Overbooking in Airlines – A necessary evil

Airline overbooking can add up to 3% incremental revenue on an annual basis and hence is a concept taken seriously by most airlines the world over.

Airlines overbook in order to maximize revenues and load factors and ensure that empty seats are avoided (aka spoilage) on high occupancy or sold out flights. Seats may go vacant even after booking for various reasons… Passengers may cancel their bookings, they may be no-shows, they may make duplicate bookings, they may misconnect flights, etc. This process of selling more seats than are available is the ethos of overbooking and by appropriately setting authorization levels higher than capacity to compensate for passenger cancellations and no-shows, airlines increase their bottom lines substantially as the entire amount apart from the meal/amenity costs of the overbooked passenger goes to the bottom-line.

When airline companies overbook a flight, the known factors are the aircraft capacity, current bookings and the company policy on overbooking while the uncertain factors are the no-shows and cancellations, the booking behaviour and activity, the customer reaction to denied boarding and associated costs and the number of unsold seats in a higher cabin.

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Market Perception of Sales-People

How do Customers perceive Salesmen in general?

We have come across quite a few good sales-people who are efficient and effective. They consistently achieve targets and are respected by their clients. However, the majority of sales-people do not meet the above criteria. What do clients feel about sales-people who call on them? In a survey carried out with various customers, the following observations were made about sales-people:

1. They talk too much.

2. They do not listen to our needs.

3. They display a ‘know-it-all’ attitude.

4. They try to sell without understanding our specific requirements.

5. They do not show much concern about our business process.

6. We are bombarded with unnecessary technical jargon.

7. Their follow-up is based only on their needs and not on ours.

8. They are desperate to close the order.

9. Very rarely do they follow up after collecting the order.

10. They become defensive when pointed out about product and service deficiencies.

Excerpt from Contextual Selling®: A New Sales Paradigm for the 21st Century.
Author – Rajan Parulekar

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What makes Training Exciting?

The answer is simple… Think on your feet as a trainer and don’t be afraid to challenge the edges. While trainers teach participants to think out of the box, how often do we do this ourselves?

Our recently concluded workshop on “Guest Delighted” had a participant who happened to be a state level bodybuilder. During one of the sessions on sharing success stories, he was called upon to talk about the ‘blood, sweat & tears’ behind building one’s body for a championship. Apart from the rigorous training schedules, the kind of diet and abstinence of food, as well as zero water consumption during the competition day had the audience gasping in empathy. At the end of this short talk, we asked him if he would be comfortable to do a live demo as he would at a competition. He happily removed his shirt and did a demo for all amidst loud applause from all. Not only did this make him feel good, the participants had a good break from the regular training style and yet learnt something during this short breaker!

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Selling – A science or an Art?

There are two schools of thought about the profession of selling – whether it is a science which can be taught or an art that can be learned through experience?

In a survey of 173 marketing executives, 46 per cent perceived selling as an art, 8 per cent as science and 46 per cent perceived selling as an art evolving into science.

You may have come across some dynamic and charismatic salespeople and to some extent, advertising professionals, who perform consistently well and thus, get excellent results. Such people have tremendous enthusiasm and the gift of the gab. They feel selling can be learnt only on field by making sales calls. The more calls you make, the better is your experience and thus your success rate. While speaking to some of the top performers, I was told that success comes through experience and experience comes through failures. So, stated otherwise, one has to make lot of calls and face challenging situations like facing angry and egoistic customers who make you wait endlessly. It is also about closing a good number of orders, losing some, and while doing so have an inner resolve that one has to succeed come what may.

Essentially this school of thought, which says that learning ‘selling’ through years of “slogging in the field” rather than a systematic and fundamental body of knowledge can be dangerous as John Howard’s dictum “ Experiential Knowledge can be unreliable.” Selling as a science looks at selling from the perspective of human psychology and may also include Hertzberg and Abraham Maslow’s theory of motivation. Some of the conceptual frameworks in selling are: AIDA theory, which stands for getting the Attention of the customer, creating Interest, arouse Desire and enable him to take an Action. The other one is tell them what you want to tell them (Introduction), tell them (the Sales Pitch) and tell what you have told them (Summary and Order Closing).

Excerpt from Contextual Selling®: A New Sales Paradigm for the 21st Century.
Author – Rajan Parulekar

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Celebrate your Successes

A unique way to celebrate and motivate your sales team… here’s an example of the sales team at the Hotel del Coronado outside San Diego which took the art of team bonding to a whole new level when the group jumped out of an airplane to celebrate its June bookings success.

The team exceeded its monthly booking goal by 200% that month, a production level that had not been accomplished since 2005. To celebrate, they all went skydiving.

Vice President, General Manager Andre Zotoff jumps for the sales team.

“I set the goal so high that I never thought that I would actually have to jump out of a perfectly good airplane,” said Cheryl Ferguson, director of sales, who is afraid of heights. “But they are an amazing team and knocked their goals out of the park … so I had to live up to my end of the deal.”

The entire sales team, along with the new Vice President, General Manager Andre Zotoff, and the director of conference services jumped from 13,000 ft (3,962 m) to celebrate the triumph.

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Trainers Humbled

Enhancing DSE Effectiveness 23-24 Aug 2013

Hospitality Paradigm recently concluded two sets of two day training programs for the Distributor Sales Executives (DSE) of United Spirits Limited (USL) in Bangalore and Hubli, Karnataka, India.

We underwent a most humbling experience – when at the close, the DSE’s one by one came up to summarize their learning and experiences over the past two days. Most had never been to a training program and they not only learnt a lot and enjoyed whilst learning; but they also appreciated the opportunity to come in front and speak several times during the program… a first for many of them and an opportunity for them to overcome stage fear. They made two significant observations about us: Firstly, they noticed how passionate we were in ensuring discipline, cleanliness and neatness of the banquet hall set-up… how we detailed issues with the hotel team and insisted on perfection without compromising at any stage. Secondly, they felt very involved as we made them feel comfortable and allowed them to speak in the vernacular; we appreciated their good points instead of pointing out their faults; we tried to relate to their issues and also tried to further understand their business. In short, we connected with them in spite of the fact that language may have been a challenge.

Every once in a while during training, comes a magical moment… this was one of them and it made us aglow with the warmth of purpose in what we do. If we can impact people in this manner, I think we are achieving our objective!

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India at 10 in business travel

India is quickly becoming a major global business travel market.  In 2012, India surpassed Canada to become the 10th largest business travel market in the world, spending a total of US$22.1 billion on business travel. Over the next five years, GBTA [Global Business Travel Association] expects India’s business travel spend will grow at a compound rate of 13.5%, making it one of the fastest growing markets in the world.

Business travel spending in the Asia Pacific region has grown 8% annually since 2000, more than doubling in size and totaling US$393 billion in 2012. China is fast moving towards global dominance of the business travel market, and GBTA now expects that it will surpass the U.S. as the largest business travel market in the world by 2016. Spending in China has grown from US$32 billion at the start of the millennium to US$196 billion in 2012, and China’s meteoric growth is expected to continue, doubling to US$375 billion by 2017.

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More challenges ahead – MICE

The conference and meeting market remains unsettled, according to PwC. It is an important driver of demand and food and beverage spend for hotels, but the outlook is far from fully recovered. Demand remains polarized and price-aware, with residential meetings under buyer scrutiny. The meetings and conference market faces another challenging year, and is often the last demand segment to recover. More supply and changes to corporate procurement policies and sustainability issues around travel and communications technology are still leaving their mark. Shorter lead times, shorter meetings and clients wanting more for less and in less time are also trends.

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Trust-Building with the Guest

If we want our guests to take us seriously, we must first look at building trust-bridges with them. Some of the factors that help develop trust with our guests are:

  • Execute guest requests promptly and attend to their queries and complaints with alacrity
  • Your body language and communication must communicate your openness and care for the guest.
  • Do homework about your guest through ‘in-house guest recognition programs’, MICROS, social media, LinkedIn etc.
  • To create a connection, seek for anything common between the guest and you in terms of Language, Interest, Caste, Acquaintances, etc.
  • Exude confidence – a smile is the shortest distance between two people.
  • Guests would like to deal with competent supervisors / executives.
  • Remember that Competence is created by a) The Organization you work for             b) Similar projects you or your company may have executed and c) You

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The Customer-Centric Airport Cafe

I had a mundane experience recently at Mumbai Airport where I had to while away in excess of 2 hours of my time as I had finished off my work earlier and had reached the airport four hours ahead of my flight schedule.

I decided to go into a Food and Beverage outlet on the first floor as I could not get any available recliners which have been recently placed towards the end of the domestic terminal at ground level. Normally, I would reach the airport just in time for my flight and would pass by this outlet without having any time or need to visit it. Since I had a few hours to spend, I decided I would lounge at this café.

Suffice it to say that the experience was absolutely nothing worth writing about, with surly young wait staff and uncaring supervisors’ one had to wave about for and whose attention one caught only if one waved rather more frantically than the other guests. I watched guests of all shapes, sizes and configurations during my hours here and noticed that all were uniformly served with an apathetic approach.

But my aim on writing this piece is not to dig into the service standards; rather it is to question the service model. When are we really going to get it? What is the customer coming here for? Do we really believe it is for the food or the beverages? Think again!

During my time at this lounge café, I noticed that it was 80-90% full always. However, the focus was not on food or beverages. The users really wanted good old fashioned butt-space… comfortable seating to while away their time until their flight. Yes, there were a few who did come in for the occasional snack or coffee, but the needy hungry of these were not more than 15-20%. Those who ordered food, beer or hot beverages were simply doing it so as to while away their time. The café benefitted from their ‘share of stomach’ simply by default.

So here are my offerings for those who set up these lounges and coffee shops for the proletariat (I do not refer here to the bourgeoisie who flood the airport lounges in their Armani and Louis Vuitton):

  • Why not consider what the modern day frequent flier really wants?
  • Keep the food and beverages – that’s fine… After all it would be nice to have a base revenue provider!
  • Is the seating what the guest would like? Would be possible to have more cushioning, reclining, massaging, etc?
  • Availability of iPad, iPod and what have you. Chargeable by the minute of course.
  • From their table devices, guests should be able to order food, browse the web, hear their choice of music, watch a movie and stay updated with real-time flight information.
  • Would it be possible to do a virtual tour of the airport shops while seated here? Is it logistically possible to purchase and have delivery of purchases done at the table or else at the store itself? An incentive would be required for this, both for the guest as well as for the lounge.
  • Kids play pen in a corner perhaps?
  • Board games, computerized play stations.
  • Reading options… the good old fashioned way with real books (promoted by the airport book stores, to encourage people to sample recent releases and then order & pay for them through their table iPad and have them delivered within minutes to their table)… or else there’s always the iPad offering e-books!
  • Innovative OTC food knick knacks as an impulse purchase take-away, synonymous with the city in which the airport is located.

Many of the above ideas may be chargeable and would be a supplementary revenue stream for the Café apart from the fact that guests will now be offered an experience.

Café owners may argue that not many travelers have the time to spend lounging around at airports, but I would beg to defer. Our fast paced lives today compel us to ‘waste’ our time at airports thanks to airline schedules and force majeure. In fact another way at looking at these innovative cafes could be that travelers may actually be ready to come in earlier knowing that they can truly ‘refresh’ themselves here instead of hanging around in the city with the impending peril of perhaps reaching late for their flight.

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