Alitalia Achieves 41% Conversion Rate Using Microsegmentation
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Alitalia is boosting revenue and avoiding fares-based decision making by microsegmenting its messaging.
Speaking at the IATA Airline Industry Retailing Symposium in Rome, Fabio Lazzerini, Alitalia’s chief commercial officer shared an update on the the airline’s progress as it goes through administration, and how its digital initiatives are helping Alitalia convert a greater share of customers. Alitalia has refined its e-commerce strategy, moving away from fares-based competition, not only by ensuring that the value of its offering is clearly evident, but also by ensuring that its messages are more relevant and timely.
“This is a particularly good year, despite all of the difficulties of administration,” Lazzerini said. “For the first time in seven years we are having promising results. We are growing passenger numbers … We are growing all of our business units.” Lazzerini said Alitalia has seen year-on-year revenues grow by 7% and year-on-year passenger numbers grow by 0.4% as of September. Year-on-year digital sales have risen by 19%, which is in line with the airline’s plans to shift to reach 20% of revenue coming from digital sales.
The airline has moved away from what Lazzerini described as “gut marketing,” towards data-driven marketing, and shifting the Customer Relationship Management (CRM) strategy from clusters to “segments-of-one.” The segments-of-one principle, or microsegmenting, is part of the personalization of interactions that Lazzerini believes makes offers more relevant and attractive, more readily actionable for consumers.
“[Microsegmentation] increased conversion by 19% … With the last campaign we had a conversion rate of an additional 22%; so we are at about 41%.” – Fabio Lazzerini, Alitalia
“Instead of sending out … emails promoting flights and destinations with the price as the only driver of decision, we are sending out emails to these microsegments. [The promotion email] is written in the language the customer is used to talking, and [contains] the message that the customer wants to hear, without ever mentioning the pricing,” Lazzerini said. “This [microsegmentation] increased conversion by 19% in the first wave, and we refined the process more. With the last campaign we had a conversion rate of an additional 22%; so we are at about 41%. That means that they are opened, they are read and they turned into a booking, without mentioning the price.”
As part of the digitalization of sales, the airline is also focusing on improving its app and website channels to drive sales, and integrating NDC IATA’s (New Distribution Capability). Around 50% of the airline’s check-ins are done through the app, which Lazzerini says is responsible for an improvement in the airline’s on-time performance.