The sale of unbundled services does not automatically translate into bottom line results. As travel brands navigate the road to recovery, a successful complementary strategy relies on a balance between human creativity and machine learning to deliver the right message on the right product at the right time.
There are many uncertainties facing the travel industry – labor shortage issues, inflation concerns, and new variants of Covid, to name a few – but one thing is clear: the future is all about accessories. From paying $20 for a late check-out that allows a guest to enjoy the afternoon at the hotel pool, to opting for a premium package that includes sea and land on a cruise, the unbundling revolution that began on board airlines low-cost is spreading to every part of the travel industry
However, attaching a separate price tag to each product or service does not mean that customers will be willing to pay for it. Driving ancillary revenue depends on creating the right opportunities and the right messages that resonate with customers at the right times in their booking journeys. It’s a complex puzzle that Allianz Partners has worked to master as the world leader in travel insurance. The company draws on more than 166 billion data points, 2.1 million annual surveys, and a combination of human creativity with machine learning to deliver a world-class customer experience with better ancillary product options.
As more travel leaders adopt a la carte product structures, here are five key tips from the Allianz Partners playbook.
1. Think about your customers’ emotions
Begench Atayev, Head of Product Management and Innovation at Allianz Partners USA, spends a lot of time thinking about the data science and ever-evolving capabilities of Fusion CORE, the company’s proprietary quoting and optimization technology platform. However, his thoughts on accessories are rooted in a more fundamental piece of the analog human experience: empathy.
“Even for an ancillary product like travel insurance, it’s important to consider the phases of a traveler’s journey: the emotions they feel along the way, as well as the rational financial decisions along the way,” Atayev said. “From the dream to the planning, to the booking, to the actual part of the trip, each client works to meet different needs and address different anxieties about their trip.”
It’s no secret that many would-be travelers pass up part of the shopping experience, only to change their minds. With excessive online shopping cart abandonment rates in the travel industry reaching 98 percent for cruise bookings, Allianz Partners works to make sure customers know its product can help cover some of their biggest costs. worries about your trips. Consider the kind of peace of mind travel insurance can offer when booking your trip. It becomes easier to get to the confirmation page if you know your funds are protected from losing a trip due to illness or if you will be flown in a health emergency while traveling internationally.
“In travel insurance, we don’t see our offer as a simple product, but rather as a solution,” added Atayev. “We seek to understand the characteristics of each trip and each traveler to better understand what concerns they may have throughout their journey to provide the most relevant offer at the time of booking.”
However, it’s not just about monetizing an offer that’s easy to add during the booking process. Atayev explained that it is essential that the recommendation proves its value in the future. “We need to make sure it’s the right solution, so travelers are happy when they really need to use it,” he said. “That makes a difference in the customer experience. Nothing feels better than knowing that the product you bought really made your trip better.”
2. Limit the number of decision points
Upgrade to premium economy class on your flight; book a room with a sea view; pay for your rental car with loyalty rewards points and more; there are so many options for plugins. However, offering too many options carries a great risk: the customer may decide not to make any choice because they are overwhelmed with the number of options.
“While consumers are often seen as wanting more and more control, there is also the heavy burden of decision fatigue that comes with it,” Atayev said. “Faced with too many decisions, consumers often end up abandoning their reservations to take more time to reconsider or look for simpler alternative options.”
With that in mind, Atayev focuses on offering an easy decision-making process that avoids “throwing them down the kitchen sink”. Instead of offering an endless number of options that could hit the mark, he wants to continually experiment and include just a few options, all of which deliver personalized value and ease the decision-making burden on the customer.
3. Let the context of the trip create a deeper sense of personalization
Speaking of personalization, travel brands have been betting big on the concept. However, personalization is not simply about using data from the past to tailor an experience to an individual. Atayev explained that the details surrounding the current booking — the booking window, the time of year of travel, the final destination, the number of travelers on the itinerary, and more — are the main drivers for predicting what customers really want.
“Personalization is not just about the traveler, but also about the context of the trip,” Atayev said. “Traveling with several children? Perhaps placing advanced boarding and extra baggage at the right time in the booking could help reduce some of the stress of seat selection. Long layovers? A perfect time to offer lounge access. Are you staying in the hotel for four nights with children? Perhaps an offer to upgrade to a junior suite with more living space might be an ideal option. ”
4. Always be optimizing
When customers start adding accessories to their carts, it’s not time to celebrate success, it’s time to think about how to continually innovate and improve. Atayev’s team of over 50 optimization experts works diligently, analyzing data and reviewing ancillary adoption rates to understand what matters to customers. In addition, Allianz Partners conducts more than 1,500 marketing experiments each year to fine-tune offer messaging and timing. The results speak for themselves: Allianz Partners generates an average of 18% year-over-year insurance revenue growth for its partners.
“By evolving beyond simple A/B testing, we are able to drive unparalleled revenue growth and improve customer experiences through an advanced ancillary product optimization program that leverages machine learning to quickly implement changes and promote success. faster ‘winning’ bids,” Atayev said. “We constantly review and update experiment ideas based on the results of previous experiments, collaborative ideation, as well as ongoing customer and industry research.”
5. Let customer value drive company revenue
As Atayev’s team analyzes the data to fine-tune complementary offerings, he said they are focused on answering one question: As customer expectations evolve, what can we do to deliver more value?
“Ancillary services are optimally successful when approached through the lens of providing value to the customer first,” added Atayev. “Not only are there short-term benefits to the business, but when you lead with customer experience, it’s easier to drive customer acquisition and lifetime value. Satisfied customers tend to generate more revenue.”
This content was created in collaboration by Allianz Partners and Skift’s branded content studio, SkiftX.