Let’s say you decide to go on a backpacking trip to Europe. What would you pack? Clothes (definitely), toiletries (hopefully), money (a lot given the way the dollar is going these days), travel material (guides, passes, reservations, tickets, etc…), electronics (GSM mobile, cameras + storage, PDA, MP3 players, e-book readers, maybe even a laptop…)
Now, for the last two categories, what if you were able to pack just one item in each category — which would you take? Or better yet, what if your travel information (tickets, guides, etc) were all digital and you could pack it into just one device?
We are definitely heading that way, but I don’t think we are there yet. And while many companies and organizations have websites, support phone numbers, “mobile access,” and other features, I don’t think we have realized how deep the interaction can be.
And that means, that from a commercial angle, we haven’t realized how extensive the cross-selling opportunities are.
Picture this:
- You buy Eurail passes to travel by train. You can already buy your passes electronically. But imagine if you had digital passes that automatically mapped to your passport. Also imagine, if you could buy travel guides, maps, directions, recommendations for hotels, restaurants, and sightseeing, while you were buying your tickets.
Now from a business perspective, if you were a marketing director at Eurail, why wouldn’t you want to sell an integrated device that does just this? You could get a low-end PDA platform ($50-$100 wholesale prices), program static content (or dynamic depending on your comfort level), and voila!, you have a device that markets the product that you just sold (the train ticket/pass), while showcasing your other products as well as promoting the products of your partners.
And if Eurail can do this, why not airlines? Imagine a flight where they hand you a PDA — Mission Impossible style. It contains your boarding pass (for both the departing and return flight), your care rental reservations, your hotel reservations, your sightseeing and nightlife passes, numbers-to-call, information, etc. in one convenient place. It promotes the airline, the airline’s partners, and allows the firm to sell the entire travel experience and not just the fare.
Many people think that this would never work in travel, since most companies in the industry (such as airlines) compete on cost, with very low margins. However, consultants in the industry (or news articles about the industry) will tell you that competing on quality of service, especially in a discretionary-spending field like travel, can be a smart strategy. This is because competing on quality of service often allows you to charge a premium — a premium that ends up being worth the initial cost.
Furthermore, selling an overall package or a digital device suited to the experience where you control the content, allows you to go beyond low-margin services and potentially target higher-margin services. In this case, cross-selling these services actually helps you circumvent the margin pressures of whatever industry you may be in.
