Jeroen Hurkmans: Stacking up choice: supermarket tactics for travel

05 December 2018
Jeroen HurkmansVice President EMEA/ APACAdvito

Product placement and signage means buyers wouldn't have to restrict product choice

The travel industry is experiencing rapid change, thanks to new technology coming at us from all angles. Corporations are trying to keep pace with many implementing dynamic performance management methods to save money in their travel programmes. But the programmes need travellers to be compliant to work effectively.

Some lessons learned from the supermarket industry, which uses merchandising tactics to convince people to buy what they want them to buy, are helping corporations change traveller behaviour for significant savings. In the following article, I’ll discuss how the following supermarket merchandising methods can apply to our industry, including:

  • Place items at shoppers’ eye level where they’re more easily spotted and placed in the cart
  • Create elaborate signs and place them near specific products to entice shoppers
  • Change the layout of the products so people consider buying something they hadn’t noticed before

When traveller behavior takes a bite out of savings

It’s pretty straightforward that great negotiated rates go unrealised if travellers don’t choose the right options. That’s reason enough to help company travellers make better choices.

Additionally, traveller behaviour can impact the bottom line in another way: it can decrease negotiation power. Often, companies find they have no leverage to negotiate savings because their travellers continue to book vendors who do not offer savings or whose discounted rooms are unavailable.

But if companies influence travellers away from problematic suppliers, they create leverage in negotiations with suppliers.

Product placement in OBTs

Companies can successfully guide their travellers with tactics driven by these goals:

  1. Make it appealing to travellers to make the right choice
  2. Earn traveller trust (so they continue to use company system and make the right choices)

Traditionally, many companies don’t include flights and hotels they don’t want their travellers to book. When the travellers use the company’s online booking tool (OBT) and the flight or hotel they want isn’t there, they lose trust in the company. In many cases, they will book the flights or hotels in a non-compliant manner. The additional downside is that travellers are not tracked and will negatively impact the duty of care of their travellers.

In other cases, non-preferred vendors are included in the OBT, marked as non-preferred and moved to the bottom of the list. As there is no background information, people learn to just scroll down, find what they want and book it.

When you’re at the grocery store, the store wants you to buy particular products. Do they pull everything else from the shelves? No. They sell value items, premium items and everything in between. But they merchandise the items they want shoppers to buy. The items they want shoppers to pick up and put in their carts are at eye level. The items they’d want you to consider next are a little higher than eye level. And the ones they’ll make the least profit margin on the bottom shelves. Shoppers can get to them if they think to look down, and they’ll also have to do some work – bend their knees and lift – to put those items in their cart.

The question is: how do you take your online booking tool and merchandise it to bring relevant information at the right time to help your travellers to make a good choice?

Transparency, satisfaction and trust

Often travellers don’t comply with company policy because they don’t know it or they don’t understand it. Companies can use OBTs to help merchandise what they want travellers to do in the spirit of transparency.

For example, when an airline or property isn’t offering real value, a company removes the vendor from the preferred list. Of course the company’s travellers don’t know the background. They only know their hotel or airline of choice is no longer preferred and they will often book it anyway.

With merchandising, you can use messaging to inform and influence the travellers into steering clear of the wrong choices. In the case of a non-preferred vendor, a message with words and symbols could appear, such as:

[YELLOW WARNING SYMBOL] “This option breaks one or more company travel rules. We will log this choice if you choose to purchase it. Hotel rate is greater than or equal to $300.”

- and -

“Please do not book this property at this time. We removed this vendor from our programme because they did not offer rooms at discounted rate.”

In the travel industry, we know people are looking to outside booking tools. Data shows 78% of corporate travellers use leisure sites to research because they find value or lower rates.

When companies provide all of the choices with contextual information, travellers feel more satisfied. One of our clients, LinkedIn, achieved an 84% rate of satisfaction. That higher rate of satisfaction led to higher trust, higher compliance and higher savings.

Signage to create a sense of community or a fear of missing out

Companies can also merchandise the choices they want employees to make based on social decisions or fear of loss. Just like in the previous examples, messaging can be delivered in relation to vendor listings.

Messages based on what their peers are doing give travellers a reason to choose what is best for the company. Here is an example of some verbiage a company could include on a preferred hotel or airline:

[STAR SYMBOL] “This is the most popular hotel in your programme”

These messages play on a sense of community. It’s proven that people choose online reviews like they trust recommendations from a friend. When a traveller sees that a choice is accepted by colleagues, they’re more likely to make that choice.

In addition to creating a sense of acceptance for a traveller’s choices, messages can also spur an opposite feeling: the fear of missing out. Other types of messaging can create a sense of urgency because of the possibility of losing a good deal because everyone else is booking the same choice, with messages like:

“80% of your colleagues have booked this hotel”

A combination of social proofing tactics and fear of loss tactics can help travellers move forward with booking in a way that’s good for the company.

Call-outs, banners and infographics for better outcomes

But it also helps if a decision makes sense for the traveller themselves. Data shows that 45% of travellers make a decision that increases productivity. Companies can use information that would give a traveler a more productive experience to bring attention to a preferred vendor.

For example, a detailed infographic might show two sides of a math problem, with the preferred hotel rate and non-preferred hotel rate showing as equal at $150 per night. However, the preferred hotel includes free Wi-Fi, free breakfast and free parking at a total rate of $150 per night. The non-preferred hotel offers $20 Wi-Fi, $20 breakfast and $20 parking at a total rate of $210 per night. That’s a fast, easy-to-read equation presented in an attractive manner that’s hard for a traveller to argue with.

Spice up your messaging

Traditionally, a company will mark a hotel preferred in its OBT and move it to the top of the list. We often see where an independent property and chain will be clustered together with multiple selections that are all preferred. There’s no separation of what is a better choice based on market search or individual country or airline. And nothing changes until the next sourcing season.

In supermarket merchandising, there’s value in fresh messaging and even new store layouts. How many times does a supermarket change its advertised sales price or even move the merchandise? Different layouts and different messaging gets shoppers’ attention so they’ll consider buying something they hadn’t noticed before.

This can be applied to travel management programmes. The fresher a company’s messaging, the more likely a traveller will notice it and be influenced by it. If a message is left alone too long, it will become stale and travellers begin to disregard it.

With dynamic performance management driving more savings in our industry than ever before, companies are monitoring, renegotiating and sometimes changing preferred properties or airlines on a monthly basis. New hotels are added and there are black-out periods throughout the year. As things change and preferred vendors are renegotiated, it’s important to make travellers aware of how their decisions have an impact on the programme.

Merchandising works hand-in-hand with dynamic performance management to help travellers understand what’s best for their company.

At a time of industry change, we often discuss how to embrace new technology and use it to its fullest. It’s also helpful to revisit great lessons from other industries; in this case, what shapes our own decisions every moment we spend walking the aisles of our own supermarkets.

Keep up to date with our Weekly Insight email every Thursday

Register Here