Nuts & Bolts - Case Study: CheapAir Customers Stay on Board With Email
Ahead of its time, CheapAir switched from being a phone-to-FedEx travel service to an entirely online entity in 2001. Although Orbitz joined the Web ranks that year—and Expedia and Travelocity had already been there since the late '90s—most travelers were still booking flights offline.
So says Gregory Samson, vice president of marketing at Calabasas, Calif.-based travel site CheapAir. But as "with-it" as CheapAir was, the company's email system was woefully behind the times when Samson came on board in October 2010. Campaigns took 24 hours to send and, while sending, it almost seemed as if the lights dimmed—the servers were so taxed that the rest of the company's computing needs came in second.
"I've tried to block it out of my mind at this point," Samson jokes.
Samson set a priority of improving the email system so his marketing team could better communicate with customers. In the first quarter of 2011, CheapAir hired Redwood City, Calif.-based email service provider StrongMail.
The tool adapted to CheapAir's data model and, very quickly, the travel company doubled email frequency to the 1.5 million customers in its database. Samson says subscribers now receive marketing emails twice a week, in addition to any ticketing confirmations or requested special alerts.
"We communicate with our customers to send them the latest airfare deals and cheap airline ticket offers from their city to popular destinations," he says. "And also to send … a targeted set of the best vacation deals for them."
CheapAir also can segment customers and tailor campaigns based on analytics—two new capabilities.
"Once a data source is available to us as a marketing team, we can run with it," Samson explains. "We can improvise and evolve the communication using that data pretty freely."
Even non-technical members of the marketing team can create campaigns now. Before, Samson says campaign creation involved customized work from the information technology team.
Email is the No. 1 channel CheapAir uses to retain customers, according to Samson. Since adding the new ESP, sales credited to that customer segment grew 112 percent from the first half of 2011 to the first half of 2012. That happened because CheapAir grew its subscriber base by 500,000 during that timeframe, or nearly 50 percent.
CheapAir's marketing team pays attention to when customers open emails and sometimes even chooses to lower the volume of emails and slow down delivery to achieve optimal results—using only a small percentage of the new email system's throughput capabilities. And now, the lights don't figuratively dim because the ESP servers are offsite.
"Now we work like clockwork," Samson says. "And, beyond that, we're also testing and optimizing things like when we send our messages and are able to tell through the analytics and data that we have. Not only do we get the message out when we want to get it out, but we are also sending at more optimal times based on the data that we have."
Monthly deliverability percentages now average in the high 90s, but there's no old data to use for comparison, Samson points out.
Thanks to these changes, Samson is able to look to the future so that CheapAir can again be ahead of its time—and even ahead of its customers' final purchasing decisions.
Samson wants to pursue predictive modeling. "I think that there are ways we can look at our information and our communications and not only segment, but start to become predictive of what customers want and need and to meet that, even before we've had the customer express that. So that would be the dream and, I think, the direction we will be going."