRY OBSERVATIONS 10 CUSTOMER NEED ONE SIZE FITS ALL INDUSTRY FOCUS WIN WINHigh demand for ancillary products from customers to save time, hassle and money Improving merchandising and retailing across all distribution channels is a key objective Travel companies as a whole are not doing a great job of merchandising and selling ancillaries You can increase ancillary sales & deliver a better experience for your customers at the same time!
  12. 12. THE SCIENCE BEHIND ANCILLARY MERCHANDISING FINDING A CATALYST Customers are open to purchasing additional add-ons to compliment their flight purchase 11 61% Customers say ancillary products offered to them are relevant37% Source: Fusion Omnibus Study 2015
  13. 13. THE SCIENCE BEHIND ANCILLARY MERCHANDISING MEASUREMENT FOR SUCCESS Customers say that airlines are doing a good job of customizing their offers 12 12% Travel companies offer ancillaries based upon real-time ranking and decisioning4% Source: Atmosphere Research and Fusion / WBR The Digital Journey 2016
  14. 14. THE SCIENCE BEHIND ANCILLARY MERCHANDISING ?ONE SIZE FITS ALL 13
  15. 15. THE SCIENCE BEHIND ANCILLARY MERCHANDISING LEARNING FROM EXPERIMENTS Most airlines currently have a low bar for engagement with customers through their digital platforms throughout the journey. Rather than customer centric, these systems are designed to trigger contacts focused internally on the needs of the organization. 14 Skift / Sabre: How airlines can create a customer-centric digital experience
  16. 16. THE SCIENCE BEHIND ANCILLARY MERCHANDISING EVOLUTION OF THE INDUSTRY Airline executives say improving ancillary merchandising is a key objective over the next 2 years! Source: Atmosphere Research 15 91%Do you expect that number to increase or decrease in 2017
  17. 17. THE SCIENCE BEHIND ANCILLARY MERCHANDISING Sir Tim Clark President of Emirates Airlines “Need to sell more ancillaries to offset highly discounted economy fares.” THE OBJECTIVE “The key to digital is using data to understand customers to personalize offers and make it easy!” Dame Carolyn McCall CEO of easyJet
  18. 18. Poll no. 5 Which of the following best describes the method your company uses to market ancillary products?
  19. 19. THE SCIENCE BEHIND ANCILLARY MERCHANDISING INSIDE THE LAB WHAT YOU’LL NEED.
  20. 20. THE SCIENCE BEHIND ANCILLARY MERCHANDISING GATHERING THE ELEMENTS 19 DATA PRODUCTS PEOPLE PLATFORM
  21. 21. THE SCIENCE BEHIND ANCILLARY MERCHANDISING THE DATA 20 DATA Having centralized data on hand empowers travel companies to better understand their customers through a variety of research and analytical methods. • Scoring • Automated Analytics • Customer Profiling • Test Strategy • Customer Segmentation • Pricing Model & Elasticity Testing • A/B & Multivariate Tests • Predictive Modeling
  22. 22. THE SCIENCE BEHIND ANCILLARY MERCHANDISING THE ANCILLARY PRODUCTS 21 PRODUCTS • Seat upgrades • Medical coverage • Car service A good mixture of products to offer your customers is essential in meeting their needs for any number of situations. • Extra luggage • VIP Boarding • Travel insurance
  23. 23. THE SCIENCE BEHIND ANCILLARY MERCHANDISING THE RESOURCES 22 DATAPEOPLE • Project Managers • Optimization Strategists • Business Analysts • Developers • Marketing Experts The right skills and experience are critical for any organization hoping to optimize ancillary sales. • Data Specialists • UI/UX Designers • Statisticians • QA Engineers
  24. 24. THE SCIENCE BEHIND ANCILLARY MERCHANDISING PLATFORM THE PLATFORM 23 A flexible merchandising platform gives travel companies the agility to improve marketing methods and increase sales in real-time. This should include: • Data models • Recommendation engine • Product repositories • Purchase capabilities • Testing • Dynamic content • Analytics
  25. 25. THE SCIENCE BEHIND ANCILLARY MERCHANDISING GETTING IT RIGHT Once you have the appropriate data, products, people, and platform in place – delivering on the fundamentals of good merchandising and retail is not complicated. 24 Right Customer Right Product Right Channel Right Time Right Way
  26. 26. THE SCIENCE BEHIND ANCILLARY MERCHANDISING SUCCESS THROUGH EXPERIMENTS HOW TO GET THERE.
  27. 27. THE SCIENCE BEHIND ANCILLARY MERCHANDISING SCIENTIFIC PROCESS 26 1 2 3 4 5 6 DETERMINE TEST FOCUS ISOLATE PREDICTORS EXECUTE TESTS ANALYZE RESULTS DEVELOP HYPOTHESIS IMPLEMENT WINNERS …AND REPEAT!
  28. 28. THE SCIENCE BEHIND ANCILLARY MERCHANDISING DETERMINE THE FOCUS The first step in an optimization process is to determine the challenge and to choose a test focus with great potential. For example, if a certain product accounts for a large percentage of revenue yet is underperforming expectations – this would be a good place to make a positive impact. 27
  29. 29. THE SCIENCE BEHIND ANCILLARY MERCHANDISING ISOLATE STRONG PREDICTORS 28 Let the data drive the decisions. Look at all the factors and determine which attributes help group similar customers together into segments and predict their most likely purchase behavior. • # of Passengers • Route Distance • Trip Cost • Trip Duration • Booking Window • Season
  30. 30. THE SCIENCE BEHIND ANCILLARY MERCHANDISING DEVELOP THE HYPOTHESIS 29 For each customer segment, develop a test hypothesis and determine the strategic test variations each will be presented with. A B C
  31. 31. THE SCIENCE BEHIND ANCILLARY MERCHANDISING EXECUTE TESTS The purpose of testing is to learn as much as possible about customer behavior while minimizing the risk. This can be done by limiting the initial audience to a small representative portion of the population, in an effort to predict how most customers will likely react. 30
  32. 32. THE SCIENCE BEHIND ANCILLARY MERCHANDISING ANALYZE RESULTS Start by analyzing results of the test for the entire test population and then systematically drill down to more granular analysis to find pockets of success and to augment learning. This thorough analysis allows for promotion of your test to a targeted group without influencing segmentation or relying on predefined business rules. 31
  33. 33. THE SCIENCE BEHIND ANCILLARY MERCHANDISING IMPLEMENT WINNERS It’s great to know what customers are doing and why – but using the right type of platform will allow for actionable intelligence and provide the ability to apply changes right away without having to wait in a long IT queue. 32
  34. 34. THE SCIENCE BEHIND ANCILLARY MERCHANDISING EVERYONE WINS 33 POOR EXCELLENT HIGHLOW Fully Personalized Ancillary Offers Dynamic Offers Based On Unique Customer Segments Static Business Rule Ancillary Offers Generic One Size Fits All Offers CUSTOMER EXPERIENCE ANCILLARY REVENUE GENERATED
  35. 35. THE SCIENCE BEHIND ANCILLARY MERCHANDISING SUMMARIZING THE SCIENCE 34 Move Away From The ‘One Size Fits All’Approach Customers Desire More Relevant Ancillary Products Improve Results via Continuous Testing & Optimization Key Ingredients: Data + Products + People + Platform
  36. 36. THE SCIENCE BEHIND ANCILLARY MERCHANDISING THANK YOU Mark Brown Vice President, EMEA at Fusion mark.brown@fusion.com Sinead Finn Owner at affinnity sinead.finn@affinnity.com Will Plusch Sr. Optimization Manager at Fusion will.plusch@fusion.com
  37. 37. Q & A
  38. 38. Thank you! Send your questions and comments to gene@tnooz.com Replay and presentation will be available on www.tnooz.com
  39. 39. The science behind ancillary merchandising Webinar November 10, 2016
  • AtulKamble5

    Jan. 3, 2017

The travel industry knows there's great promise in selling ancillary products to travelers who want more ways to experience their journey. Fusion's research shows 61% of customers are open to buying add-ons to complement their flight purchase. However, only 37% say the ancillary products being offered are relevant, and only 12% say airlines specifically are doing a good job of customizing offers. Watch this Tnooz-Fusion webinar and learn how to design, test, and execute a winning ancillary sales strategy. Panelists for the webinar are: Mark Brown, VP EMEA, Fusion Sinead Finn, Owner, affinnity Sean O'Neill, Editor in Chief & Moderator, Tnooz Gene Quinn, CEO & Producer, Tnooz This webinar took place on the 10th of November, 2016.

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