We all know the feeling – and it can be an uncomfortable one. You set a goal to get more bookings directly through the web and you’ve worked diligently to put in place essential levers to see to this outcome.
The commercial-web-system-levers include, but are not limited to:
– Mobile optimised web and booking engine experiences
– Your web I.P. Control switching from “Point of Sale” to “Point of Origin” (so customers in all markets can see when you’re “on sale” and purchase)
– Your homepage loads in a reasonable amount of time
– The search panel is easy to find and use
– Product merchandising is inclusive and clear
– Prices are correct
– (Web) prices are parity with other channels (not necessarily cheaper)
– The payment system is tightly integrated and robust
The marketing-levers you’ve also put in place include (again not limited to):
– Augmenting your marketing mix to include digital channels you can pause or shift spend on
– Growing the size of your email/customer database/s
– Increased direct to consumer marketing investment
– Strengthened messages and stronger call to actions
– You’ve also done a decent job at properly configuring web analytics so that you can accurately measure activity and performance to make informed decisions. Well done.
But what do you see?
You can see direct traffic to your web has increased, yet the % of direct sales in your business hasn’t changed – in fact, despite all the above, % of direct bookings are the same or they may even have decreased.
What on earth is going on? It just doesn’t add up – or does it?
By simply taking a holistic look down from (36,000 feet) above, at your product offering and what confronts customers wanting to purchase and experience what you provide, a “reality-check” (on those once strong convictions that you can shift more business direct) may envelope you, due to the underlying causal drivers for channel preferences in play – particularly if you are in the travel / tourism sector. The reality check is such that you may realise you were swimming against the tide all along.
Why is the (indirect) tide so strong to swim against – and what can you do about it?
What this article shares are the cumulation of personal experiences and conversations with many industry peers faced with the same targets and challenges. Between us we’ve spent millions on direct to consumer marketing, developed apps and unrolled online technological utility to have more consumers shopping online – with still only marginal gains in the % (value) of direct bookings.
But as the old saying goes, a problem well defined is a problem half solved, which means, it may be that we simply need to change our way of thinking (as to what one should expect). The one point this article drives home, however, is not to hold the % of direct bookings (going up) as the single KPI on whether your marketing plans, activities and spend is working or not.
Part I: Understanding the current channel mix causal drivers
The below is just a few considerations when trying to understand why so many bookings are culminating via indirect sales channels despite all your efforts to sway them direct…
– Variances in incentives, commissions, net rates, over-rides to your agents, wholesalers, OTAs etc (in the periods you’re comparing channel mix performance)?
– Variances in where your customers originate from? How many of them are Long Haul as opposed to Short Haul? And has that % mix changed year-on-year? SH and LH guests can possess varying comfort levels booking online as opposed to a travel agent to “take care of everything”.
– Your product offering may be just a small part of the total choices your prospect must research, compare and purchase. To ‘experience’ a trip, there is a lot to arrange and trust you’re making the right decision (more than just getting the best price on an aircraft seat or hotel). Therefore, the core value proposition of travel agencies and wholesalers are strong.
– Your website is not just a sales channel (for ‘taking orders’) but also a marketing channel (for equipping prospects with relevant information). To do as it should do, with the latter, means, your web is always going to send prospects (it “assists”) to the sales channels they are most comfortable with to purchase, despite the fact your website has a big BOOK NOW button on it. Did your BOOK NOW button organise your prospect’s last trip to Antarctica (with a bucket of Moet in their room waiting on arrival)?
– Whilst your website might be doing a great job at merchandising your product, your customer is still faced with unbundling the other travel products they need to purchase to experience the outcome they desire, one by one, should they choose to book the components you provide (only) on your website. Some people may opt to do this. However, most people most likely won’t. Not just because of the ease of getting all-inclusive packages elsewhere but also because:
– With all-inclusive packages, consumers often suspect they are getting the best deal too (a sense of a bargain) – and often, they are
So, a combination of the above are undoubtedly the causal drivers to why you’re not seeing a bigger shift to direct bookings flowing through in line with the increased direct traffic your marketing is successfully delivering. But it doesn’t mean your direct to consumer marketing mix (of activities) and spend is NOT working – in fact, it could be working far better than you realise.
Part II: So what actions may stimulate more direct bookings?
Follows is a list of initiatives you could implement – some of them may make you cringe, granted:
1. Offer the full ‘package’. It sounds audacious, I know. But there’s a reason why airlines offer “packaged holidays” – to increase their own direct channel shift grab (and pay out less in distribution and commission charges)
2. Price Match/Beat Guarantees (openly published and advertised on your website) – but tread wearily, % discounts (“Beat Guarantees”) can add up to more than the distribution & commissions you pay elsewhere
3. Coupon / Promo Codes that are applicable only for Web/Res Centre channel bookings
4. Exclusive rates accessible via your direct channels only
5. Post-purchase trigger emails (to all guests, no matter sales channel origin) with bounce-back discounts to entice repeat bookings direct
^^ Trigger emails to guests allow for more discreet promotion of the above initiatives
6. Offer alternative payments in terms of Debit not just Visa, Pay Pal, and even Book and Hold
7. Abandon Shopping Cart solutions to prospects who were in the direct shopping/IBE flow but abandoned and likely to convert with an agent/wholesaler unless you can bring them back
8. Ramp up your Loyalty & Retention Marketing to your customer/transactional database (not just your email subscribers)
Food For Thought
– More direct traffic (from your offline and online mix) is likely why your indirect sales are increasing at the rate they are – not just why you’re seeing more direct channel sales
– % values/KPIs on your channel mix can often conceal actual growth (of total sales)
– Don’t try to shift channels until you have undertaken a well – defined Channel Mix Analysis (of the channels giving you the most revenue and profits). It may be that your direct channels are costlier than you think – in short
-Demand is finite, not infinite; which normally means if you’re seeing more bookings in one direct channel it is likely taking bookings away from another direct channel
So long as more direct traffic volume is arriving at your (web) door, is the main thing. Lead generation is the one directly tangible, measurable outcome of marketing. Where those leads book, however, is beyond the influence of Marketing messages and call to actions – especially when you are not prepared to articulate provocative reasons for prospects to book direct with you and spin your sales distribution on its head.
Don’t chuck your marketing plans and spend out the window because of nil shift from indirect to direct; so long as your marketing efforts are increasing more direct traffic, the size of your (total sales) pie, is most likely being supported from your marketing investment.
As opposed to channel shift, it should be more about adopting specific strategies to grow different channels at different rates. You could be averting your business (and stakeholders) from unnecessary channel conflict.
We might want customers to behave in a way that saves us money – but they don’t respond that way. Consumers trust people (for intangible products/services especially). If you’re going to get them to purchase through the web channel for these things, more often than not they’ll only do so for intrinsic reasons.