Reservamos SaaS provides bus companies with a tool that allows them to analyze their market and promote effective pricing strategies.
A fundamental characteristic of digital travelers is the power technology has given them to analyze the available offer and make much smarter purchasing decisions according to their needs and budget.
Digital sales channels provide travelers an advantage to compare prices, find out about route and schedule options, search for the best option, and access a purchasing experience from any mobile device in just a few clicks. Today more than ever, access to information and analysis of the available options becomes an advantage for travelers when choosing a destination or planning the next vacation.
But what happens when users are better informed about the options available to them than the companies themselves? Being aware that digital travelers today spend more time researching before making a purchase decision, forces bus lines to be one step ahead, to maintain a competitive advantage.
Being present at the right moment of a traveler’s search and offering the correct price at the precise moment can be the difference between acquiring a new passenger or the user choosing another more convenient option.
And while various factors intervene to guarantee optimal purchasing experiences, such as having a dynamic, efficient, and secure eCommerce, as attractive marketing strategies that boost digital sales. There are also fundamental factors, such as price, availability, schedules, and destinations, that could help bus companies to increase competitiveness and revenue.
Visualize the market behavior
Reservamos SaaS has developed technology solutions that drive the growth of bus lines worldwide to help them connect more effectively with digital travelers.
A key solution for this is the Competitor Monitor, a web tool that allows price analysts, data analysts, operations managers, and sales managers, among other members of the bus company, to visualize and analyze the behavior of the market, making better decisions on pricing strategies and inventory optimization.
The Monitor is a module that is part of BrainPROS, which facilitates the analysis of public market data through technology used in other sectors, such as airlines.
Through this technology, bus companies have updated and automatic market information at their fingertips, such as routes, schedules, capacity, and prices, using Data Science techniques.
With this tool, bus lines can:
- Optimize and automate market analysis processes and their performance.
- Understand the demand curve existing on a route and make decisions about inventory, such as openings or schedule changes.
- Know the average, minimum, and maximum price of a route.
- Determine price sensitivity among digital travelers.
- Analyze the evolution of prices and acceptance of different types of services.
The future of smart pricing
The new consumer trends among digital travelers force industries, such as the bus sector, to transform to provide an attractive offer that meets the market needs.
Before, travelers had to adapt to the available tourist offer and the holiday periods. But, technology has meant that trips are no longer anchored only to temporalities nor to the usual tourist destinations. Today digital travelers are looking for everything from short weekend domestic trips to longer stays for digital nomads or people who carry out their work and economic activities remotely. This has prompted the tourism sector to increase its dynamism and abandon flat rates, to adapt to a traveler who has the freedom to move to any destination, at any time.
A great advantage of the Competitor Monitor is that the tool does not require any integration with the technology of the bus company, which enables its use from the beginning, and encourages a data culture among the members of the company by optimizing market analysis.
Some of the lessons that have been observed and that can be highlighted from the use of the tool are:
- Improvement in the distribution of schedules.
- Optimization in price variability.
- Understanding the distribution of supply in the market.
- Adjustments in the offer according to the market behavior and travelers’ consumption.
- Fundamentals for making decisions based on data.
By having an overview of market behavior, bus companies can implement recruitment strategies, add discounts, activate promotional coupons, or develop effective marketing strategies that encourage the purchase of tickets. And it also helps reduce costs, personalize the offer, and reach the main goal: increase competitiveness and revenue.
The specialization and experience of Reservamos SaaS allow us to safely accompany the digital transformation of bus companies, increase their revenue and streamline their operations.
Contact us at [email protected] to learn more about the Competitor Monitor.
Currently, it is impossible to have an eCommerce without using a dynamic prices strategy.
Nowadays, it is impossible to say that you have an eCommerce without knowing what dynamic prices are. Although the concept is not new, it is one of the trends sweeping the digital market and that you must implement as a strategy in your eCommerce.
To all this, what are dynamic prices? It is simply a strategy for companies to establish flexible prices based on current market demand and supply. It is also known as “price discrimination”, and the purpose is to maximize the average income margin of your products and/or services, adapting them in a matter of minutes, hours or days, depending on the type of market and in accordance to variables you set. It is such a necessary practice that José Luis Moreno, Regional Vice President of Hispanic Operations for Greyhound Lines (and Reservamos SaaS client), commented in our webinar:
What company doesn’t do revenue management today? If we hadn’t launched with the dynamic pricing strategy, we wouldn’t have had the impact and growth that we have had.
The game strategy
There are several ways to execute dynamic prices, a tool that we can help you implement in your eCommerce:
- Segmented prices: based on segmentation, companies use machine learning to offer different prices to different groups based on some demographic data and using A/B tests.
- Penetration Pricing: based on your competitors you can be the one that sells the cheapest, the one that offers the most expensive, or a hybrid of the two, which is the most recommended. Depending on the relevance of your competitor and your position in the market, you can choose to sell above or below their prices, without punishing your margin and positioning yourself in a market segment.
- Time-Based Pricing: In the case of the tourism industry, travel costs vary depending on anticipated purchases. Using lower prices with greater anticipation of purchase and higher when the date of the trip approaches.
- Quantity-based pricing: If your service or product is in short supply, your pricing strategy is crucial. With a greater shortage, you can increase prices with a more assertive strategy.
- Changing market conditions: the industry situation can change due to diverse factors, and you must act accordingly. During Covid 19 we have seen a lot that companies modifying their prices to adjust to the new normal.
What are the benefits of dynamic pricing? You can make faster and more profitable changes in terms of sales to increase your company revenue and act with much more flexibility and anticipation. Another great benefit is that you automatically learn from your market trends, which will help you move your product. You can use dynamic prices to encourage recurrence and loyalty to your brand. And finally, this strategy allows you to reach more passenger segments. For example, through an attractive pricing strategy, a family group planning to travel by car may choose to take the bus. With this solution, you are accurate to your pricing strategy, with controlled margins, without losing competitiveness in the industry.
Some of the largest eCommerce in the world, such as Amazon, have implemented dynamic prices, having unprecedented success, in addition to this, from retail stores to supermarkets with online sales. However, in the air ticket prices, we see a better example of this strategy, being the airline industry the forerunner of this implementation.
What makes airfare so tending to price fluctuations? First of all, they know their users and their needs. Leisure travelers often plan their vacations well in advance, and business travelers often make reservations days or hours in advance. As the departure date approaches, the seats are more expensive. In addition to the periodicity, they modify prices during holiday seasons, increasing their margin due to high demand.
With dynamic prices, you take advantage of market opportunities and compete on equal terms, often with an advantage over your competitors. To maximize the benefit of your bus line eCommerce through dynamic prices, contact us.
COVID is not the first pandemic that the world has faced, and it will certainly not be the last.
We are pleased to share with you a note created by our CEO – Andrés Sucre, published by Business Venezuela Magazine, where he shares his optimistic perspective on the future of tourism.
It is not news that one of the most affected industries after the pandemic has been the tourism sector. But, despite that reality, I would like to outline five reasons why the tourism industry can offer greater long-term opportunities.
The tourism industry is huge.
In 2019, the annual spending in the tourism industry exceeded 1.4 trillion dollars and came with an average growth during the last five years of 5% annualized, according to Phocuswright. The last quarantines have generated a pent-up demand waiting for the right moment to go out and travel when conditions allow it.
History shows that travel always returns.
COVID is not the first pandemic that the world has faced, and it will certainly not be the last. And what we have seen in the past is that the tourism industry always recovers after a crisis. Skift published a graph showing the tourism industry’s resilience after pandemics (SARS, MERS, etc.) or economic crises. If history is any indicator of the future, we will have more trips in the years to come!
Slow but certain recovery
Despite its size and growth “megatrend”, this crisis has been particularly severe for the sector. For this reason, we can estimate that the recovery will be slow. Bain & Co published a report in June 2020 where they estimated a return to pre-crisis travel levels by 2022 in an optimistic scenario and by 2023 in a moderate one. With the return of lockdowns and new strains in recent months, it is more likely that we are looking at a modest recovery scenario.
Source: Bain & Co.
Recovery trends by segment
We can see how the current context benefits certain segments during the demand rebound process:
- Domestic destinations will be the first to resume their growth vs. international ones. Travelers have a preference for short distances and road access.
- The economic impact is beginning to be felt. So we see that cheap trips will have greater demand than those in the luxury segment.
- Due to the characteristics of COVID, young travelers are going to be the first to venture compared to the senior market.
- Flexibility in remote work and video conferences reduced the volume of business travel. While vacation trips or visits to the family will continue to see accelerated demand as the pandemic is controlled.
Companies that can invest will benefit.
“Every crisis brings great opportunities.” – According to Einstein. In this case, the pandemic has left a severely weakened tourism industry. The drop in passenger demand, combined with a forced closure of its operations, has reduced sales and therefore, cash flows of all companies in the sector.
The companies that will emerge stronger in the long term will be those that can access capital to invest in their technological structure and health protection processes and gain market share.
If these last years have taught us anything, it is that anything can happen in the short term. Despite this uncertainty for the tourism industry, we have every reason to be optimistic in the sector if we look at the long-term opportunities.
Written by: Andres Sucre
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eCommerce frauds result in more chargebacks and less safe purchases.
Sometimes, there is an irrational fear of sharing sales history when hiring a payment gateway and/or new service provider, leading to a loss of opportunities for improvement, safe purchases and growth; driving an increase in fraud if the rules and parameters of the business rate improperly calculated. — Pamela López, Payments Manager.
The value of Reservamos SaaS in payments outlines in its extensive experience and the use of different control and measurement tools for payment attempts. Each industry, sector, and company presents distinct challenges, so it is necessary to know and create unique rules for each season and type of service to secure safe purchases.
- The needs, such as processors and anti-fraud systems, may be different. Evaluating possible scenarios and sales history will help adapt the parameters and tools needed.
- We monitor the acceptance rate, fraud level, user behavior, and changes in the market.
- We use machine learning tools as the first review filter and payment processors or aggregators to transact. Sometimes two step-verification when applicable, as long as it does not limit or harm the conversion rate.
There are some concepts and required procedures you need to know if your bus company has an eCommerce platform:
Chargebacks, what are they, and which are the most frequent?
eCommerce frauds result in more chargebacks. A chargeback is a process where a buyer communicates with the card issuer to unaware a transaction or reporte a problem in search of paying compensation.
There are several types and scenarios of chargebacks. They are usually fraudulent or friendly, for example:
- The cardholder does not recognize the transaction (fraud).
- The cardholder did not authorize the transaction.
- The consumer did not receive the goods or services they purchased.
- The consumer claims that the goods or services do not match the offer.
How payment acceptance impacts sales?
Payment acceptance measures the proportion of purchases accepted in respect of payment attempts.
- Unique payment attempts / Completed purchases = Acceptance rate %
The acceptance level depends on the market and the payment method to be measured. According to information shared by Visa in March 2021, the general acceptance in the payment sector in LATAM was 56%, Mexico was 48%, and Colombia was 49%.
Reservamos SaaS offers a high impact in increasing the acceptance rate and a low volume of fraud.
Many companies make the serious mistake of limiting or lowering their payment acceptance rate because they have 0% fraud. It not only limits their potential for sales growth but denies or blocks a service to users who may not be fraudulent. — Fernando Aguilera, Head of Sales & Expansion.
Understanding the process.
Market and current behavior.
2020 was an atypical year for eCommerce due to restrictions. Goods and services purchases through online platforms increased by +30% globally. As a result, besides boosting the market, the digital market also changed consumer behavior:
- The purchase frequency becomes difficult to predict. The consumer takes short-term actions to avoid complicated scenarios.
- Buyers use new payment options and registration.
- Users search for destinations that were not so attractive before.
In this new market, fraud increased considerably, along with the theft and testing of bank databases, for which it became essential to prioritize specific fields.
The challenges for the coming years are: to adapt and implement new analysis techniques due to the fact that consumer behavior is now more complex and changing. At Reservamos SaaS, we are always looking to implement new tools and parameters that minimize the percentage of chargebacks and increase the rate of payments acceptance to reduce a company’s losses and increase its income.
Do you also want to ensure safe online purchases for your travelers and increase the conversion at your eCommerce? Contact us at: [email protected]