Optimizing profits and customer experience for online travel purchases

Date:

Analysis of the customer purchasing journey is at the heart of
marketing and user experience initiatives, but the critical payment stage is
often neglected. 

A recent report from payment processor Nuvei has found a misalignment
between what travel suppliers offer regarding payments and what travelers
globally prefer. 

The company’s research highlights gaps in current practices, missed
revenue and profit opportunities and a failure to meet customer expectations.

The good news for suppliers is that it is relatively easy for them
to address these issues by following recommendations that can enhance
customer satisfaction, provide a frictionless experience and make a difference
in revenue and profitability if executed wisely.

Convenience: Hold my booking

Customers are used to convenience when using online marketplaces
such as Amazon. At a minimum, consumers must be able to complete a transaction
without a last-minute credit card decline. But suppliers need to ensure much
more than that. For example, customers want additional features such as “hold my
booking” – enabling them to hold a travel option at the selected price for a
set amount of time. 

Along with supporting the customer experience and increasing
satisfaction, this type of offering can have a positive impact on the supplier
since it reduces cart abandonment and can increase early bookings, helping
inventory and revenue management while increasing conversion. 

Unfortunately, while seen as a key feature, very few travel
suppliers offer the option for consumers to hold a booking. 

Another convenience feature that is particularly suitable for
regular business travelers is to allow them to retrieve their payment history
thanks to the creation of an online customer profile. It can help them with
their expense management, for example by automating the export and tallying of
transactions.

Flexibility: My way or no way 

Many customers nowadays want creative payment options such as buy
now, pay later (BNPL), installment payments or splitting payments, for example
among a mix of credit cards, cash and loyalty miles. 

While the benefit to customers is obvious as these options provide
financial flexibility and can alleviate some budget constraints, they also
represent an opportunity for suppliers who can boost conversions by offering
this type of flexibility. And for suppliers who offer a loyalty program, facilitating
the use of loyalty miles can help them to clear this type of liability from
their balance sheets.  

Customers also expect suppliers to personalize their features to
their needs. 

The report finds consumers expect this personalization in two ways
related to payments: being able to pay with their preferred method – such as
PayPal in Europe and Alipay in China – and being able to pay in their preferred
currency. 

Unfortunately, today there remains a gap between these expectations
and the features offered by travel suppliers, often resulting in shoppers abandoning
the purchase.

Security: Safe and sound 

Fraud is a growing concern for travel consumers. In fact, travel
has shown the largest increase in suspected fraud compared to other e-commerce
industries between 2019 and 2021, jumping more than 110%.

Customers are now used to shopping and buying online and are well-educated
about the risks and protections available. One of the current solutions is the
systematical use of 3D Secure (3DS), which requires customers to complete an
extra verification step with the card issuer when paying online.

Surprisingly, as revealed in the Nuvei research, while systematical
3D Secure (3DS) check is important for 64% of the respondents and 35% will even
abandon a transaction if they aren’t sure of the security, only about one-third
of airlines and online travel agencies display the 3DS logo.

Digging into regional data, there are high numbers of consumers in
countries in Latin America and in the United States that ask for 3DS even
though it is not a regulatory requirement. Compliance isn’t enough; travel
suppliers must show customers that they are heard and understood is key.

Transparency: Crystal clear

The last pillar of customer expectations is transparency. When customers
clearly understand pricing and associated terms such as cancellation and
guarantee policies, it improves trust, provides a frictionless experience and
positively impacts customer retention.

The vast majority of travelers are looking for explicit and
transparent pricing, yet some travel suppliers are still not displaying
all-inclusive rates. If online travel agencies focus on displaying the cheapest options to
convert shoppers into bookers on travel metasearch sites, they are failing to
satisfy customer needs. In addition, a significant share of travel customers
find it difficult to spot the cancellation and refund policy on travel
suppliers’ websites.

Again, these practices not only fail to meet customer needs, but they
can also result in missed opportunities for the provider and/or in avoidable
chargeback related costs.

Conclusion: What’s next?

Providing clear and striking actionable data and insights, Nuvei’s
research is a reminder that payments are fully part of the customer journey
experience and therefore must be part of the strategy to attract and retain
customers.

There should be a holistic payment optimization plan,
incorporating revenue and cost drivers, but with a customer-centric approach.

Overall, it is about marginal gains that lead to top-line and
profit generation while enhancing customer satisfaction and market penetration.

The misalignment that continues to exist between what suppliers
are offering and what consumers are demanding shows that taking action could
lead to better market share.

Learn more in this free webinar

For more
detailed data and a discussion of this research, please join this webinar with Nuvei, Optimizing payments: Why travel revenue depends on it, on Tuesday, October 17, at 11 a.m. EDT.

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