The technological advancements have transformed the travel and tourism industry completely. The digital revolution has changed the way people travel. Unlike yesteryears, only 13% of travellers plan their trips through agencies while 74% plan their trips online. These trends only suggest that the customers’ expectations have changed. They look for more immersive experiences.
Through the application of martech, travel brands try to create only the most relevant and meaningful experiences for their users. There are hudreds of websites and other sources customers refer to before initiating their travel plans. As a travel brand, you need to make sure that you are engaging your customers across all touch-points so that you don’t lose them to your competition.
To get a better understanding of what challenges travel marketers face to acquire, engage, and retain users, we had a discussion with Himashu Periwal, ex-Head of Growth at one of the leading online travel platforms in India: ixigo.com.
Himanshu shared really interesting insights on how the application of martech has revolutionized the travel industry, and how does the future look like.
PH: You have been a part of this industry for a while now. I would like to know, what according to you are the key mobile marketing challenges faced by the travel brands in India?
HP: Travel as a category, is considered to be a tough one when you compare it to e-commerce. You will see that the users of the travel apps engage with the app around 2-3 times a year, whereas for e-commerce it is almost 1-2 times a month.
One of the biggest challenges for marketers is, how to keep the audience engaged throughout the year. As a marketer, you need to channel your efforts into keeping the users engaged all-round the year when they aren’t actively using the app. If you fail to do so, then these users might turn into lapsers, which is not something you want.
Another challenge is that the same products like flight fares, hotel bookings, etc. are being sold by over 20 big players in the market at almost comparable prices. So, I ask myself, how do I build user loyalty without giving discounts (which is the easy way out).
Also, the players who have been in this industry for a long time, face the scale challenge. The scaling challenge starts hitting you once you’ve been in the market for a couple of years. The point I am trying to make here is that the size of the market does not increase as much as the competition does and at the end of the day, you are competing for the same wallet share.
PH: Now that we talk of these challenges, I want your views on how the application of Martech in the travel industry and your experience, has evolved over the last 5 years, and how these trends, especially in emerging markets like India, vary from those in the evolved markets.
HP: From what I have seen, the face of this industry has changed completely over the last 5 years. I remember the time when we had to send bulk emails manually, and now they are entirely automated. Push notifications, SMS, WhatsApp – everything can be now sent out through a single app. The tools through which businesses can channel their marketing has evolved big time.
I will quantify this shift through a very simple example.
Earlier, it took around 3 hours to send one mail to the user base. Now, over 100 personalized emails can be sent in a day.
You can see how significant the shift has been, not only for the marketers but also for the users, who now experience more meaningful engagements.
If I talk about India specifically, a lot of interesting trends have emerged. Leisure travel has increased over the last 4-5 years. Even international travel is on the rise. Solo travel is also increasing big time. Earlier people traveled for business purposes or to meet their families during vacations but now the reason for traveling has shifted more towards adventure trips and visiting popular landmarks.
The last observation I would like to make in regards to India is that Indians are yet to catch up with the West in terms of the duration of their trips. Indians still travel for 5-6 days on an average while the trips of western travellers lasts for around 2 weeks.
The travel segment continues to expand and a major reason attributed to this expansion is that Indians currently spend approximately 11% of their total disposable income on travel – Increase in spending on travel.
PH: From a marketer’s point of view, could you tell me how the conversion funnel or buyer journey in the travel industry looks like?
HP: There’s a simple way to explain this concept. The user funnel can be segregated into 5 major buckets:
- Acquisition – How to acquire the users, be it their first app installation or first visit to your website.
- Activation – As soon as the user does the first registration or a flight/hotel search we understand that the user has activated himself/herself on the app.
- Retention – Let’s say the user has tapped on the first two buckets. Now it becomes important to track when the user comes back to the app. There is a period of say 30-45 days and if within that time, the user does not come back to the app then you can consider that user to have churned out.
This is also actually the ideal time around which you should start planning your engagement campaigns to retain your users.
- Referral – The best way to understand is to know that a satisfied user is your biggest advocate. When users are happy with your product or service, they tend to share information about your app with others. In Ixigo, I have seen that the majority of the users are acquired through sharing the link of the app. This is thus an important bucket.
- Revenue – The last bucket, becomes the most important bucket for businesses. This shows how well you can upsell and cross-sell and monetize more. You need to be able to increase ARPU (Average Revenue per User) for your travel app or website.
If any part of this funnel leaks, then it’s your revenue that will take a hit. The critical point here is to analyze your users’ movement in this funnel and be able to understand what kind of revenue you will eventually make.
PH: Building on the previous question, can you tell our audience about the key metrics you would want to track in the conversion funnel?
HP: Going by the funnel again:
- Acquisition: If you are acquiring users from performance/paid marketing then you take Cost per Order as the metric. You track the Cap for the overall users, including discounts, etc and you divide that by the total number of users, to get the individual cap.
- Activation: If you are tracking registrations, then your metric would be the app launch to the registrations ratio.
- Retention: There are retention rate apps available which help you track this particular part of the funnel. Users usually take 10-15 days to make their booking after searching. This is a general trend globally. In India, this time period seems to decrease as the last moment travels have increased. You track these revisit and open rates.
- Referral: A common metric for this is to track the % of referral users against total users.
- Revenue: Well, this is the most important bucket to track. You can track the average order value, revenue from upsell and cross-sell and many more ways. But what you need to ensure is that you track it across different platforms like your website and app and also across different verticals like flight and hotel bookings.
PH: Based on your experience in this industry, what are the most effective channels of user engagement that you would recommend to the marketers?
HP: Talking about organic marketing/e-marketing, the most effective ones are WhatsApp and email as they have the highest open rate.
Many believe that e-mails might not be a good enough channel in today’s world. This might be true in cases where company’s send generalised mails that don’t appeal to the customers. But for us, we send only personalized mails and not bulk mails and this is precisely the reason why emails fetch high open-rates for us.
I consider WhatsApp to be the best channel as it is not cluttered like others and it does not allow any promotional messages to be sent. Your communication on Whatsapp is specific to transactions and that makes it a very effective channel.
In the case of In-app and Push notifications, they are highly effective due to high ROI, but again, you have to be very cautious with this because I have seen a lot of users churn out due to excessive communication. You need to avoid creating brand dissonance in the hope of getting more users.
PH: What would be some of the user retention hacks that have worked for you in the past?
HP: In the travel domain the biggest hack is your product or product feature that drives user engagement and retention, making you the preferred travel app. Everyone is offering the same product and more or less at the same price. So in such a market scenario your product feature becomes your driving factor to retain your users.
Another hack that has worked very well for us, is doing analytics on users like a frequency analysis and see when will the 50th percentile of users start churning out and that’s when we implement our engagement campaigns to ensure that we don’t end up losing out on customers.
Lastly, a hack which I would say is more on the commercial side, you just simply ensure that you have always put some money in the users’ app wallet. Our users would always have some Ixigo money in their wallets. Customers don’t want to uninstall the app then because they are price-conscious and this works in your favor.
PH: Would you like to share some tips on how to go about evolving and succeeding in this market which has become extremely data-driven?
HP: The moment you start working on problems keeping data in mind, you’ve crossed half of the hurdles.
I think 50 % of the problem is solved when you simply become data-driven in your approach.
But at the same time, you need to ensure that you’re capturing the right set of data and information. Your CRM tools will have several properties. Say, for a flight search there are n number of properties like international, domestic, etc. So you need to be able to understand which are the relevant properties you should inform your users about. And then you do analytics on those.
To conclude, my advice is that you need to keep experimenting constantly. It will help you come up with innovations and help you solve user problems in a better way. The moment you stop experimenting, that is when a new start-up or an existing player will take your place in the market. Innovation in this domain is the way forward.
Well, talking to industry practitioners gives real insights into how technology shapes businesses. After this episode, we can safely say that technology has seeped deep into the travel industry. Brands today are using all tools and technologies at their disposal to emerge as winners in this cut-throat competition of gaining a loyal user base. While the application of Martech has its own set of challenges, marketers are putting their best foot forward to tackle them. This episode gives us a clear idea of what the customer journey looks like, and what strategies are businesses adopting, to engage and retain their customers.
Check out Netcore Smartech’s Travel Solutions here.
This blog post has been repurposed from our podcast series ‘The MarTechno Beat, titled The Secret Recipe for 10X Travel App Growth at Ixigo.com. This post includes key insights shared in the podcast along with some additional information.