Tour and Attraction operations have dramatically shifted over the past 18 months to a heavier reliance on digital systems. Operators who have embraced this change will come out ahead of those who are slower to implement a digital strategy. A recent study from Arival showed that ticket sales have shifted from 28% online pre-pandemic to now reach 47%. This trend will continue, and will be permanent.
Tour operators have an opportunity to take advantage of the technology that’s available to increase sales and customer spending as their online ticketing contributes a greater share of their overall revenue.
To illustrate this point, it’s no secret that airline revenue dropped precipitously in 2020, however a recent report from Skift showed a surprising and inspiring statistic:
In an industry record, four budget airlines generated more revenue from ancillaries than they did from ticket sales in 2020. More importantly, ancillary revenue grew across all of the largest airlines last year despite the crisis.
Taking cues from the airline industry and digital retailers, the bottom line is that tour and attraction operators need to be thinking about their digital strategy, and utilize the proven sales tactics that have propelled the eCommerce industry to such rapid growth.
It’s time to get creative: Your customer is buying a ticket – plus what?
Driving ticket buyers toward relevant, add-on items like gift shop retail, food and beverage combos, insurance, parking, or a VIP premium package are well known ways a tour or attraction can increase their average order value.
For inspiration, here are a few well-known tactics, with high profile examples, that can be implemented easily through a modern ticketing software provider like RocketRez.
The classic Upsell is suggesting a higher priced item that provides your customer with additional value – a better version of the same product, at an incremental cost increase, which improves your margins.
Upselling is easy to implement. Simply present additional product options during the online checkout process. Without changing your current operations, you can create tiers of services and experiment with pricing to arrive at your optimal profit level.
There are three things to keep in mind as you create an upselling strategy. First, the upsell must be subtle and realistic. The budget must be within a reasonable range of the initial purchase intent. Second, you must be upselling a product that has already been selling well. The goal is to build on the momentum of your core product. Finally, the key is timing. Upsells are best presented when your buyer has already committed to a purchase, so all you need to do is get them to spend a little more to receive more value from their purchase.
To use a popular example, McDonald’s had a successful upselling strategy by allowing customers to Supersize their meal. So successful, in fact, that a nutrition documentary caused a PR backlash – and they stopped using the term altogether.
A common upsell we see is an option to upgrade tickets to a special offer right before checkout. In an attraction setting, this is often a longer, VIP experience with exclusive access to different areas of a venue. In a tour setting, this is often more choice of luxury options in seat selection. In both cases separating this customer from the general crowd for a private experience adds to the allure – and perceived value.
Cross selling is suggesting a complementary product, meant to enhance the experience of the original purchase. It is equally simple to implement and equally as effective for increasing order value. Over time it has been proven to drive great results for your business:
Pros of Cross-Selling
Back to McDonald’s, perhaps the most famous cross sell in the world is a simple question - “would you like fries with that?”. McDonalds has made many millions of dollars over the years through cross selling everything from plastic toys to apple pie, so it should be no surprise that they paid a large sum to acquire a company that uses artificial intelligence to offer relevant upsells in every self-service kiosk.
The technology is powerful enough to make very relevant suggestions, and the user interface reminds customers of an Amazon-style ecommerce checkout.
“The digital menu boards offer a personalized customer experience, such as suggesting an add-on item to go with a customer’s current selections. Menu boards can also show food items based on time of day, weather, current restaurant traffic and trending menu items at specific locations, McDonald’s said. “This will enable McDonald's to be one of the first companies to integrate decision technology into the customer point of sale at a brick-and-mortar location,” the company said.”
The masters of increasing order value are the folks at Apple. They are upselling and cross-selling at every step of the buying process – whether it’s choosing the storage capacity for your iPad, screen size, cellular connectivity, add-on pencil, keyboard and chargers. And once you get through all of that, they hit you with the Apple Care. Their efforts were rewarded - as of 2019, this was a significant contributor to the company’s bottom line:
“Apple makes a LOT of money from upselling consumers to higher storage configurations in its products – in fact, we estimate that Apple will generate $18B in revenues [at ~90% Gross Margins] from upselling consumers … in FY 19 – contributing roughly 26% of total company operating profit.”
Tour and Attraction operators have just as much opportunity to cross-sell other offerings. Many of our customers offer add-ons like paying for parking, or pre-ordering food and beverages when they buy their tickets. Customers love to know that parking is taken care of and they don’t have to stress about it when they arrive, or that they’ll have food ready for them as they head to their seats. It’s a win for the operator because it increases the value of each client, and allows them to better predict inventory they’ll need for that day.
One of the most effective ways to add value in your customers’ eyes is to put several items together in a bundle. A bundle is most effective when it includes items that are complementary to each other – so much that it is likely the customer would buy the additional items on their own.
The convenience of buying all items in one checkout is often enough to drive a regularly priced purchase, however depending on your profit structure it may make sense to experiment with discounting the bundle beneath the total cost if you purchased items individually.
Once again, McDonald’s is another shining example of bundling a burger, fries, and drink together for a complete meal.
Amazon is also known for using its extensive customer data to put together great bundles that are proposed at the customer checkout screen, often prompting shoppers that others have purchased these items together in the past. The added element of social proof only adds to the momentum towards increased order value.
In order to make sure that your upselling and cross selling efforts are effective, you must ensure they are simple and relevant. The key is to have your customer make a quick decision as they are checking out. A customer is unlikely to convert for an additional offer if they need to research what it entails, if it’s expensive or if it does not fit within the context of the first purchase.
Using the well-researched principles of modern eCommerce, combined with a modern ticketing software designed to drive additional revenue, you can make meaningful additions to your bottom line.
How often do you pick up a pack of gum or a chocolate bar as you stand in line at the grocery store checkout?
Displaying simple, low-cost items at the moment of checkout can capitalize on impulse buying behavior and turn out to be a significant driver of incremental revenue. Try experimenting with items from your gift shop.