In November 2013, Flybe partnered with Maxymiser to develop a long-term strategy to improve customer experience across its digital channels. The plan helped transform Flybe’s customer engagement with campaign alone providing a catalyst for stunning annualised revenue growth of £8.5 million. This case study looks at how the regional airline achieved success.
The global market for air transport services remains one of the most competitive sectors. With a wide diversity of operators – from major passenger and business class airlines to low-cost, cargo and regional carriers – securing brand differentiation and competitive advantage in a crowded marketplace is a persistent challenge. Although the industry is currently enjoying a resurgence – with the International Air Transport Association forecasting a 50 per cent increase in sector profits in 2014 – airlines remain ever-vulnerable to fuel price hikes that can dismantle profitability, and increase fares, at a stroke. The customer experience can, quite literally, be a bumpy ride.
The airline industry has, like many during the economic downturn, been through a period of characteristic turbulence and consolidation. But, with the internet now firmly established as customers’ preferred channel for travel sales, the most successful airlines are those that have recognised the need to optimise the online experience – and have identified Customer Experience Optimisation (CXO) as a powerful means to differentiate their brands, improve engagement and increase revenues. This has certainly been the case at the UK airline, Flybe, where CXO is helping to transform operations and drive profitability.
A regional brand
Flybe is Europe’s largest independent regional airline. The Exeter-based company, which operates more UK domestic flights than any other airline, provides over 180 routes across 16 European countries. Its brand promise is the provision of ‘regional connectivity’ – linking passengers with major European cities and hubs. This unique proposition means that Flybe’s competitor environment stretches beyond conventional low-cost airlines and extends into the traditional road and rail networks.
Flybe’s latest strapline – ‘Think minutes, not miles’ – is part of a brand refresh that promises to provide customers with ‘the fastest way from A to Flybe.’ And the campaign, which positions the airline as an innovative provider of time-saving travel for business and leisure customers, is just one aspect of a comprehensive turnaround programme that’s already yielded significant growth. It’s a remarkable transformation – and one in which the company’s development of a CXO strategy has played a key contributory role.
The sky’s the limit
In November 2013, Flybe partnered with Maxymiser, the global leader in unified customer experience optimisation, to develop a long-term strategy to improve customer experience across its digital channels. The plan has, very quickly, helped transform Flybe’s customer engagement. One campaign alone has provided a catalyst for stunning annualised revenue growth of £8.5 million. And with longer-term plans to optimise its mobile channels and bring greater personalisation into customer engagement, the company believes that its CXO strategy could play a significant factor in growing incremental revenues.
“Flybe’s digital channels are central to our commercial operations – with 80 per cent of bookings taken online,” says Martin Smith, Marketing Director, Flybe. “It’s therefore crucial that we optimise those channels to improve the customer experience and ‘build consideration’ to increase the likelihood of purchase. One of our key brand objectives is to communicate that we are a regional airline and to sow the seeds of consideration that Flybe presents a viable alternative to road and rail. The optimisation campaigns we are running with Maxymiser is at the heart of that effort. It’s a really focused programme, and it’s systematically helping to improve conversion rates through enhanced customer experience.”
The approach is working. The airline has seen a 6.9 per cent increase in passenger numbers on scheduled UK flights – despite a 1.4 per cent reduction in seat capacity – and has also enjoyed a favourable increase in passenger revenue per seat. So how has optimisation helped?
A sense of urgency
In partnership with Maxymiser, Flybe has developed a roadmap of campaigns across its desktop site with a clear focus on improving conversion. One of its most significant – and successful – early campaigns examined seat availability messaging on the first step of the booking funnel. And it has generated huge revenue gains. “The campaign tested a key business hypothesis: would the addition of ‘urgency messaging’, highlighting to customers when seat availability is getting low, increase customers’ propensity to complete a purchase?” says Martin. “Historically, like many airlines, we had not done any kind of urgency messaging. As a result, customers would only find out that a flight was sold out when they came to the final stage of the checkout. This leads to a poor customer experience and increased drop-outs. So we wanted to understand whether surfacing availability information early in the process would motivate customers to make a quick purchasing decision.”
The campaign examined two presentations – static and flyout – at two different thresholds, highlighting when availability dropped below four and three seats. In each variant, booking conversion and revenue experienced strong and consistent uplifts. But the winning variant delivered staggering outcomes.
“Annualised, the incremental revenue is worth £8.5 million,” says Martin. “That’s a mammoth leap forward for us. This was a straightforward campaign, but it has driven a massive result and underlined – in just one exercise – the value of our relationship with Maxymiser. Equally importantly, it’s demonstrably improved the customer experience. We are now conducting further campaigns to examine whether persisting with the urgency messages throughout the funnel will impact conversion rates.”
Buoyed by such early success, Flybe’s CXO roadmap will eventually see Maxymiser rolled out across the full gamut of digital channels – as well as allowing the company’s internal resources to self-serve ‘softer’ campaigns. “The roadmap has clear objectives and allows for a dual approach. We plan to manage a series of softer tests using Maxymiser’s Visual Campaign Builder (VCB) – which enables us to run our own simple, discrete tests. And, alongside this, we have identified potentially game-changing campaigns that will be handled by Maxymiser’s expert team.”
The company also has major plans to explore mobile and personalisation. “Mobile is a growing part of the business and we need to optimise the experience in a different way from our desktop site. At the moment, around 50 per cent of our travellers are business customers and, as such, the majority of our bookings are still made on desktop – but we are seeing a large increase in tablet bookings and need to focus on this developing trend. Likewise, our long-term goal is to make sure we serve the right products at the right time for the right people – so we’re working on ways that we can personalise the customer experience and assure that relevancy. Maxymiser will play a key role in that effort.”
Journey so far
Flybe’s journey with Maxymiser has been highly positive. “It’s been a really healthy engagement,” says Martin. “The consultancy aspect has worked brilliantly – we work closely with Maxymiser and they provide high-value input into our plans. They advise us on the best methodology and approach to challenge, test and optimise our roadmap. In the process, the Maxymiser team has genuinely become an extension of our team.
“Ultimately, it’s all about the customer experience. We need to ensure we provide the easiest and fastest way for customers to book a flight with us. Maxymiser gives us huge levels of confidence to make changes to that customer journey. That’s why we embrace optimisation. It’s given us incremental revenue and enhanced customer experience. And it’s helping us to meet some of our biggest strategic goals; the brand refresh and the ‘rebirth of the airline’. Maxymiser has been crucial to that.”