Guest Post: How airlines are creating win-win offers

Rich Kassner, director product strategy at ATPCO, gives us the low down on why it's a no longer about the lowest price - content is key

Most people today rely on the internet for their flight shopping and have long been overwhelmed by a large volume of offers that don’t always meet their needs. The need to filter, search further and scan to find the right offer for them, still persists. Go to a website for two different airlines, or even on a third-party aggregator website and it can be difficult to determine that the one flight that may be a few hundred dollars more, might deliver a far superior product and experience like baggage allowance, lie-flat seats for a long-haul flight, included meals, entertainment and Wi-Fi.  

This period of flight shopping blindness is thankfully coming to an end, and it couldn’t happen sooner. Our recent research finds that 86% of flight shoppers will pay more for seats that meet their preferences, but they need to understand what is being offered, via the right content before they’ll pay. Things like images of the seat, 360-degree videos of the plane, and descriptions of ancillaries like meals and baggage allowances help shoppers quickly narrow in on the best value for them. 

Look back decades ago, the only variable other than cabin class was price, and it was hard for airlines to have varied pricing because flight experiences were relatively similar. Since then, airlines have used many variables to determine different prices from legroom to seat location, but lacked the tools to help flight shoppers make the best decision. Today, the technology is there to create content-rich shopping experiences, and everyone benefits as a result.  

The future of more targeted offers is a win-win 

For airlines, showcasing the many attributes of the more varied and expanding flight experience is the next phase in a long process to deliver the right offer to the right person, at the right time, during their flight shopping experience. 

Until recently, Airlines’ flights were viewed mostly as a commodity, with little difference in passenger experience. In the past, airlines, GDSs and other partners only had three elements to show passengers to make decisions: schedule, cabin and price. They did what they could to present offers with these limited deciding factors. Over time, a focus on a more elevated flight shopping experience and ancillaries like checked bags, onboard refreshments, paid seats and extra legroom as part of the offer gave consumers more choice. Rather than only focusing on price, consumers can look at what they get based on what they pay.  

Imagine a shopper searching for a flight 10-15 years ago, which would have only shown variations in schedule and price. Now, consumers can make a purchase decision based on a bundled deal or a variety of factors or services that matter to them. If one flight offer or bundle includes more leg room and Wi-Fi for only $90 more a passenger may be enticed to take a later flight, freeing up room on a potentially high-demand flight, when in the past they would have had no easy way of selecting the right flight based on those ancillary differences. . Now consumers can compare options to match their personal preference while also helping airlines manage capacity and demand across flights. 

Looking ahead to the future of airline retailing customer experiences, airlines can focus not only on optimizing their single ticket price, but also delivering the optimal product for the consumer. 

Focusing on choice with content 

For anyone not convinced that elements other than price matter to consumers, consider basic economy. If everyone were driven purely by the lowest price, everyone would select basic economy seats. However, our study finds that 83% of shoppers have paid to select a seat while booking, showcasing that the lowest price is no longer what consumers look for. Airlines offer Basic Economy to give price-oriented customers what they want. Economy passengers interested in more choice have a variety of options from added leg room to the ability to check more bags, to priority check in, to the ability to pre-select their seats rather than waiting until check-in, now have that choice. Airlines have the option to offer various choices such as a branded fare bundle or individual purchase at an additional fee and passengers can make their selection based on what is the best value offer for their personal experience.   

Consider that lie-flat seat on a long-haul flight. If a shopper goes to a travel website and doesn’t see any image of the lie-flat seat, maybe not even a text description of it, there is little to entice them to choose an upgraded experience or choose one airline over another. Or if shopping on an aggregator website, not seeing the comparison of products from content can drive shoppers to the lower price, while not truly understanding their options or the flight experience, they may be paying for.  

Creating an experience that not only showcases the benefits of choosing different upgrades, but also the reality of choosing the less pricey options gives shoppers what they need to make the right choice for what they see as the best value for them. It also ensures that they won’t be surprised when they get to the gate and they find, for example they need to pay for a bag or they can’t sit together on the plane, which can improve overall customer satisfaction. 

Dynamic offers - From generic to personal 

Today, “dynamic offers” is a better way to think about maximizing flight shopping. Given that flights are not all generic, and experience can vary widely, airlines need to consider merging their pricing and content strategies into one that considers the entire offer. 

When airlines assemble offers that are priced right and showcase the right content and deliver the attributes that customers want, not only are customers happy and more likely to remain loyal, but airlines are truly able to optimize their revenue opportunity in the short term and for the “long haul.”