Some months ago SAS began looking at its ancillary services and the revenue it was deriving from them. The airline set itself a target of doubling ancillary sales by 2020.
As a starting point, SAS decided to work with the Amadeus Accenture Alliance to look at his ancillary sales and focus in on an element – in this case seat sales – to see what could be improved.
The airline noticed its premium seating was not at the same level as not only other airlines but also its other ancillaries. It decided to run a pilot scheme using its data and running experiments for three weeks around adjusting its prices up and down. It then analysed the impact on purchasing behaviour with a view to achieving the optimal pricing for seats but still ensuring customer satisfaction.
According to SAS Kati Andersson, vice president of digital sales and distribution, over the course of 12 weeks the airline “figured out the problem, analysed the data, ran tests and decided what parameters to use to change prices”.
“The day after we implemented the solution the money went up.”
The airline saw an uplift in revenue of 14.5% as a result of the project.
Andersson says it was a completely different way of working for SAS and will now form part of its path towards greater personalisation.
“We have also started our journey on NdC which will be a huge transformation and we’re hoping to bring all this together in terms of being able to personalise the ancillary offer and based on what we have learned with the seats.
“The method could be used in the future. We all believe in these big trends but it is important to do things here and now and to do small things because not everything works and you might end up doing it differently.”
On the SAS pilot, Robert Booth, head of marketing, airline offer suite, Amadeus, says:
“It was a case of understanding the different cohorts, how they value their seat and pricing accordingly.”
He believes that airline merchandising is not only about technology but also “a way of thinking.”
SAS wasn’t the only airline to embark on a development sprint using the Amadeus Accenture partnership. Finnair also considered a number of projects from loyalty to managing travel documents and inflight communications between crew and passengers as well as crew-to-crew.
After deliberation, Finnair decided to work on a project to helping crew improve communications with each other because it felt it already had ongoing customer experience initiatives. It also wanted to build on its initiative of providing iPhones to crew. Tiina Vesterinen, director customer experience development for Finnair, says:
“Wanted to be very focused to achieve something tangible that we could drive forward, that we would also utilise the existing technology we had built and be ambitious enough and find something new.”
Vesterinen says the company went through a four-day design sprint which included two cabin crew members.
“It’s important to have a wide set of views and experiences when developing something that is this new and ambitious. We utilised existing data and insight from other industries to look at the painpoints in the customer journey.
“We looked the the technology and what might be possible and then started doing the ideation. The facilitation at the Innovation Hub was very good They made sure we were focused because it can be so inspiring that you start to go around and forget the idea you came up with.”
Finnair developed “quick, rough prototypes” for both the crew to passenger and crew-to-crew concepts and tested them with potential customers. It was the “Digital Napkin” that went forward borrowing from the idea that cabin crew already use paper napkins to communicate with each other.
The airline will now go back and look again at the customer communications concept. Accoding to Andrea Marazzi head of the Amadeus Accenture Alliance, with these kind of sprint developments, most carriers go for concepts with short-term benefits.
“It’s the mentality but after some time airlines are coming back to say let’s reuse some of those other ideas.”
The one theme running through the initiatives from both airlines is to try something new, do it quickly and learn from it.
Speaking at the recent Amadeus Airline Executive Summit, the distrbution giant’s senior vice president for airlines R&D Christophe Bousqet, said long projects are out, sprints are in.
“You now need to deliver value after two months, do AB testing and then do something else.”
* Reporter’s attendance at the Airline Executive Summit was supported by Amadeus *