Amsterdam Airport: time to leave the country! This time not for work but for a once in a life time experience: travelling the world for the next 9 to 12 months together with my wife. Exploring culture, nature and the theme park industry on the other side of the world.
We are heading to the KLM lounge to get some drinks prior boarding. Nothing special to post about the lounge since all services are complementary. Once on 33.000 feet after our breakfast KLM started to increase the Average Transaction Value with their inflight shopping program: Sky High Collection. I fly frequently with KLM and used to see the shopping cart being pushed through the isle after the announcement via the speakers. I always wondered what the average spend onboard was. Actually I still do since I have never seen any passenger purchasing a Mont Blanc watch or KLM merchandise. Of course I have seen passengers on flights like Ryan Air or Air Asia spending on board but that was on food.
Sky High Collection
What was new to me was 5 minutes prior the mobile shop was operational 1 flight attendant handed out a post card with a discount voucher for FREE. And we all know what that means for the Dutch… If it is FREE I am interested. Turns out to be a discount voucher to be used for the Sky High Collection. Thought it was a good way to increase the attention for the shopping program. And maybe a lucky shot but I actually saw 2 shopping bags passing by. Curious to know what the result is of this action. Did it increase ATV or was there no change? If the ATV did not increased than probably there will be a negative impact on the GP% unless KLM increased the retail prices!
When in Asia I fly a lot with Air Asia and despite the tickets are relatively cheap compared to ‘all-in’ airlines like KLM you could massively increase the cost of your journey. Budget airlines like Air Asia are great examples on how upsell should be done. Let me just take you through an example process:
- The add-ons whilst booking: seat selection, luggage, meals, hotel.
- Upsell at the check in: luggage
- Upsell and advertisement on board: advertisement at the seat in front of you, food and non-food offered by the flight attendants during the flight. (Mostly the advertisements are about ticket promotions.
- Cross sales: attraction tickets & transportation upon landing.
- Once at the bus you will be asked if you are interested in a city transportation card including the return journey to the airport.
It is obvious the ATV on board is much higher than KLM because:
- On a flight of 2 hours you want to have a drink (because of the habit, time of the flight or you are just being bored)
- Usually you will fly with checked luggage as a tourist and as a local you know the overhead compartments are full within a second.
- Tourists are most likely in need of transport and willing to discover touristic attractions. And looking for a convenient way of travelling. Budget travelers are mostly well prepared and are aware of the cost of transportation. Price fighters like AirAsia are mostly cheaper so it is a good value for money.
Guest Experience effect
Like illustrated in in the Guest Experience journey it starts with communication, creating awareness what to expect when using the service of an airline like KLM or AirAsia. Through the booking process all prices are clearly communicated including terms and conditions. However if you are used to fly with KLM on a company card and now looking for the cheapest tickets as possible at Ryan Air, Easy Jet or Air Asia you can be fairly disappointed when you expect the same conditions when flying for your company. However this will be made very clear in the price difference. Why would you pay for something you don’t use? You’d better pay for service you will use! Or is there an opportunity now to exceed expectations for low-cost airlines? In terms of customer service I find crew members of KLM more focused on hospitality and the planes in better condition than Easy Jet or Ryan Air. I believe this is caused by the time pressure on the crew of the budget airlines (often need to prepare and board guests within 30 minutes) and guest mix (budget travellers packing everything in their hand luggage creating full overhead lockers). Once in the air crew needs to start selling before landing which will affect guest service. KLM crew members operate the same however having more time (at least my perception) to prepare and board passengers and selling the Sky High Collection, however no bonus points will be earned because we expect this hospitality due the price we paid. From my own experience crew is always polite and on multiple flights I experienced to see cabin crew socialize with passengers. The way KLM is aiming to take care of its passengers before and after flights is good. 24/7 you can contact the customer service team through Facebook, Twitter and LinkedIn. Despite the fact we should aim to be perfect, we can’t always manage expectations particularly if we rely on third parties. Of course there will be delays and luggage can be missing. So choose carefully who you corporate with, sometimes it is worthy to invest a little bit more in services…
How do you increase the average transaction value?