Ancillary Revenue Squared

 

The sweeping uptake of smartphones in recent years is having a profound effect on the way we travel – not only in terms of facilitating advance research and booking, but also in enhancing the travelling experience itself, by helping us locate highly rated restaurants, hotels and activities. And lets not forget NFC (near field communication), meaning mobile content exchange and new contactless payment mechanisms are available to travel providers. 

 

The dependence on advancing mobile technology provides the perfect opportunity for the travel sector to make customers more profitable while making their trips even more enjoyable. How? Well, as Google discovered in a recent survey, smartphone users are active and highly committed. They search locally and, once they’ve found what they’re looking for, act quickly. In fact, an impressive nine out of 10 smartphone searches end in an action. So, feed these users the kind of data they want, when they want it, and you can be pretty sure they’ll bite.

 

However, it’s not just Google’s monumental foothold in search advertising that has been tickled by smartphone user productivity. The brand wants to satisfy consumer desire for simplicity by synchronising everything in our wallets into one tidy virtual space, and thanks to NFC capabilities, with one single app, they can. "Eventually your loyalty cards, gift cards, receipts, boarding passes, tickets, even your keys will be seamlessly synced to your wallet. And every offer and loyalty point will be redeemed automatically with a single tap via NFC.” According to Juniper Research, 1 in 5 smartphones will feature NFC technology by 2014.

 

The possibilities for boosting ancillary revenue via contactless payments are hugely exciting. Mobile payments provide an ideal opportunity for two-way digital communication. With one simple ‘tap’ transaction, you make a payment and receive back “coupons, receipts, loyalty points and warranty programs” in an instant: a process, which saves time, money, and resources for customers and retailers alike.

 

Far more valuable than existing digital vouchers, these coupons will be highly specified thanks to the reams of real-time data provided about individual consumer spending habits through every payment. And from there, retailers can develop the kind of sophisticated multi-channel strategies – already in place with loyalty card programmes – that cover mobile, social and in-store campaigns: the fundamental difference being that with NFC this process can be more streamlined and, most importantly, contextual.

 

Context is the key issue here. The boon isn't in taking over your credit card, loyalty card, or payments: it’s in the ability to monopolise your messaging – with relevant and timely data of mutual benefit. If done correctly and with due respect to trust and privacy, this concept will seamlessly merge servicing experience and information around payment – rather than just search – functionality, driving action and potentially transaction, at the exact moment it is relevant.

 

Mobile servicing is clearly the principal way to add real value and not just cost to your customers’ travel experiences. However, the opportunity for profiting from smartphone travel applications extends far beyond targeted vouchers: as contextual search, offers and payment systems become more advanced, the sophisticated approach to ancillary revenue – namely, developing long-term, sustainable relationships with customers and boosting revenues by maximising new and existing ancillary revenue opportunities – becomes more possible. 

 

The future of ancillary revenue will be based on the internet, location marketing and mobile servicing. In view of the momentum gaining around smartphone technology, Latitude’s Development team has been investing in the mobile functionality required to boost customer activity and profitability, including compressing data, using location, sharing and mobile bar-codes/transaction, and more, as demonstrated by our Benefits Plus Travel, CompleteSki and Fly&Share apps.

 

Kevan Christmas, Digital and Mobile Consultant, The Collinson Group

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