In the travel industry, e-commerce teams are often juggling selling multiple products - flights, hotels, travel insurance and ground transportation - and spend considerable time comparing individual products from multiple vendors. To successfully deal with ancillary product vendors, there are important considerations to bear in mind and questions that are key to ask.
1. How does the ancillary product align with my overall business strategy and product flow?
Let’s imagine your local pharmacy began offering you DIY power tools at the checkout counter. Would you feel they had your best interest at heart? Businesses spend a huge amount of effort in building consumer trust and loyalty. Misaligning products and services with customer expectations is a sure way of losing hard earned trust. Before deciding on an ancillary product, it is vital to know what is relevant to its intended customers. Begin by asking: is the product a fit for my prospective customer’s needs? Should the product be offered at the top of the funnel, mid funnel or as a post-purchase suggestion? Does the specific product align properly with your buyer personas? How do your customers react when offered another product immediately after buying from you? Is this something that should be included in email series or in-path integration?
Having a portfolio of aligned, well-timed products is important. Just like how a restaurant offers appetizers before a main course or a sherbet after the main dish. Determining when to introduce the ancillary product into the purchase cycle is crucial.
2. How will my customers be supported?
It is crucial that vendors answer this question satisfactorily. Start with your customers first – their needs, demands, welfare, benefit – everything related to providing them an excellent customer service and experience. Things should go right the first time; the first impression lasts.
Determine other customer-focused factors you would like to consider. For example, language. Will they be able to cater to customers who speak a different language? Will language barriers be an issue?
You may also take into consideration the location. How far is your ancillary vendor from the local airport? Will they be able to service the customers on time due to their proximity to the service point? How about their operation hours? Will they be able to cater to the customers even beyond their standard operational hours?
Also, consider checking their reviews or feedback to help give you an idea on how they may possibly service your customers. It pays to do your research prior to making a decision.
3. Show me the money?
Gone are the days when ancillary products were only aspects for brand differentiation. Ancillary departments are facing tremendous pressure to prove returns on ancillary product investments. Ask your ancillary service provider why they, as a business, would like you to utilize the product. If they are supplying, say, to the airline business, just how much profit are they expecting to earn by delivering the specific product? This will help give you an expected range of how this product can help boost the aviation business’ profit.
To create a sustainable ancillary revenue model, profit cannot be ignored. Ancillary vendors and airlines grow together once they close the deal which could possibly mean long-term relationships; however, if the vendor is unable to forecast themselves growing with the airline in terms of financial gain and aesthetic aspects which involves customer satisfaction, it could mean difficulty meeting the business’ objectives and potential conflicts.
4. How complex is the implementation?
The actual incorporation of the product to the business depends on the complexity of the implementation process. Does the implementation require time and money? Were there any upfront fees involved? If so, have these been properly incorporated into the contract? Take into consideration as well if you have set deadlines for the implementation. Are you waiting for the implementation to be completed before the peak season? Do you wish to have it completed probably three months before the year ends to make way for a fresher start for the airline for the following year? And if your ancillary vendors are able to meet set deadlines, you’re on the road to finding yourself a keeper.