The TUI Group, formerly TUI Travel PLC and TUI AG, stands astride Europe as one of the biggest and most diverse providers of travel products. These range from travel guides such as Isango, to English language training trips like i-to-I TEFL.
Two of TUI’s best known brands in the UK, however, are Thomson Holidays and First Choice. These two brands have been household names in the package holiday market for decades and they similarly hold long standing affiliate programmes that CJ manage.
TUI has not relied solely on its scale however and has continually pushed its affiliate programmes with CJ to adapt and innovate. In 2014 this hunger was rewarded with the both the Travel & Leisure Award and Best Managed Programme award at the Performance Marketing Awards. CJ return to the PMAs this year as sponsors of the Third-Party Performance Marketing Innovation category.
Challenge
TUI has always been a proponent of understanding the true value that the affiliate channel drives and how this sits within the wider marketing picture. TUI therefore invested heavily in both Econometric and Clickpath analysis in 2013. It is this analysis that identifies areas that could be developed in order to feed the top of the sales funnel.
Alongside improving its understanding of the channel, TUI recognised the importance of understanding its own nuanced business needs and how affiliate could help drive value in more ways than simple sales volume. As such, TUI identified two key areas where the performance channel could help improve the profitability of the business. Firstly, in driving more high-margin products and secondly balancing demand on destinations with surplus capacity in the off-season for its Thomson Holidays and First Choice brands.
Solution
Off the back of TUI’s Econometric and Clickpath analysis it was found that content sites had a higher than average influence on the final decision to purchase – a theory long held in the affiliate community. As such, TUI embarked on a programme of actions to increase the level of interaction with content sites, including offering greater insight into TUI business mechanisms and adjusted remuneration.
It’s important to note, however, that content’s greater than average influence is not a dismissal of the value that business models such as voucher and incentive provide and these still remained at the heart of TUI and CJ’s success in 2013. The performance channel is unique in its proximity to the purchase decision and is consequently an excellent arena in which to tweak consumer behaviour in order to arrange a holiday for a slightly different time or to book at a particular resort. TUI therefore utilised a mix of increasing affiliate knowledge regarding its higher margin products and adjustments to commission structure in order to change consumer demand.
Process
CJ and TUI’s push to increase activity with content sites focused on the core fundamentals any affiliate programme should be offering, but surprisingly few do; regular affiliate days, weekly newsletters, and 1-2-1 publisher meetings, alongside feeding back information to publishers such as popular destinations or banners with strong conversion rates. This interaction was also accompanied by publisher surveys to understand what publishers need more of in order to help sell increased volumes, and consequently improved affiliate tools were offered.
The approach to driving increased volume in the off peak season and more sales from high-margin resorts was also built on the core performance principles, offering higher cashback rates on certain resorts or times of year including adjusting the commission structure of publishers to incentivise them to promote the desired products. This meant that publishers had potential to earn more commission, rather than being squeezed, whilst TUI improved its profitability – a smart use of budget.
Results
These simple but well researched and well thought through strategies have proved highly effective for TUI, not only driving successes in the key areas targeted but also coming together to drive massive overall revenue growth for the Thomson and First Choice brands by over 30%. The strategies initiated from deep research, alongside understanding the different ways in which the affiliate channel can provide value, have become the foundation for TUI and CJ’s subsequent affiliate strategy for 2014 and beyond.
This success isn’t enough for two ambitious companies such as TUI and CJ and they are already embarking on additional research projects, such as variations in on site behaviour from affiliate traffic.
TUI online marketing manager James Moy remarked:
“The data which we acquired has allowed us to get a deeper insight into our customers than we had ever previously possessed. We have now put this data to good use and invigorated our performance programme to achieve far beyond our expectations. We were thrilled to be recognised for these efforts at the PMAs last year and we hope that the work we’ve continued to do this year puts us in the running again”