Welcome to the Paxport blog, an information and conversation hub for anyone interested in what's going on at Paxport and in the charter airline industry. Please join the conversation as we value your thoughts, feedback , suggestions, and questions. Mid-code Crisis http://www.paxport.net/blog 12/05/2011 01:25 PM 12/05/2011 01:25 PM Johan Ran http://www.paxport.net/blog/posts/2011/december/how-to-do-ancillary-revenue-right!/   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. Focusing on customers' unmet needs or helping them solve a problem drives growth and ROI. As each individual has very different needs, knowing your customer is becoming more and more important. As a marketer or business manager you might think that you know your customers. Don't assume you do, talk to them, collect information when you can, get to know them, build rapport and offer the services that they need, make their world a better place. Your competitors are probably already doing just that. What you need to consider when building your ancillary revenue strategy is that it doesn't contradict with your brand strategy. Ancillary is ancillary not your core business. Therefore you must make sure that your ancillary revenue services offers added value and reduced hassle and not added hassle and increased costs. According to David Stoyle of Amadeus Airline Consulting a properly thought-out ancillary revenue strategy includes six steps: Define the ancillary scope. Do you want to earn commissions on sales of other travel components? Sell miles or advertising to other businesses or offer a cobranded credit card? Do you want to focus on the passenger, selling lounge access, Internet access, priority boarding, seat selection, etc.? Measure current achievements. How much are you earning on change fees, extra legroom, excess baggage? Set your objectives. Do you have a per-passenger or percentage of overall revenue target, or are you benchmarking against a rival? Identify your opportunities. Look across all your operations for opportunities to further develop existing revenue streams as well as for new opportunities. Prioritize your efforts. What ancillary products and services have the most revenue potential? Build a roadmap so that everyone is on the same page. Look at all the systems that will be affected, and recognize that ancillary products are sold in many different channels, from online to onboard. What you need to do is control the consumer touch points, extend product and services sold along the chain with customer touch points in everything from reservation systems to social media and mobile technology. You need to be on top of what you are selling and when you are selling it in order to revenue manage the consumption of the ancillaries and making sure that you always provide a service and add value. Added value creates a better travel experience. http://www.paxport.net/blog/posts/2011/december/how-to-do-ancillary-revenue-right!/ http://www.paxport.net/blog/posts/2011/december/how-to-do-ancillary-revenue-right!/ 12/05/2011 01:25 PM Arne Daudey http://www.paxport.net/blog/posts/2011/november/world-travel-market/ Will/Can European governments influence tour operators and consumers to travel to Greece? With the closing of WTM 2011 we can look back upon a couple of days filled with new contacts, meetings with old acquaintances and interesting market views. One topic stood out, when talking to companies operating in or to the Mediterranean, how will the situation in Greece influence travel, more specifically, how important is tourism to restore the economy and with that support the European bailout scheme? Some actually fear that governments will pressure tour operators to put more emphasizes on the Greece holiday offerings, boosting sales and local economy, but will tour operators play along that easily? The North African region, suffering from revolutions in 2011, is foreseen to recover partly in 2012, there is especially a large interest from Russia in these markets, which will result in a strong growth in the number of Russian tourists. Will Italian and French travelers also return to their traditional destinations in 2012?   http://www.paxport.net/blog/posts/2011/november/world-travel-market/ http://www.paxport.net/blog/posts/2011/november/world-travel-market/ 11/11/2011 11:36 AM Johan Ran http://www.paxport.net/blog/posts/2011/november/ancillary-revenue-as-business-strategy/ - 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.   http://www.paxport.net/blog/posts/2011/november/ancillary-revenue-as-business-strategy/ http://www.paxport.net/blog/posts/2011/november/ancillary-revenue-as-business-strategy/ 11/08/2011 02:13 PM Johan Ran http://www.paxport.net/blog/posts/2011/november/the-90-9-1-principle-applied-to-ancillary-revenue/ Ever heard of the 90-9-1 principle? Simply put some people actively participate more than others. The 90-9-1 rule is usually mentioned when it come to participation engagement in online communities. In most online communities, 90% of users are lurkers who never contribute, 9% of users contribute a little, and 1% of users account for almost all the action. Read more about this in Alertbox : Jakob Nielsen's Newsletter on Web Usability. This concept can be applied very well to ancillary revenue and in-flight seat sales. The online communities have the lurkers, editors and creators. The charter airline ancillary seat sales have their keeners, convertibles and the non-action-ers. (Names that I hope describe the essence of the consumers. Feels free to come up with better names). 1% of consumers are "keeners" they will, if we close down all web shops and phone lines find their way to our office, walk through the gates, knock on our doors and find a sales rep that can help them make sure they get the seat they want. 9% of consumers are "convertibles" this group is marketable, open to suggestion and will buy if propositioned correctly. 90% of consumers in this case are "non-action-ers" or "laggers" consumers in this group tend to not read communications or not take action due to that to offer is not appealing enough. The percentages are of course not set in stone and can and will change over time. With the right marketing effort you can change the way your customers interact with your products and services. You can't do much about the "keeners" because they are what they are. However, you should focus on making sure the "converters" actually convert and that the non-action-ers becomes "converters". Incorporate a marketing and communication strategy to promote your products and services. Marketing and communication is a continuous process that will lead to a higher conversion and better service.     http://www.paxport.net/blog/posts/2011/november/the-90-9-1-principle-applied-to-ancillary-revenue/ http://www.paxport.net/blog/posts/2011/november/the-90-9-1-principle-applied-to-ancillary-revenue/ 11/22/2011 10:15 AM Johan Ran http://www.paxport.net/blog/posts/2011/november/changes-in-ancillary-revenue-strategies-2012/ The travel industry businesses anticipate a change in ancillary revenue strategies in 2012 according to a recent Collinson Latitude survey . Non-travel related product sales and maximizing channel revenue through cross-selling and up-selling strategies will play a pivotal role in the future of ancillary revenues. Traditional travel products will of course remain very important in any ancillary revenue program or strategy. The important fact is that you need a plan on how to capitalize on your ancillary revenue potential without losing sight of the importance of customer loyalty and adding value. See previous post. The Travel industry, airlines in specific, is the sector which has grown its ancillary business the most or at least at a rate faster than any other industry. I focus on the Charter Airline and Tour Operator part of the travel industry but when you mention ancillary revenue management, Ryanair usually comes up as the thought leader in this field.  Important to understand is that they focus on transporting passengers from one destination to another and don't care too much about the experience and adding value. They deliver value through cheap fares and delivering on their promise to take passenger from A to B. When it comes to the charter travel industry, focus needs to be, and rightfully is, on the customers. Ancillary services should add value and choice! Ryanair didn't introduce the ancillary revenue concept until around 2000, if I am not mistaken?  In the Nordic region we have had ancillary sales much longer than that even if it wasn't called that at the time. In 1991, Inflight Services started providing services to the travel retail industry that led to sales and revenues from other sources than their core business. The non-travel related product was of course duty free sales and is still a very powerful ancillary revenue program for the charter travel industry in the Nordic region.  The question is when other European countries will see this potential? An ancillary revenue business strategy is a must these days and according to recent trends need to incorporate both travel and non-travel products.   http://www.paxport.net/blog/posts/2011/november/changes-in-ancillary-revenue-strategies-2012/ http://www.paxport.net/blog/posts/2011/november/changes-in-ancillary-revenue-strategies-2012/ 11/30/2011 10:15 AM Patrick Lindblom http://www.paxport.net/blog/posts/2011/october/welcome!/ Today we publish our new website and an updated graphical profile. This marks a milestone on our ongoing quest to develop Paxport as a company. Those of you who attended our customer event "Paxport Ancillary Revenue Summit" heard in my keynote speech a bit about how we see the future and what role we are playing in it. Our vision is to empower our customers to provide a better travel experience and we look at doing this by: Being a one-stop shop for ancillary services and operational support, not only tied to the aircrafts but also for destination services etc. The sales channels and technologies are the same so there is better efficiency and leverage achieved by using our platform while having the benefits of our operational integration and support. Closing the loops: Get post-boarding info back from the DCS and integrating with our customers' CRM systems. Integrating our solutions to the booking flow. This has tremendous effects on conversion. Introducing mobile sales channels via smartphones and tablets Integrate with social media These are a few of the projects that we are looking at in our Product Management department. We are constantly developing our portfolio of software and services. Our model with Software as a Service and Managed Services concept has proven to be a good way for our customers to get easier access to new sales channels, develop service inventories, integrate with own solutions and at the same time get operational integration all the way through the DCS and to cabin crew reports. We will continue to develop our offer further. In the pipeline right now is a Business Intelligence package where you as a customer will have online access to data and statistics in an analysis package to look at Key Performance Indicators and trends within your ancillary revenue solution from Paxport. We have a proof of concept project going right now to look at the technology and after that we will invite a some of our customers to a workshop about what you would like to see in such a package. We take your business very seriously and have made initiatives to develop our service quality in quite a few areas. Last week we put into production a new support system from Zendesk, which we now use to collate all customer service cases and support issues. Every single email to our helpdesk gets a ticket id and regardless of who responds, the dialogue between us and you as a customer is preserved. We get statistics on handling times in the helpdesk and you can also rate the help you got on ticket level, so we can improve our processes constantly. We are also looking to extend our office hours, offer more flexible services and continue to developour API OpenPAX so we can integrate our solutions with our customers' systems and provide even better value for money. http://www.paxport.net/blog/posts/2011/october/welcome!/ http://www.paxport.net/blog/posts/2011/october/welcome!/ 10/17/2011 11:10 AM