How to increase revenue with up-sell and cross-sell in the travel sector? When you travel, what inspires your next destination, and how do you choose the right accommodation, where to eat when you get there, which activities you can’t miss? And, when you get home (or even during the trip), how will you share your experience with friends and family?
Now, think about how all of the above might have happened 20 years ago, even five or 10 years ago (for example, in all likelihood, you did not have Instagram in 2014).
This gives you an idea of the level of change that the Travel & Tourism industry has experienced and is experiencing currently, and it all starts from digital transformation. This is the point of origin of the revolution (read more about the impact of digital transformation on the sector in this article).
Today, we no longer make choices solely based on the suggestions of the hotel concierge or the travel agency. Several very popular platforms exist, such as Booking, Expedia and Airbnb (to name a few), that base their success on simplicity and on the endless audience they intercept. In this way, users become the first marketing agents, through their reviews; from consumer, we have all turned into prosumers.
In addition, there are new industry applications and start-ups, there are travel influencers. Destinations have multiplied and travel has become something that is increasingly tailored to the traveller, both for individuals or families.
As a result, the industry is healthier than ever.
According to the latest data from the United Nations World Tourism Organization (UNWTO), the number of tourists in the world in 2017 was about 1.4 billion, representing an annual increase of 7%; in other words 98 million more people travelling, in just one year. For perspective, consider that there were around 400 million tourists in 1990, around 700 million in 2000, and around 900 million in 2010.
Continued growth is expected for the sector.
Consider China, which will be the largest tourist basin of tomorrow. Where there were “just” 10.5 million Chinese tourists in the world in 2000, today they are ten times more, about 150 million, and are responsible for about $2.7 billion dollars in spending (source).
Consider also that this is only those citizens who own a passport, just 7% of the total population.
The war for attention
We have seen how the tourism sector has changed radically, how healthy it is, and the bright future ahead.
The playing field, therefore, is larger than ever, and the downside – for those involved in marketing and customer care – is that the challenge for capturing the attention of potential customers is very complicated. Even more difficult—aiming at customer loyalty.
So, do brands start?
Having a recognizable brand identity, of course, is essential. Putting the best possible storytelling strategy to work is another must (as we talk about in more detail here). Brands also must take into account the fact that the branch that attracts the most attention today is about “experiences” (which, by their nature, have an enormous need for the right narrative).
But all of this may not be enough given the size and speed of the market. And it’s certainly not enough to be the loudest voice.
The road to winning attention, and then loyalty, has a name: personalization. Personalization is about addressing each person in the most “intimate” way possible (a whisper in the ear vs. a shout), with an eye toward one-to-one dialogue that is as tailor-made as possible.
This ancient mode is now once again the frontier, thanks to the most modern digital tools. And it is the key to aiming for loyalty and for effectively staging upselling and cross-selling activities.
Here is some data to keep in mind, which has universal value for the business world (especially for digital): Amazon attributes as much as 35% of its revenue to its cross-selling and upselling strategies.
What is upselling and cross-selling?
Beyond the technical language, the answer is actually quite simple. Think about what happens when you order a sandwich at McDonald’s. The cashier will most likely ask you if you’d like, for a few cents extra, to add fries with your order. It’s one of the best-known examples of cross-selling, one that has served the company well, for decades.
In short, cross-selling techniques are aimed at selling products related to those that the customer already owns, or is about to buy.
The up-sell is often confused with the cross-sell, but there are decisive differences. The up-sell, in fact, is used to sell a higher and more expensive version of a product (or experience) that the customer already has, or again, is about to buy. The famous “premium” versions, in short.
According to Forrester Research, cross-selling and upselling techniques account for between 10% and 30% (on average) of e-commerce site revenues. These are impressive figures.
And now let’s focus on the tourism sector with an example: JetBlue has made a surplus of $140 million with its upselling program called “Even More Space.” Lufthansa has also achieved important results with “Premium Economy” (which even takes advantage of virtual reality).
Both cross-selling and upselling have one main objective: to bring additional value and opportunities to the customer.
These are techniques to be handled with care. The key to success lies in knowing as much as possible “who” your customers are, how they behave, what they want, what they’re looking for, and, above all, what they might look for or want.
3 tips to increase revenue with up-sell and cross-sell actions in the travel sector
Here is what you need to know to increase revenue with up-sell and cross-sell actions for your business.
1. Pay attention to the customer journey
The first step to increase revenue with up-sell and cross-sell is to analyze your customer’s journey. In the Travel sector, this is more than ever a digital journey.
Research by the Politecnico di Milano, in collaboration with Doxa, revealed that 88% of tourists are looking for information and 82% book or buy something (accommodation, transportation, or activities at their destination) online. Moreover, during the travel phase, 44% of the sample analyzed purchases some activities online and 86% use applications, once at the destination, to support the experience. Then, there is the whole post-travel phase, where sharing one’s experience is increasingly important (in this sense, just take into account the overwhelming success of social networks such as Instagram).
At this point, the approach that must be taken to analyze the data of this intricate digital journey must be absolutely omnichannel.
Only in this way can we have a complete overview of the interests and behaviors of the person we are addressing and how these behaviors are expressed on different channels.
2. Segment the audience
Each customer is unique, and some customers may have many characteristics and behaviors in common.
Dividing your audience into segments of people sharing the same characteristics can have a positive impact on every marketing and customer service strategy, including upselling and cross-selling. This is what you call a data-driven approach, based on the enormous amount of data collected from an omnichannel perspective, as referenced in the point above.
Therefore, it is a matter of organizing this information, interpreting it according to functional parameters, and dividing the target into increasingly specific and dynamic clusters (this is why we prefer to talk about “smart data” or “deep data” rather than just “big data”).
In this way, purchase advice, related products, cross-selling and upselling actions become increasingly targeted and effective.
Knowing the profiles of travellers allows you to propose, for example, the right experience to the right person, in the right place, and at the right time. The same applies to the possibility of providing tailor-made premium packages or offering special deals on new trips based on previous ones.
But can we go beyond segmentation and really get to the individual person with his individual characteristics and desires? The answer today is yes, especially in customer care, which is the real arena for upselling or cross-selling.
3. Going as far as personalization – The case of Club Family Hotel
Communicating with each person in a different way, depending on their characteristics, is one of the most effective techniques marketers can employ.
Such techniques are made possible by the most advanced technologies. Services such as those offered by Doxee, which makes personalization and a customer-oriented approach the center of its business, allow you to tailor messages to each individual user and establish one-to-one dialogue.
Let’s look at a case study.
Club Family Hotel is an important Italian hotel chain whose target audience is families with children.
Using Doxee Pvideo®, the brand created a personalized email campaign consisting of engaging videos tailored to each individual recipient based on their needs, characteristics, and past behaviors.
The results? A 5% increase in the conversion rate and a click-through rate that saw an 81% surge.
Do you want to learn more?