Nor1 is a technology company focused on upselling perishable inventory through real-time data and decisioning. Their core solutions are designed for the hospitality industry, enabling hotels to directly contact guests throughout their stay to offer upgrades, activities, services and more. Nor1 utilizes predictive analytics and machine learning to understand customer preferences and optimize upsell offers on mobile devices. Upselling is critical for revenue growth, customer loyalty and experience enhancement.
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Nor1’s patented technologies are focused on
perishable inventories serving a variety of
industries, while our core solutions are
designed to support the hospitality industry.
Nor1 enables hoteliers to have direct contact,
in real-time, with their guests throughout the
trip lifecycle, from booking through check-out.
About Nor1
Post-StayPre-Stay At Check-in
Upsell and Cross-sell
offers from tours and
activities, dining,
transportation, spa, etc.
Global Team: Mix of technologists, data scientists,
and travel industry veterans in Silicon Valley, Mexico,
Germany and Singapore.
Intra-Stay
Upsell at booking
confirmation
Pre-Arrival Emails
Hotel Services
Upsell
Satisfaction
and Loyalty
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Nor1 is the Technology
Leader in Upsell Solutions
Engineered to provide a
clearer understanding of:
• What consumers want
• Are willing to pay for; and
• Improve the offer process
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Upselling refers to revenue potential that
goes above and beyond a traditional
booking.
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Why is Upselling Critical?
1. Creates greater utilization of fixed assets
1. Builds customer loyalty - enhanced guest experience
1. Maximize the value of each reservation
2. Leverage the resultant data across the enterprise
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Upsell Benefits for
Consumers
• Consumers love room upgrades
and will pay for them.
• Helps differentiate your business
in eyes of consumers.
• Makes your business’s Mobile
application more relevant during
the actual travel phase.
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Travel-focused strategic advisory firm
Headquartered in New York City, serving a global client base
New subscription research program focusing on marketing, distribution
and technology
─ Objective and independent
─ Mix of large-scale consumer surveys and topic-specific industry executive
studies
About Hudson Crossing
12
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The Journey “Story Arc” Spans Multiple Sales
Opportunities
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Dream Research Book
Outbound
journey
Destination
Return
journey
Share Dream
Story arc
Channels/Touchpoints
Products/Offers/Promotions Can
Reach Travelers Beyond Initial Booking Point
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The Traveler Has Two Wallets
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Source: Overstock.co
The room
Everything else
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The “Three I’s” Of Travel Merchandising
15
Inspiration IndividualismImmediacy
Source: Google Images
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Traveling Is An Excuse For Self-Indulgence
16
3 in 5 travelers say they do nicer things
for themselves when they are on a trip
Base US online travelers
Source: Hudson Crossing’s US Travel Online Study, Q1 2013
Source: Google Images
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Details Matter
17
74% of travelers consider the quality
of a hotel’s amenities and service to
be important
Base US online travelers
Source: Hudson Crossing’s US Travel Online Study, Q1 2013
Source: OmniHotels.com
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A Significant Number Of Travelers Can Be
Tempted With Up-Sell/Cross-Sell Offers
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Save
time/reduce
hassle: 47%
Receive better
service: 48%
Enjoy more
comfort: 45%
Percent of US travelers who will consider paying a reasonable
premium for the following:
Base US online travelers
Source: Hudson Crossing’s US Travel Online Study, Q1 2013
Source: Google Images
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Travelers Have Above-Average Mobile Device
Ownership
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53%
66%
75%
81%
85% 88% 91%
21%
42%
59%
71%
79%
85%
89%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 (E)2015 (E)2016 (E)2017 (E)2018 (E)
US Smartphones US Tablets
2013 US average smartphone adoption (43%)
Source: Hudson Crossing analysis
US mobile device average” Pew Internet Research
2013 US average tablet adoption (31%)
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Mobile Enables Additional Selling Opportunities
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0%
10%
20%
30%
40%
50%
60%
70%
80%
During initial reservationBetween making reservation and check-inAt the airportOn the plane
Premium in-flight meal
Checked bag fees
Upgrades
Fast-track security screening
Priority boarding
Airport transfer
Advance seat assignments
Hotel accomodations
Travel insurance
Base: Smartphone-owning US online leisure airline passengers
Source: Hudson Crossing’s US Online Leisure Travel Study, Q1 2013
Percent of airline passengers who want to buy the following items after making initial
reservation
25%-50% of
product sales
opportunity
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Definition: Using relevant data to
create and target offers, Customer
Managed Experiences are
products/services that customers
create and buy on their
channel/platform of choice and use
when and where the customer
wants.
Entering The Era Of Customer Managed
Experiences (CMX)
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Ancillary Products Are The CMX Catalysts
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Source: Wizie.com
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The Pain of Paying = Strong Consumer Interest
for Upgrades After Initial Purchase
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Capitalize on Loyalty
Complimentary option
is pre-selected
A 5% increase in customer retention can increase
a company’s profitability by 75%... Bain and Company.
Paid options
are also shown
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The Upsell Opportunity
$9
IS THE AVERAGE PRICE
PAID FOR A HIGH
FLOOR
$28+
IS THE AVERAGE PRICE
PAID FOR EARLY CHECK
IN
$36+
IS THE AVERAGE PRICE
PAID FOR LATE CHECK
OUT
$58
IS THE AVERAGE PRICE
PAID FOR KING SUITE
(MOST POPULAR
UPGRADE REQUESTED)
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Creating True
Personalized Commerce
In order to create a relevant dialogue
with the traveler by predicting what
they are most likely to be interested in
at a given point in time, Real-Time Data
& Decisioning must be core to your
Upsell Strategy.
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Three Levels of Analytics Maturity:
Optimization
Mathematics
Machine Learning
Data Mining
Probability Theory
Statistics
Customer Behavior
Management Science
Operations Research
Mathematical Programming
Stochastic Programming
Game Theory
Simulation
EconomicsComputer Science
Decision Science
Artificial Intelligence
Dynamic Programming
Big Data
Profiles
Predictive Modeling
Personalization
Business Intelligence
Experimentation
1. Traditional Business Intelligence
1. Predictive Business Intelligence
1. Real-Time Decision Intelligence
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Real-Time Upsell
Offers Take Real-Time
Algorithmic Analysis
Data points worth
considering, include:
• Consumer profile
• Current transaction
• Historical transactions
• Inventory availability
Real-time decisions include:
• Product(s) selection
• Assortment
• Pricing
Machine learning algorithms learn from each
transaction to calibrate future offers.
• Constraint handling
• Geo Location
• Weather
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62%of restaurant
searches are from
smartphone and tablet
devices, according to
Google.
75%of Americans
bring their phones to the
bathroom.Searches on mobile
devices are
66% more
likely to have local
intent than a desktop
search.
80%of mobile users prefer
locally relevant advertising and
75% are more likely to take an
action after seeing a location-specific
message.
(Sources: Mobile Audience Insights
Report from JiWire, 2012 and Digiday, 2013)
Statistics for Mobile Purchasing
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Make relevant and targeted offers to
consumers while they are
traveling, such as:
• Maps
• Dining Offers
• Room Upgrades
• On-Site Schedules
• Event Invitations
• Tours
• Weather
• Spa Offers
• Activities
• Reminders
• Flight Delay
Communications
The Mobile Upsell =
Experience Management
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What’s the Secret to Upsell
Success?
• Invest in analytics and real-time decisioning.
• Optimize everything for Mobile.
• Think more broadly about your product set.
• Engage multiple functions in the discussion
of upselling and to leverage the resultant
data.
Upselling is the Key to Long Term Revenue Growth and Loyalty
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Core Technology Assets
• Unique buying process that allows
merchants to price and merchandise
perishable inventory more effectively
• Utilizes PRiME technology to
optimize offers
• Platform that connects travel
consumers and decision makers
• Patent issued for “Method for
Transacting for a Perishable Object
Having an Uncertain Availability”
• Deep integration into property
management systems to provide
up-sell offer at point of check-in
• Initial integration with Micros
Opera (leader in PMS systems with
22K properties)
• Utilizes PRiME technology to
optimize offers made
• Extendible to other point of sales,
e.g. retail check out at cash
register, mobile payment checkout
• Predictive modeling engine trained on
millions of historical transactions
• Makes real-time decisions on product
selection, pricing, and display rank
• Leverages data from consumer and
supplier profiles, behavioral
observations, real-time transaction
information, and inventory availability for
offer optimization
• Understands consumer’s willingness to
pay and can steer demand on behalf of
supplier
• 2 Patents issued/allowed:
“Computer-Implemented Systems and
Methods for Automatic Merchandising”
“A Method and a System for
Simultaneous Pricing and Merchandising”
Notas del editor
Overall objective as to why upselling is so important. We’ll share some trends and stats through our experience of doing this for 8 years.And a general direction on where things are going and what organizations should be investing in…And a checklist of things for you to give consideration to in order to have a robust, results oriented upselling program
Nor1’s upsell solutions provide a clearer understanding of what consumers wantare willing to pay for, and improve the way those products and services are offered to them.
Qualify (upsell and cros-sell all together…
For 3. Customer cost of acquisition is going up and up while customer conversion rates across the industry are down as number of sources travelers consult increases. (GDS, travel agents, OTAs, hotels, travel review sites, meta-search, search engines, social media, etc.) 1.45% (lowest of any industry)Plus, you now have Limited forecasting ability thanks to Mobile and last minute booking channels that have shortened the booking cycle.Leverage the resultant data (and derived statistics, such as willingness to pay) across the enterprise
8 years of validation shows that guests will pay for upgrades and it can enhance not hinder their satisfaction
From Henry’s stat’s - Here are some specifics and truths we’ve uncovered as it relates to upselling.There is a Buyer Behavior Dynamic – the pain of paying - Refer to Henry’s Wallet slide…. When the offer is made is really important. What you ideally want to strive for , initially, is to let the customer book the room and then after that – then there is a different wallet that the guest will consider other options on top of the initial booking.. With each subsequent purchase related to the original purchase, the pain of paying diminishes…. And new funds are mentally unlocked at specific points of time
Unique opportunity with your loyalty guests because they convert more highly with upgrade offers…and are likely to continue their loyalty thru a better guest experience. Bain and Company, a global business consulting firm, state that “a 5% increase in customer retention can increase a company’s profitability by 75%.” The Harvard Business Review tested out this statement, and found that “when MBNA America, a Delaware-based credit card company, cut its 10% defection rate in half, profits rose a whopping 125.”Upselling your current customers can additionally generate a tremendous amount of revenue from your customer base to your business.Unique opportunity with your loyalty guests because they convert more highly with upgrade offers…and are likely to continue their loyalty thru a better guest experience.
The biggest mistakes we see hoteliers making in considering upselling –Not seeing an Upsell as an Incremental Revenue Opportunity - so How much More do you want to make on this existing booking? Not considering the Original Value of the Reservation when making room upgrades. For example a guest paying $159 for a room is unlikely to upgrade to your Presidential Suite at twice the price. But might jump at a chance to move to a junior suite for an additional $30. It’s Relative Value. When you Cross-Sell other services and offers then that Relative Value is removed and is evaluated differently. LATE CHECK OUT Number of requests = 83,250 Average Price Paid = $36.50 EARLY CHECK IN Number of requests = 52,300 Average Price Paid = $28.75 HIGH FLOOR Number of requests = 396,215 Average Price Paid = $9KING SUITE Is our most requested upgrade.
Two primary components – real time analytics/decisioning and intersecting that with mobile.To be most effective, personalization is ideally managed from a single integrated platform that makes it easy for you to deliver a relevant experience across all customer interactions. When executed properly personalization enables you to extend the customer experience in a way that feels personal but is automatically driven.
Get clear on analytics and your ability on each of these levels will impact your ability to upsell… First, let’s go over the progression of analytics and how your organization can achieve real-time decision intelligence
As you extend the customer profile by adding enhanced information based on a customer’s actions (such as buying history, click behavior, search terms, and shopping cart contents) then you can group similar profiles into personas, and tailor interactions to make the shopping experience more relevant and targeted. Each of the variables have a certain weighting, and the weighting itself changes for each reservation based on the unique intersection of the booking, guest, and property – there is no one size fits all!What you think that a person is likely to want or has done in the past, isn’t actually the best indicator of what they will choose to do in this moment. What a customer tells you doesn’t always have predictive power when you look at it in isolation….Decision Intelligence technology enables a hotel to answer questions like: ‘what product should I be offering the guest right now?’ It also answers more complex questions: ‘should I even be offering a service right now’ or ‘is this the right time to make this offer?’ So how do we solve this problem?travellers expect a higher level of personalization based on their preferences and current locations.Mainframe, client server, the web, to mobile and tablet at an unprecendented speed of consumer consumption. A computer in your pocket – changing buyer behavior along the way.
Intra-stay offers – ancillary services – tours and activities are the next wave of upselling as mobile makes possible making real-time offers to travelers at the point of consumption.The types of behaviors being exhibited via mobile demonstrate the importance of timing. According to Google, 62% of restaurant searches are from smartphone and tablet devices.Searches on mobile devices are 66% more likely to have local intent than a desktop search. Meaning people searching on mobile phones are usually looking for something around them. 75 percent of Americans bring their phones to the bathroom. (Source: Digiday, 2013) 80 percent of mobile users prefer locally relevant advertising and 75 percent are more likely to take an action after seeing a location-specific message (Source: Mobile Audience Insights Report from JiWire, 2012) Since mobile searchers are often trying to find a quick answer to a present problem, they have stronger intent and are much closer to making a purchase than a desktop searcher.
Real-time Analytics in combination with Mobile is the answer to why Upselling is the key to long-term revenue. We are witnessing a platform shift that has historically never happened so quickly. From Mainframe to client server, then the web,and to mobile/tablet. The consumer adoption is at an unprecendented speed essentially putting a computer in your pocket and forever changing buyer behavior along the way. Win the Mobile Upsell and the consumer relies on you to help navigate their trip experience.So why is this industry still treating it as ancillary to their marketing, loyalty and revenue efforts?While the technical requirements of mobile force it into the realm of a specialist expertise, the key to winning lies in realizing that mobile actually represents the confluence of four key marketing disciplines: loyalty, revenue management, marketing and CRM. The potential of mobile is not only integral to marketing, it is integral to operations, merchandising, and other business functions.
Ancillary offers will be a huge revenue opportunity as well as the differentiator in guest satisfaction. Even a select service hotel is capable of reaching guests with targeted communications about the weather, ground transportation and local dining offers. We believe offers should be focused on the guest experience not just on what you have to offer. A much broader offering of information and 3rd Party offers…which continues your dialogue with the guest. And if travel suppiers don’t, someone will. The winner in this will be the org that creates really compelling experience for the customer.
We believe a significant percentage of future profits can be derived from the upselling approach we advocate. The push for greater occupancy and ADR magnifies upselling opportunity.