November 20, 2012

Learning from the masters of upselling and cross-selling

A new study shines a spotlight on lucrative examples of ancillary revenue by retail and travel companies. What’s the unsung hero of ancillary innovation today? The report’s authors highlight subscription services as exceptional generators of revenue and loyalty.

Some of the examples of new ancillary services are truly innovative.

Exhibit A: In August, American Airlines debuted Luggage Delivery Service at 200 US airports. Starting at $30, the service promises to deliver a bag within 4 hours to an address up to 40 miles from the arrival airport. It’s innovative in the sense that it is adding a service that the airline never provided before: guaranteed, door-to-door delivery.

Others ancillary revenue services are merely an unbundling of existing services that used to be included in a total price as new, add-on features, to achieve disintermediation, also known as the rolling out of à la carte fees.

Carnival, the US brand of cruise line company Carnival Corp., this summer began testing a “Faster to the Fun” program. For $50 per cabin, passengers can receive early boarding, priority dinner reservations, and faster luggage delivery.

Get the full story at Tnooz

Download the complete report at IdeaWorks (PDF 1.6 MB)