There will be a shift in marketing budgets towards technology that helps travel firms convert their browsers into bookers in the next two years, according to an analytics specialist Cloud IQ.
Speaking during a workshop session at this week’s Travolution Summit, James Critchley, chief executive of Cloud IQ some big players in the travel industry are already increasing sales through conversion rate optimisation.
He claimed just a 0.2% increase in conversion rates amounts to a 10% rise in revenue in a sector that traditionally suffers from very low levels of conversion.
“If we get it right, it will pay for your entire advertising budget,” Critchley said.
“It’s cheaper to convert more customers than acquire more customers and we are now able to look at data in real time and apply intelligence to it.”
Delegates were shown the classic sales funnel which showed how firms interact differently customers at different parts of their journey, typically lasting between three and nine months.
He advised travel firms to use pop-up ‘overlays’. “Done wrong, they look like horrible adverts, but done right they step out of the page at you,” Critchley said.
Later in the sales process, customers can be sent more targeted emails based on information they have already searched for, such as price and availability.
“We pull that information into emails so they continue with their browsing where they left off,” Critchley said.
Pop-ups are an “absolute no” on a customer’s first visit, instead firms should offer visitors the chance to sign up to newsletter or competitions are encouraged, he added.
Once they have built up their package having entered some information, Cloud IQ aims to reduce abandonment rates, which are on average above 90%, by “getting into customers’ pockets”.
Customers are reminded how much work they have already done towards booking their holiday, increasing the chance of completing the transaction rather than going elsewhere.
Cloud IQs head of customer success, Cardavan Serinash, highlighted some of the firm’s success stories in travel.
Destination specialist Alpine Element increased revenue by 4.7% with a click through rate (CTR) of 4.1%, which compares to a 2.2% average in the travel and hospitality sector.
At all-inclusive specialist First Choice, Cloud IQ brought the conversion rate up to 15%, and sister Tui operator Thomson achieved a CTR of 17%.
“It was really important that personalisation was sped up,” said Serinash.
Qbic hotels, meanwhile, saw a 3.44% rise in revenue with a 12% CTR.
“They operate across Europe,” said Serinash. “So it’s a different challenge. It was really important that the search would take the location into consideration so that overlays were created into the relevant language.”
Critchley added customers having great experiences naturally leads to repeat purchases and that $1 spent on conversion rate optimisation (CRO) is the equivalent of spending $100 on advertising as the technology is getting cheaper and more advanced.
Meanwhile, in the last few years the cost per click (CPC) on Google has increased while conversion rates have been going down.
“It’s easy and it’s not expensive,” Critchley said of CRO. “I think budgets are going to shift to convert more traffic rather than drive traffic to websites.”