- without losing sight of the importance of customer
loyalty
Airline and Tour Operators are facing ever increasing pressure
to deliver revenue more efficiently. Selling and maximizing
revenues across multiple channels is therefore becoming central to
most business strategies.
The charter airline industry is a highly competitive and price
sensitive industry. In the past Tour Operators found revenue in the
bundling concept but today, low cost airlines has led the way in
unbundling pretty much everything that passengers were used to
getting for free. This has resulted in increased competiveness and
transparency and in turn lower fares and lower profit margins. This
in turn led to that the charter airline industry had to open their
eyes to finding new concepts and new revenue channels.
As ancillary revenue by definition is revenue derived from goods
or services other than the core business, finding and maximizing
sales from ancillary revenue products can therefore offer a
powerful source of new revenue streams. As the ancillary revenue
channel continues to grow in importance, finding ways on how adding
more direct consumer touch points for ancillary sales can help any
business increase channel efficiency. Ancillary revenues is not
about making customers pay for everything, don't do it the Ryanair
way, it is of course about making money but keep your brad in mind
and always strive to add value that builds loyalty.
By making ancillaries a business strategy you can:
- Create incremental revenue: Open the door to new revenue
streams by offering value add products and services based on your
charter operations.
- Create a better travel experience for your customers: Providing
added value products and services that give your passengers piece
of mind and helps them to stay in control; before, during under and
after flying builds stronger relationships and increases customer
retention.
- Manage the consumer touch points: Understand your consumer and
your own portfolio of ancillary product and services. Use this
knowledge to match your added value proposition to the needs and
desires of your consumers.
Understanding the needs and expectations of your customers is
what it's all about. Then you make sure you deliver towards those
needs! If you want to succeed with your ancillary services you need
to fully understand your customer. Focusing your ancillary revenue
strategy on fulfilling customer needs is therefore the key to do
ancillary revenue right.
If you are new to ancillary revenue, start by looking at the small
things you can do. Find your consumer touch points, identify
products and services to offer and make sure to communicate it. If
you are already doing this and want to get more advanced, look at
extending products and services sold along the chain in everything
from reservation systems to social media and mobile technology.
Stay on top of what you are selling and when you are selling it and
make sure that you always provide a service and add value.
Added value creates a better travel experience; a better travel
experience creates increased customer loyalty and increased
customer loyalty builds revenue over time.