GUEST POST: Travolution asked Daniel Ox, Co-chief Executive of Ocean Holidays, to discuss why Optimisation is the key to success.
As the travel sector continues its recovery, the industry continues to experience a period of transformative change. Business models are being adapted to be fit for purpose in the post-pandemic world and travel bosses are looking at ways to future-proof their businesses.
However, there are some lessons I’ve learned over the years around best practise for operating a travel business which are still relevant in today’s environment, and which will stand the test of time. Ocean Holidays is now the fastest growing travel business in the UK and our desire to continually optimise, even the minutiae, has been pivotal to its success. Below are my top tips for optimising a travel business.
- Do sweat the small stuff
I remember when I was 15, at the dinner table of a friend’s house, discussing with his parents what jobs we might be interested in when we left school or went on to university. His dad went on to explain his role as a consultant for Ford Motor Company. His job was to walk the factory floors and find ways in which he could optimise the manufacturing process. He explained that the smallest of changes to even a workers’ walking pattens on a production line could save the company hundreds of thousands per year by either saving overheads or increasing output.
Fast forward a few years and my day-to-day looks similar in many ways to my friend’s dad’s, just swapping out factory floors for call centres and the manufacturing process with the customer journey. When looking to optimise a travel business, even the smallest modification can make a huge difference – whether that’s related to online booking conversion, call generation, customer service, or any other aspect.
2. Break down fundamental business processes into key stages
Optimisation comes in many forms across different areas of the business, but naturally we started our journey at the front-end website, constantly looking to generate more and more sales leads for our agents – and we did this very successfully.
But with sales success comes operational burden, and so, as we matured, we started to apply the same A/B testing logic across other areas of the business. We broke down fundamental business processes into key stages, following the customer along their interactions with us, from start to finish.
Breaking down each significant part of the business processes and overlaying these areas with data allows you to see where the biggest points of KPI influence are within the journey. It’s usually this point at which to identify opportunities to 2X, 5X or even 10X a company’s key KPIs in a very short period, dependant on the operational change or technological requirement.
An example of this is the quote process. By testing the response time of sales agents to customer enquiries, you will quickly conclude that responses sent in seconds, as opposed to just one hour later, can result in a 2X conversion outcome.
3. Set up a dedicated optimisation team
Creating a dedicated optimisation team of an eclectic mix of stakeholders across the business from tech, marketing, operations, and sales, and bringing this group together on a regular basis, can really help to move the dial.
The results of these meetings should be a mixture of operational change, technological development and policy making. The quicker these changes can be rolled out to test, the faster your metrics will increase. Of course, as your business scales, these optimisations have a more profound impact on margins.
Identifying optimisations can be very exciting, and very quickly you will have a long list of projects. But almost as important as identifying optimisation opportunities is the management of delivery to the business. The best way to do this is using a scoring methodology against each opportunity.
There are lots of methods used for scoring project management or technology timelines, I.C.E being a common and useful one; Impact; Confidence; and Ease. At Ocean Holidays we use a form of I.C.E, but also layer in further scores for: Sales Impact; Automation impact; Customer Experience Impact; and one of our newer scoring metrics, ESG Impact. By scoring each potential optimisation, it gives you confidence that you’re delivering the biggest outcomes in the shortest amount of time. A skilled project manager needs to be able to balance small impactful projects that may take days, against long-running projects that can take months or even years.
At Ocean Holidays we obsess over the continuous optimisation of the customer journey which I believe has played a major role in making us the fastest growing ATOL holder in the UK. I’m sure within your business there will be multiple optimisations that can 3X or even 10X your KPIs over time. It’s just a case of identifying them and planning the quickest route to delivery.