This interview is part of our exclusive ‘Airline Leaders Series,’ conducted in collaboration with Branchspace – digital reinvented, aiming to transform airlines into better digital retailers. Throughout the series, we’ll highlight the key concepts that are shaping modern airline digital retailing, ensuring you gain valuable insights from each discussion.
Leader: Adrian Keating
Airline: PLAY Airlines
Role:
Location: UK and Iceland
Talks about: Retailing, Profitability, Digital Customer Acquisition, Conversion Rate Optimization, Digital Tools
Why do you need to read this interview:
Adrian is a distinguished commercial leader renowned for his profound expertise in digital retailing. Adrian’s understanding goes beyond what is typically seen in senior or C-Level airline commercial leaders, showcasing an in-depth knowledge of digital marketing, conversion rate optimization (CRO), and user experience (UX). In a clear, step-by-step breakdown, he meticulously unravels their digital retail strategy and initiatives, offering a valuable framework for any airline digital leader eager to master the nuances of digital retailing. Adrian embodies a breath of fresh air in modern airline commerce, combining digital savviness with an in-depth understanding of all key elements of digital retailing. This interview is a must-read for those looking to gain insights from a leader who’s truly at the forefront of digital innovation in the airline industry.
Adrian: Just as a brief background, PLAY are just over two years old, so in terms of our goal for this year, it’s profitability at a very, very high level. And in getting there, it’s crucial that we ensure that our digital landscape and our retailing and our customer experience is as best in class as it can be at this stage of our journey.
For me, being part of the commercial unit within PLAY, the profitability goal is linked to everything that we do from a customer standpoint and everything that we’re putting forward to them in the digital landscape. What I mean by that is in order to achieve profitability, we have goals and objectives across digital and across ecommerce that are integral to hitting that overall company objective.
What we’re doing right now, and have been doing over the last six to nine months, is really focusing on our digital retailing approach – and I can go into details into that later – but also, crucially, around customer acquisition and ensuring that we’re getting the right customers into the booking funnel and having the best chance of conversion.
So it’s a real holistic approach to acquisition, digital retailing, and conversion rate optimization. And lots of different parameters that fall within that. For me, it’s ensuring that the business as PLAY have a real focus in that area, because if we get that area right, we have more chance of hitting the profitability goal. So that for us is crucial. And then of course, driving awareness of the airline across the different markets is relevant to all of that as well. Yeah, our digital landscape is huge to that profitability.
Adrian: I’ve got quite a few that I can run through with you. They all interlink and interact with each other. One of the first is the focus on customer acquisition. We as an airline do not have the marketing funds that some of the competitors we face have. We don’t have some of the marketing funds that some of the big OTAs have. So what we need to do is work smarter with the funding that we do have to acquire customers, but crucially, ensure that they convert.
So customer acquisition is massive for us. We have really, really good internal data and BI. It’s updated every 15 minutes, which as an airline guy, that’s great. It’s also really advanced compared to some other airlines that we compete with and that we’re up against.
Also, as part of the customer acquisition, we’re using tools and partners that can help us. We cannot build our tech stack on our own, so as part of the acquisition, we’re working with partners like EveryMundo to deliver real-time pricing into our ads and make sure we can target the right customers in the right place with the right pricing at the right time across the network. That’s what’s really crucial. We need to make sure the customer acquisition strategy is proficient across all of our markets. So that’s one.
The second one is also related to acquisition as well. We made a change in 2023 to change agency, and we have gone with an agency that has experience with ULCCs and low-cost carriers in the U.S. and in Europe. That was really crucial for us because of the way that our airline is set up, with our hub in Iceland, and transferring traffic through that hub via Iceland when you originate in U.S. or in Europe. So part of this strategy was changing the agency. It was to ensure that we can optimize the spend. Again, we don’t have huge pots of money, but what we do have, we need to make sure we use it efficiently and really robustly.
What I’m really keen to ensure is that we don’t use a one-size-fits-all approach in every market because that does not work. Customer behavior is very different in Germany to the U.S. to Denmark, so we need to make sure that we tailor our approach in each of the markets as well.
That then goes on to the customer behavior piece and what we’re looking at. We’ve spent a huge amount of 2023 looking at, okay, who are our customers and how do they behave in the individual markets? But crucially, how do they behave on our website? Where are the areas of friction? What and when are customers doing when they get onto our website? Where are they leaving? Why are they leaving? What rage clicks are they leaving on the payment page that we don’t know about?
We’ve spent a lot of time looking at how we can develop how we understand our customer in the tech stack and in the booking flow. We’ve started to implement, and have implemented since the back end of last year, another partner called FullStory, which will allow us to watch and view customers real-time on our websites in the different markets to understand where we’re having problems and why people are leaving the booking funnel. So that’s a really key piece for us.
But crucially, it allows us commercially to work with our development teams to make quick decisions and changes. And that means – I can never understand development teams and commercial teams that make decisions without the data. They’re not informed. It’s a gut feeling, it’s “I think we should do this.” What we’re trying to do at PLAY is totally reverse that and make all of the decisions based on being informed and understanding what the customer behavior is, and having partners like FullStory enables us to do that.
The second piece on customer behavior is ensuring that we’re using tools, again, that can optimize the customer journey and retarget customers that we’re losing. Because we will inevitably lose customers. What we want to do is ensure that any customers we’re getting onto the website, we can retarget successfully with the right messaging at the right time, depending on where we lost them in the booking funnel. We can understand when we’ve lost them in the booking funnel with FullStory, and we’re also working with a partner called Braze that will allow us to be really robust in our messaging to those consumers that we want to retarget for who we lost.
When did we lose them? What was the friction point? And then crucially, what messaging do we need to give? If we lost them at the bundle stage or the adding bag stage, maybe it’s because they were unhappy with the price. Maybe they were unhappy with the user experience at that stage. If we lost them at the payment page, is it because we haven’t offered them the relevant payment that they’d like in that country? Or is it just because they were unhappy with the experience up until that point? We’re starting to learn that at a really granular level. So that’s really key as well.
But crucially, it allows us to also drive the average basket value per passenger beyond the initial purchase. There’s acquiring and retargeting the passenger when we’ve lost them, but this piece of technology also allows us to merchandise and retail post-booking. For those passengers that convert, this piece of technology allows us to continuously sell throughout the customer journey.
We’re a low-cost carrier; we typically sell at a lower price, but what we want to do is drive that basket value throughout the customer journey. If the passenger’s booked five months in advance, we have five months of retailing. But that’s up until departure. We also then have an opportunity beyond that. I think that’s really key, and again, we’re using partners to do that.
I’ve got two or three other points that are relevant to the acquisition and the customer behavior. It falls into our CRO, our conversion rate optimization. Everything that we’re learning from the acquisition and the behavior allows our CRO teams and our developers to make more informed decisions, but crucially, it allows us to run multiple tests at once because we’re continuously learning. The objective there is a little bit – when we look at the Diggintravel surveys every year, you can see you’re at certain stages as an airline. We want to be beyond Stage 3 and above. That’s the objective. We want to be running multiple tests every week, every month, in every market to try and drive the conversions. And that is where we’re really benefiting from the focus on acquisition and behavior, in the CRO piece.
And then the last bit in terms of the current initiatives is tailoring the local websites to the local behaviors from all of the learnings that we get. We have started towards the back end of 2023 to create local market websites. What I mean by that is ensuring that we have the right messaging, the right routes, the right payments for the right customer in the right market. Our CRO department and area of the business has allowed us to make informed decisions when doing that because we’re starting to be able to tailor everything correctly in the right market.
So that’s what the key initiatives are, and the real surgical focus is to then ultimately help with conversion, and that ultimately helps with that profitability piece.
Source: PLAY Airlines website
Adrian: I have a slightly different viewpoint on the emerging technologies. There’s no doubt that there’s some great tools out there that we should be reviewing and always looking at, 100%. But I think crucially for PLAY, but also for other airlines – and I never understand why other airlines don’t focus on this – there are many opportunities to focus on excelling in the basics of retailing and acquisition. And I think fundamentally, a lot of people are looking so far ahead that they’re missing the opportunities that are in front of us right now.
I think that really is a key message: focus on doing the basics really, really well, and then you’ll incrementally get better as you add things on. My message to any of the other commercial leaders in aviation is do the basics really well and be really proficient, and then add, and then add. Don’t go from a relic of retailing and try and be a leader, because you won’t get there. It has to be progressive. It gives you that incremental gain.
In terms of the emergent technologies, for us also as PLAY, we are focused on being best in class at what we do with the basics, and then add and then add. And that’s actually what we’ve done in 2023. We took a real step back and said, “Right, what are we missing? We don’t understand what our customers are doing. Okay, now we do. We don’t understand because we’re not doing enough testing on what’s happening with our website. Now we do. We can’t retarget our passengers because of XYZ. Now we can.” We’ve gone through a really methodical approach of how we can make the incremental gains without spending huge amounts of money, which is important to us as an airline, but being able to do things really quickly and at speed.
My key thing there is focus on excelling in the basics and doing it really well. I think that is the key message. The other things around that I would say are constantly iterate with what we’ve got already.
Don’t try and reinvent the wheel. What I mean by that is we don’t always all have to look for the golden egg. You, as I said before, have some fantastic people from all different areas in the industry that come on and speak and give their views and thoughts, and I think what’s really good about that is just take bits. Take the best bits from everyone. No one has to be coming up with the newest ideas. As an industry, we’ll do that individually, and then just take bits from others that work really well. I think that would be a key message to people as well: learn from who we think are best in class already and just take it. Then that will allow us to do things quicker as well.
One other thing I would say that I think is really, really important for airlines – and again, this doesn’t cost any money, this doesn’t mean we have to get the latest technology – is have dedicated teams for this. Forget about the newest technology; what about the best people dedicated to commercial, to drive that performance? I actually think that’s what a lot of commercial teams within aviation and airlines miss, which is a real shame because airlines have huge amounts of data, huge amounts of traffic, and we should be the best at this. But we are not committed in the area enough to be.
What I mean by that is there’s huge other industries that we look at and say, “They’re really, really good.” Well, guess what? They’re really good because they dedicate teams to commercial success, and we don’t seem to have got there as an industry yet. So I would say that actually, it’s not necessarily about what’s coming in the future; it’s making the most of what we’ve got now and reframing it with different optics. And I think we can be really, really good.
Adrian: I think the industry as a whole need to be comfortable being uncomfortable. What I mean by that is, we should question commercial, and everyone within commercial and the industry should question everything. Be positively disruptive every day. Why are we doing that? Who decided to do that, on what basis? Is there a way we can do it differently? I think what you’ll find is the answer is yes, there’s always a way we can do it differently, and it can be better, but we need to be comfortable in having those conversations and not just accepting the status quo.
And that applies to every type of airline – national airlines, legacy airlines, low-cost carriers, full-service carriers. I think the biggest challenge for airlines is ourselves, actually. The margins are so, so slim that we are afraid to deviate from the status quo. And actually, I think the opportunity is so big for us to drive the margins higher that if we did take a step back and we did realign our thinking around retailing and driving sales, we would become a much more profitable industry.
So the biggest challenge actually, I think, Iztok, is ourselves, is the industry as a whole. I think we leave a lot of money and revenue on the floor that we’re not picking up. The sad thing about that is there’s lots of really, really aggressive, innovative companies that are in the travel vertical which are picking it up for us. I think we have to change that.
I think the industry in 2024 and beyond is going to continue to recover. We’re going to continue to see numbers traveling. I don’t think that will be a problem. We’ve obviously got the usual economic, political, environmental stuff, which isn’t going to change, but we can change and reframe what we do. I think that is the biggest piece. We just need to be a bit more surgical and focus on what we can do and having the autonomy to do it.
Adrian: I think it’s a combination of the two. As airlines, we don’t want to increase our cost base unnecessarily, but I do think that in order to become best in class at the basics, we do need to invest in people who understand how to do that. And I am not sure that, as an industry, we are focused on CRO, website optimization, retailing. I don’t think we have that dedication. Some airlines do. Some of the lower cost airlines focus on that completely, and that’s why they make money. Billions.
When you look at the profitability of airlines, there is a commonality, generally, in the threads if you exclude the big U.S. three, and that is generally that they are very, very good at selling across their digital platforms. That is not a coincidence. That is because they have that as part of their DNA. It’s part of what they do every day. I think there is much more opportunity for other airlines to become profitable if they also focused on that. And I think that is where the focus needs to be for the majority of airlines. There needs to be an incubator of commercial where they consistently drive performance through sales. I think if you walk into the majority of airline head offices, that is missing right now.
Adrian: I think it will split. You’re going to get people that are going to take this approach and excel, and ultimately they will drive the profitability higher. You will get other airlines that will rely on third-party partners to sell for them and do the retailing for them, and ultimately, as a result, they will have really small margins still and they will be heavily relying on other people to determine their future commercial success.
I think you’re going to have a real split, and the split will come down to the appetite commercially to drive the business forward as a modern airline in the commercial space. I think that’s what the future will be. You’ll have the leaders and the laggards and there’ll be a big spattering in between. But for me, there is no option. You have to be a leader in this area. And again, that doesn’t mean huge investment. That doesn’t mean having to reinvent the wheel. Be best at the basics and copy what the really good guys do already, and you’ll find those gains are huge.
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Anne Marie Tseung
Many thanks Iztok and Adrian. It has been a pleasure to read this interview. i was so happy to share with my ex colleagues, who as you mention are ‘dedicated to their job and skilled with experience. No need for an airline to re invent the wheel, show appreciation and look for the leaders within and hear what they can share to ensure company”s profitability. Know your custoemrs to ensure sales and make the most of new technologies to enhance value added. Thank you Anne Marie