As one of the largest ultra-low-cost carriers in the US, Spirit Airlines became synonymous with nickel and diming passengers for anything beyond a basic seat.
But with a recent CEO change and a planned site relaunch this fall, Spirit is also trying to become more data-driven to improve customer retention and new passenger acquisition.
“We’re thinking about our ecommerce strategy a little more because we’ve primarily been a low-cost airline that really relied on our price advantage,” said Rana Ghosh, senior director of ancillary revenue for Spirit.
That’s not to say that Spirit is forsaking its budget-friendly roots, but the airline sees opportunity to improve its overall experience.
The airline industry traditionally took razor-thin margins, and sometimes airlines look to recoup losses through add-ons like hotel or car rental bookings or extra legroom.
But for Spirit, ancillary revenue makes up about 40% of its total top-line (and growing), so it’s a key revenue-driving strategy.
While Spirit rarely struggled to fill a plane thanks to its low-price travel, it didn’t have much insight on customers beyond the final booking.
“We were seeing people fast-forward through all of our (ancillary) offers just to get to the booking because they weren’t relevant,” Ghosh said. “They ended up going elsewhere to get the same services we could have provided and we realized we were losing a real opportunity to affect the bottom line.”
So while Spirit instinctively thought, for instance, millennials might like boutique hotel options near a beach while budget-conscious families would want to stay near amusement parks, it wasn’t acting on those inclinations.
“Independent of who you were, you were pretty much getting the same offers presented to you,” Ghosh added. “It was very generic.”
Spirit is in the process of implementing marketing analytics platform Qubit to improve its web analytics to start, but ultimately the airline hopes to understand the path to conversion.
The next step is to marry operational data, which includes info like routes and cancellations, with customer and ecommerce data collected by Qubit.
Spirit also envisions applying Qubit’s data insights to brand campaigns in social, where it focuses most of its paid media efforts.
“We don’t invest a tremendous amount on the paid media side, and part of that reason is we generally fill our planes being a low-cost carrier,” Ghosh said. “Having said that, we think we can do a better job [where we have invested].”
As with Groupon’s early days, a major challenge is retaining discount-minded customers post-purchase.
Spirit doesn’t want to be perceived as a one-time deal, particularly when loyalty programs are a point of pride for many airlines.
Thus, gaining repeat business was the basis of Spirit’s new loyalty program that rewards passengers with points when they spend less on selected routes.
Ghosh said all of these moving parts – the new loyalty program, rebranded website and Qubit deployment – will help Spirit establish baseline data to begin improving the experience both online and in-flight.
“We’ll use data to tweak our model and understand where there’s dissatisfaction and where we can make changes in our policies,” he said. “One part is operational. Did we get you to your destination on time with a clean and friendly experience? Then, are they amenable to putting Spirit at the top of their list for their next flight?”
