By Bet Maguire, Senior Analyst, Maxymiser
The cruise and ferry industries may enjoy a different customer profile and face different competitive challenges but there is one underpinning goal that they both share: the sale of ancillary products (from destination excursions to onboard meals) can mean the difference between profit and loss on any single journey.
For the ferry industry, facing up to competition from low cost airlines, coach travel and the Eurostar for French destinations, it has never been more critical to boost onboard revenue; while for cruise companies, offering all inclusive packages and enticing the customer to upgrade is becoming increasingly important.
Across the travel industry there are two key ways of boosting a visitor’s average booking value – increase spend on the core product, in this case the journey or sailing, and upselling ancillaries. But what is the best way of maximising that core spend? And at what stage should companies present ancillary products and services options?
It is clearly essential to explore and optimise the way messaging regarding upgrading fare types is delivered in terms of timing, urgency and persistence. To increase the ABV of the core product, organisations should be looking at optimising the differentiation of fare types, for example by testing the effect of monetary value or benefits led messaging. Alternatively, companies can use ‘nag’ pops up or permanent banners to encourage visitors to upgrade. In most markets cultural preferences will result in measurable differences in results, especially with regards to the tone of the messaging used to promote upgrading.
There are also more implicit ways to increase ABV, for instance companies within the ferry industry who order fare types or ancillaries from most expensive to least expensive have seen an increase in revenue in our experience.
Timing is Everything
When it comes to ancillary revenue, one of the biggest challenges is correctly timing the offer in the booking flow. Getting the right presentation of options to pre-book a table in a ferry restaurant or purchase a ticket for a destination excursion can make a significant difference in uptake – but companies need to get the right balance between pushing the ‘one last chance’ reminders and providing compelling information and visuals of the ancillary offers. Certainly ‘nag’ pop-ups have proved to be very effective in persuading visitors to think again when trying to click through without having selected an extra – but companies need to avoid over-selling and disengaging the customer.
This latter point is key because both ferry and cruise companies have more than one opportunity to make an ancillary sale. Many customers will revisit the site after the initial booking to check information such as departure time and at this stage companies can offer a range of options to be added to the existing journey or package, such as spa treatments for the cruise customer.
Critically, companies can now use the detailed customer information collected during the booking process to create a highly personalised range of offers. For example, ancillaries can be packaged to fit customer demographics, such as families or lone travellers, giving each customer segment an offering that is relevant to them and that they have an affinity with. Alternatively, options can be promoted based on previous purchases or selections, reminding the customer of earlier interests and activities and, for those who travel regularly, a quick and easy booking experience.
It is also essential to consider the changing nature of consumer behaviour. With tablet and mobile traffic already accounting for a significant proportion of visitors, ferry and cruise companies need to adapt optimisation strategies now to start looking at cross-device experiences – especially since ferry companies in particular are lagging behind the rest of the travel sector with respect to this. Test results can differ vastly across devices – in a recent test for one ferry company a variant performed well across both desktop and tablet but the uplift in the primary metric was 46% larger on desktops that on tablets.
Without doubt, 2015 will see an increasing focus on mobile devices – but that should not be the only consideration. When onboard sales can account for around a quarter of total revenue, companies need to consider the way both core products and ancillary options are presented and grasp significant opportunities to boost revenue and improve profitability.