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Developing Effective Offer Marketing Strategies that Convert in Today’s Competitive Market

In the dynamic landscape of the airline industry, effective offer marketing strategies are essential for sustained growth and competitiveness. From leveraging data analytics to personalize offers, to harnessing the power of digital channels for targeted outreach, this session will cover actionable strategies to enhance customer engagement, drive acquisition, and ultimately, boost revenue for airlines in today's fiercely competitive market.

Full Transcript

Alfonso Ramirez: Hello? Hello. Okay, we're going to start. Thank you everyone for being here. I know it's already a little bit late in the day. Everyone has been going from one room to another, but I hope that even though it's a little bit of late, you can enjoy this. I have the pleasure to be here today with two great customers, but also people that I have the pleasure to interact in these past few days. So first I have Ross from United, and Yonghwa from Korean Air. I'll let them introduce a little bit before I get into that, you have heard a lot these days and you will continue hearing about how Offer Marketing products are helping airlines to evolve their marketing strategies, and you heard recently about how it helps a CEO. You had heard how we are bringing a lot of personalization into the product. So why we're doing this, our ultimate goal is that our partners can use the weapons to develop their strategies that ultimately convert.

Alfonso Ramirez: So today we're going to talk a little bit of areas from how competitive the market is today, how they're leveraging the technology, what's next, what are the pain points that they have done it. And I'm trying to focus not only on a particular product itself. You can see that the technology can tackle different angles. We often get the questions like, oh, well, but these technology is being used by a lot of airlines. Yes, that's right. But you can see that the usage, the use cases and the pain points can be limitless, right? There's a lot of areas how creative you can get, how you can leverage the technology to do that. So today, Ross and Yonghwa will help us talk a little about that. So without further ado, can you guys introduce a little bit yourselves and and we can kick it off?
Park YongHwa: Sure. Thank you so much for inviting me. I'm Yonghwa Park working in Korean Air. I started my career in this company in 2007. So it's been 17 years and currently I am doing the digital marketing. My team name is online search team. So we are doing the digital marketing the performance based marketing, campaigns and activities. And I also have some background in the revenue management side. So I am kind of very familiar with the PROS product and things like that. So it was great experience to be participating in this great event. And thank you so much for inviting and give me the chance to talk. So thank you so much.

Ross Schmadebeck: Good afternoon. My name is Ross Schmadebeck, from United Airlines, manager of our digital personalization operations. I've been at United a little over two years. Our team currently sits within our loyalty department, and we manage all of the customer facing experiences from a personalization perspective, whether using or the United App, our team facilitates the targeted content you'll receive throughout your customer journey and leveraging machine learning to enhance that experience. Thank you very much for the invite. We use Offer Marketing as part of the PROS platform to deliver the right price at the right time through several external channels. And it really does help us amplify targeted messaging and targeted marketing when needed.

Alfonso Ramirez: Well, thank you very much. And again, it's a pleasure to be here with you. For those who know me, I'm Poncho, Alfonso, same person. I've been, well everyone the 12 years now PROS and, I've seen... I have... For me it's very compelling to see how technology has evolved and where it will take us on the next stage. So we talked about this dynamic landscape, right? And before we get into that, I want to make sure that everyone here will agree that it's a very competitive market, right? I know that every airline in every market it's trying to find ways to capture that customer. So can you guys give us a little bit of your lesson or your experience of how you guys are doing these days? Or what are the things that it's a key factor for you guys to make sure that are competing in this market? So maybe Ross you can start and...

Ross Schmadebeck: Sure. So United has... Our CEO's mission of growing to be the biggest and best airline in the industry, which is a pretty powerful statement. It means that we're expanding in current markets as well as developing into new markets. For us the approach hasn't really changed. It's delivering the right message at the right time to the customer, where they are in that journey. Whether that might be a premium product like our premium plus mid cap and our Polaris, or providing the right price for that last minute trip that you want to book. For us, it's really been making sure that the customer receives the right message with that right price point that they feel confident in purchasing with us throughout their entire journey.

Park YongHwa: So for me, I am working Korean Air and the revenue of the international lines takes around like more than 90%. So, we necessarily have to focus on the international line, the sales. And when it comes to international lines, I will say like generally speaking, like maybe like 50% to 60% will be coming from the home market and the rest of them will be coming from the foreign market. So, when it comes to foreign marketing, you typically don't have the brand power that you usually enjoy in your home market. And also you don't have the loyalty program that will be appealing to the customer. So how we can do our digital marketing and increase the sale just in that perspective. So we are watching, just a lot of sales going on, but. So we tend to be sort of relying on the indirect distribution channel, so that we can reach out to the customers that we cannot reach in that like, foreign country.

Park YongHwa: So, but nowadays with the development of all the digital technology and things like that, so we watch, we see where the customer is coming from. And then for us, we see like more than 70% of the customers are coming from the search engine to our web. So the search engine is just is very important. So we are investing a lot of our budget into SEO and SEM programs as well as we are rolling out the EveryMundo's platform which is the Fare Marketing platform. And we are not just focusing on just, our like native language, like the Korean language and the English language, but we are rolling out all the 13 language that we are serving on our homepage. So, in that way we may reach out to... We can do... We can serve some customers in a foreign country. Yeah.

Alfonso Ramirez: Yeah and I think that's a good say about, you mentioned about the importance of owning that customer. And we are going to get into a world of cookie less, right? And how the importance of the data that we own or the airline owns needs to come from that direction also. That's why these days... And Ross, you can talk a little bit about that. How United's prioritizing bringing that data, so be able to use it and therefore define those strategies to convert later with that own data that you guys are getting.

Ross Schmadebeck: So, first party data is becoming ever more critical in our business, whether that's forecasting for network or planning, pricing, or even my area digital marketing. For us, first party data is critical. We use it every single day in making decisions, whether it's within our machine learning or to make sure you get the right message about your upcoming trip to London. I can't undersell the value of this data that we all have. It is first party government verified data that we can use. The challenge is understanding it, stitching it together, and knowing what you can do with it. For us, that's been something we've tackled for more than 15 years, and we are continuing to evolve that to ensure that we not only continue to collect the right data, but we use it effectively and efficiently to continue to grow our business.

Alfonso Ramirez: And maybe, on the APAC side of things, right? Like I know, you come from Korea, you represent the flagship airline from Korea. What are those difference? How that you can tell us that you see in APAC that potentially can defer a little bit from, you know, carriers, or the rest of the world, these days?

Park YongHwa: Yeah. So I think, the APAC region, which include a lot of East Asia and the Southeastern Asia countries, I think from my perspective, we are like more sensitive to the pricing. So, when I see other airlines in the monitoring and we benchmark every airlines as far as far as we can. And when I see how the other airlines are doing in terms of the marketing, I can see a lot of promotion is going on and from our company case, my team has our discretionary pricing, just, right, so that we can do, whatever necessary promotions, on our homepage, by our judgment. So, yeap. And then, when it comes to the like advertising and the digital marketing channel, we are witnessing a lot of like locally, like super apps are like becoming big player.

Park YongHwa: So in the last decade, I would say we have to be using other like specific, advertising channel, through maybe, like, other, smaller players. But now it is integrating more, to the, like a big player, like a Grab, in the Southeast Asian countries and The Baidu channel in the China and the neighbor and Kaico in Korea. So, those like big players channels will be very, kind of crucial for us to be doing our advertising campaign. But at the same time, it's straight up, right? I mean, we are investing sort of potentially like, kind of, adverse area or like a relation, right? They may have their power to help the customers, right? They have... They can control the potential customers so that we may be paying more, adding sort of thing too. So like balancing it, how much we are investing in our other channels and our first party data, and then our sources. Then that aspect would be important.

Alfonso Ramirez: Perfect. So I think this is a good segue about the question, like if Offer Marketing, it's a must or a nice to have, right? And I think you mentioned one key thing, like, okay, how I deliver the right message for the right customer for the price point, not only in my home market, but in the global market, right? So I think that's our key, value proposition about how Offer Marketing is becoming a must. And maybe, Ross you said that that's a must this day instead of a nice to have. And can you walk us a little bit of how that has become a fundamental aspect in the, I guess, DNA of of United these days?

Ross Schmadebeck: It's definitely in our consideration set every time we launch a digital campaign. We've done a little bit of restructuring and reorganizing as a team. But the good news is that Offer Marketing is always on our radar. Understanding what the needs of that route, that region, that network, helps us really understand where we can bring this tool to life. We launch campaigns regularly. The team's actively working on one as I chat, to really help amplify that message. Because if we provide you with this beautiful creative about this wonderful destination. And it's at a price point that when you click through isn't there, or you don't see anymore, you lose trust in that customer, they're not going to believe you anymore. They're not going to open that next email. They're not going to keep you in that consideration set for their next adventure.

Ross Schmadebeck: So for us, it's both promoting a destination, allowing us to market a route that needs a little extra help or even a new route as we expand our network, but also retargeting customers, keeping those people who've raised their hand but haven't crossed the line. Really getting them to push them into that purchase behavior and then helping them enhance their overall experience.

Alfonso Ramirez: Yeah, and I think, Yonghwa you're... In our case, we just launched the Fare Marketing platform with Korean. And maybe, can you elaborate a little bit what was the... What was the reason that you guys said, okay, "We need to do this"? Like, you mentioned a very important thing about price sensitivity. Was that the... One of the key motivators or there's another reasons of why because of the challenges you were facing? Offer Marketing again, becomes a must and not a nice to have as maybe some airlines believe so.

Park Yonghwa: Yeah. So, we have enrolled, we have launched our, the EveryMundo page back in this March. So we are relatively new customers to PROS and EveryMundo. So the reason why we are like doing this activity was I think basically, it is basic, right? I mean when it comes to the SEO we have to have some of the tools that will enable us to be more fast, faster, and reach out to other reason with less resource, obviously relatively less resource. So, back in the day when we want to try to publish some of the new fares to our customers we needed to talk with our technicians and developers how to create some pages and how we can deliver that information, making some emails, things like that.

Park YongHwa: So it took a while to do that sort of like activities, right? But with this help of EveryMundo, we are now able to like control the activity, the point, and the kind of the area and the coverage of the activity that we can do. We can use this like tool to send out some of the email that for some of the new fare that we have published. And the promotion pages making it. So those activities is getting faster and faster. So, controlling the activity by ourselves, the marketing team, and also doing it faster was like the kind of the pinnacle of the goal.

Alfonso Ramirez: Perfect. Yeah, and I think this is also a way about like the scalability and automation, right? I think these days, I think both of these areas are critical in every team. And I would say on, on those people that are as your teams, that they just need to go fast to market, right? Like, you need to make sure that you get out there at the right time and sometimes there are a lot of competing priorities, right? That's an ongoing thing and we'll never change that. So maybe Ross in your case, like and maybe... I know that you also come from other industries in the past, like how critical the speed to mark has become. And how you can leverage also partners because of these always buy versus build kind of situation and dilemma that is out there.

Ross Schmadebeck: Yeah, speed to market is key, right? You have your revenue team that says, Hey, we need to activate this message. We get this campaign out, whether it's a fare sale or an award sale, how quickly can we get that to market? And having the right tools in the toolbox really does allow us to respond and react as quickly as possible. In a past life, we would spend 24 weeks planning a promotion in a campaign. I don't have that luxury anymore. I'm lucky if I get 24 hours, truthfully, to get content up, to get targeting in place, to understand the audience and demographics, to run it against a model to make sure it's the right people. We need the right tools to help make sure that we can accomplish that with the need of such a robust business is not the right word, but with a business that is...

Alfonso Ramirez: Complex.

Ross Schmadebeck: Complex. Ever evolving and changing, especially customers that are purchasing so close in. They really are waiting for the best deal when they're ready to travel. Whether that's the leisure travel that wants to add some time in Florida, I know a handful of us are doing that. Or if it's someone that really needs to book that business trip because they have to be in that meeting tomorrow. So it really does help us make sure that we've got the right tools to meet the business needs of the day.

Alfonso Ramirez: Perfect. And I think this is a whole concept here. I think a lot of the value propositions as well is like, for those that attended our product teams, the marketplace, like why we're doing this? We want to make sure that all of our customers have the tools. And have the ability to make sure that they go to market out there quickly. Because we understand like IT resources internally are precious. Like there are missing a lot of things. So how we can help, so I... Those that haven't been there, go to the marketplace. There are more than 150 products that are specifically for marketing. So of course, talk to your respective CSM and I'm sure there's a new thing out there that you can even try just to make sure that that evolves into your activities.

Alfonso Ramirez: And this is also about efficiency, right? And you mentioned it's... This is very important, like how in the past planning a campaign was a whole... New whole overhaul, right? So that what one of the things that we've come to is like, okay, how we help our partners to create those campaigns quickly, right? So for instance United has a very focused, targeted campaigns about ski destinations, right? So what in the past potentially was a whole thing of, okay, we need to go back and plan this and which markets. So now this can become like an ad hoc evergreen strategy where they literally go into the system, they select what are the routes, what are the markets, and so on. And then you can deploy that, right?

Alfonso Ramirez: So a lot of that is, it's becoming a reality and we are enabling the system. Make sure to do that. So I know on your case, Yonghwa, you mentioned like a lot about the promotional activities in Korea, for instance, on how you guys or the Korean market, it's very into promotional promo codes and all that. So I think, if you can elaborate a little how you plan to leverage all this world of promotion and custom pages and so to achieve that in the future as well.

Park YongHwa: Yes. Like I just said we in the past it took time to prepare and all the material and to go through all the necessary procedures to conduct some marketing campaign. But right now we got this airTRFX pages that we can just log in and just create the page instantly. So that the power of doing it at the pace that we need to is just great leverage that we can use for the future. But one other thing is that when it comes to the marketing in the regional headquarters, they typically do not have the necessary resources compared to the ones who are working in the headquarters, right?

Park YongHwa: So the marketing activities in those regional headquarters and regional branch offices, they kind of just focus more on managing the indirect distribution channel because it is scalable. But nowadays with a tool like this, they can tackle and they can do the promotion and campaign for our direct channels too, right? So from my perspective, when I was working in some regional branch offices, the headquarters, to be honest, they were telling us, like, you guys have to promote the direct channel sales, right? But there's no tool for us in the regional headquarters, right? I mean, what can we do, right? So at the point of time, I was just having so much time to make some, to be honest, like a kind of fake report to be telling to the headquarters that we are doing this activity and doing that.

Park YongHwa: But nowadays with this tool, they can learn and they can actually create a promotional page for their specific affairs and specific promotional cases. I think it is very important to tell them to educate and train them on how to be using these type of digital marketing platforms, like EveryMundo. It is not limited to one platform, but other platforms that are getting just more important things like that. So, yeah. I will stop here.

Alfonso Ramirez: Perfect. So I'll go to change a little bit of topics here. And I know we're running out of time, but there's a lot of great things to talk about. So I'll try to be quick. Personalization, it's a new thing that is coming. Everyone needs to invest more. In fact, in United, they have now specific teams to that. So maybe, Ross, if you can give us a little bit of the context of how that's becoming critical for you guys internally and anything that you can share, like what is the vision of achieving that also at scale, right, to target also those customers?

Ross Schmadebeck: For sure. Personalization is critical to our customer experience. As I mentioned, my team is responsible for the dot com and mobile app experiences for United, as well as the kiosk and several other placements, our integration with email. We've been taking that to the next level, leveraging machine learning models, evaluating AI to really understand how we can continue to raise the bar and what the customer is seeing when they see it. There's only so many dimensions that I can look at as a human and understand where that message might make the most sense. But really, it's the power of machine learning personalization that takes us to the next level, helps us drive incremental revenue, a better customer experience across the board.

Ross Schmadebeck: For us, it's almost second nature. In fact, I was asked a couple months ago, can you put a dollar value on personalization? And we sat for quite a bit of time, and we don't have an unpersonalized experience. Every experience with our customers, millions of times a day, is personalized. And so for us, it's just making sure that it's the right personalization, continuing to iterate, learn, evolve our messaging, and continue to amplify our overall business objectives.

Alfonso Ramirez: Yeah. And you know, we will continue to evolve that. And some of you also had attended the product sessions. We are investing a lot on that. We have enabled geolocalization. There's parameters out there that can make the pages much personalized and based on what the customer is wanting to do. And then we'll continue investing to bring that data into the products, right? So you heard our product team. Our next phase is how we bring up the the customer information that you guys have into this experience so it becomes cohesive. So a lot of great things coming up. Stay tuned on that. But we're really excited about this because we understand how critical this is becoming for that.

Alfonso Ramirez: And then the data, right? We talked briefly about the data importance of that. Just quickly, tomorrow there's a great talk for those that are here with Kat and Enmanuel from our teams. They will talk about how we use the data at PROS and specifically enough for marketing. There's a lot of data that is available to you guys, those that have an engagement with us. There's a lot of data that becomes available based on FareNet.

Alfonso Ramirez: So if you haven't explored this, please talk to your customer success manager and they can walk you through this. But for us that's critical. And maybe just to summarize and to close some of the notes, how data, again, is becoming so important and how you guys are planning to effectively use to make sure that you're bringing the right message and the right targeted strategy to your customers.

Ross Schmadebeck: Sure. So it goes beyond even our own channels. I think for our perspective, as mentioned, we have a lot of planes on order, a lot of routes we're expanding to. We have a lot of seats to fill. So we want to ensure that we've got the right tools. This really does allow us to look at what the customer is looking at and how we can react to that while also simultaneously ensuring that we convert that customer, not just now, but in the future. So for us, the data that we capture through tools such as Offer Marketing really do allow us to be better marketers while also giving the opportunity for us to learn, evolve, and adapt as our business learns, evolves, and adapts.

Alfonso Ramirez: Yeah. And then another thing that you mentioned was about the usage of the partner data, right? I think that's also important and how we'll bring that into the conversation. So if you can elaborate a little bit more, have you leveraged also partners outside of PROS and EveryMundo to also utilize that data?

Park YongHwa: Yeah, so my case... First I was just mentioning was about the collaboration with the credit card company. A lot of the credit companies, including MasterCard and Visa, they, I think are increasingly focusing on the data as other industry players are doing. So, we have our local credit card partner in Korea, and they are also so much investing and just trying to get so much value from the data, too. So, what we were doing, what they, along with us, is doing is, from an executional and practical standpoint, when we do some promotion, what kind of data do we have to use? Do we have to target using some demographic data or other some trait or other some valuable information? Are there any, anything like that?

Park YongHwa: So, our approach was just for example we... When you want to promote some specific route, we have our customers who already booked. And if we want to kind of target any customers on this specific route, on this specific season, then those customers who already booked on that specific period and just the route, will be the kind of model case that we have to... That we can target. There will be a lot of different perspective on that whether it is valuable or not.

Park YongHwa: But from our focus is just trying to get the most relative customers for us to target. So so let's say... Let's say like those customers will be our target, then how we can, like get the similar targets with those who we are thinking. And then the credit card company was kind of building machine learning and AI model to to give us the lookalike model which will be based on the distance based like models like LGBM, XGBoosting these type of sort of, machine learning using and leveraging those, like the model. They were able to give us the opportunity to get the lookalike model for those specific, like, customers.

Park YongHwa: It is not about demographic. It is not about age things like that. But it was about each individual customer's data points, including other past just experience. So yeah, and then just having the model and just having the platform that we can leverage on a daily basis was very crucial, and then they were doing it, so we are partnering with them, and then we are just kind of testing it, but we are watching great performance. So, yeah, that's the experience I would say.

Alfonso Ramirez: And just one last example that has, how we are leveraging partners. So with United, there is... They launch on the platform, on our airTRFXat very targeted ads to also promote other products. And that... So, this was a very interesting use case where these placements, imagine, were very specific on maybe the homepage of United, right? So, we now managed to extend all of these through literally hundreds of thousands of placements, and now the pool of data are information that United is getting just expanded, right?

Alfonso Ramirez: So there's our features and capabilities that we can do. Like, we, in this case, integrating a product from Google but I'm sure there are others. If there are also any interests as you guys are exploring how you can, in a way, monetize the product in a way of how you can leverage it for more data there are ways. Ross, I don't know if you have any information on this, but this was a critical thing also that we launched with the team to make sure that you guys were leveraging these additional, I guess targets in order to get that information that was critical for you guys.

Ross Schmadebeck: I would say for us it's become almost standard. We look at this opportunity with each campaign or each destination we need to support. And so, for us, as we continue to evolve our messaging and our strategy with the tools through airTRFX as well as Offer Marketing in general, it really does become another way we can raise the bar, reach our customer, get them the message that they need, whether that's through paid advertising, Google search, that those types of channels do really allow us to do a feedback loop, which helps us understand even more about where our opportunities exist.

Alfonso Ramirez: Perfect. Again, this was just a quick summary of how there are a lot of things out there that we can do, right? We have been telling you guys it's not only about SEO, it's not only about paid search. There's a lot of capabilities out there that you can leverage, and the whole point of this is that bringing two of our customers where they are thinking this outside just those particular channels. If you have any questions, of course, we're more than happy to see all of these that you're seeing. It's up and live in real cases. I want to thank you both for the time. It was a very, very pleasing conversation, and everyone, thank you for being here, and I hope you continue enjoying the rest of the day, the party later today and tomorrow. It's a lot of other great sessions coming up. So, thank you. Thank you, everyone.