Could an auction boost your profits as it did for Virgin Atlantic?
On a recent business trip to New York I ended up booking with Virgin Atlantic as they have a very flexible approach to ticket name changes. Virgin will allow name changes for a range of reasons, one of which was business requirements (the others included change in relationship status and health reasons). As we had not decided who would be travelling on this trip and didn’t want to leave the ticket purchase to the last minute Virgin was the obvious choice.
One key feature of their booking process really impressed me and I wonder if other businesses could use a similar idea in their purchase process to boost profits on an up-sell?
Comfort – at any price?
On any long distance flight comfort is important, especially if it’s a business trip and I wanted to arrive fresh and rested. After a quick look at fares I booked economy as the premium seats were considerably more expensive and I couldn’t really justify a 400% price increase for more legroom and only slightly more appetising food. A day or two after booking I again considered upgrading but the fee was a little over £2,000 return.
Bid to upgrade
It was at this point that I noticed a new feature run by a third party supplier – Plus Grade – www.plusgrade.com
I could place a bid on an upgrade to premium economy choosing the maximum value for each leg that I would be willing to pay. I decided that the outbound leg was worth £200 extra to me so bid £200 exactly. On the way home I decided and upgrade was worth £325 (so that I could get a nights sleep and make it into the office by 10am for a days work).
The system explained that the sales teams would review my bid and let me know if I was successful between 4 and 7 days before each leg of the flight.
You are allowed to bid once, and a rough indiction of the chances of success were displayed on a dynamic slider. (Outbound was a “fair” chance and return was “good”)
Why is this such a great feature?
I love this concept. For the airlines this is pure extra profit. There is no way I would have paid £2,000 for an upgrade but just over £500 was certainly worth it. If they had enough empty seats they could fill them for the cost of the slightly enhanced food and drink service which would be more than eclipsed by the fee I had paid.
It unlocked hidden profits for Virgin, although I presume that Plus Grade charge a percentage fee for their service.
It also ensures that they can still sell high value seats to customers for whom the comfort of a premium service is vital, no matter the cost. If I was a passenger who never flew economy and wouldn’t wish to, then I would have paid the full upgrade fee, or travelled on a different day.
4 days before my outbound flight and 6 days before my return I received an email letting me know that I had been successful and my new tickets were issued at the same time.
In conclusion
When choosing a long distance carrier I will always try and use one that uses Plus Grade as it certainly made for a more pleasant flight, and at a rate I consider value for money.