United’s digital investments drive up ancillary revenue

    Changes that United Airlines has made in its customer-facing digital strategies are producing tangible results, pushing the company’s ancillary revenues up by double digits year-on-year through the end of the third quarter.

    United’s chief digital officer Linda Jojo recently outlined some “high return investments” that the company has made in its website and its mobile app to analysts and investors.

    Ms Jojo remarked that United enables the customer to purchase and change tickets and ancillary products on its website and app at any time before their trip.

    “If a customer can prepay for her bag at time of ticket purchase, but if she doesn’t actually end up checking her bag, the bag fee is automatically refunded”, she explained. “We are the only airline to do this.”

    If a customer checks the United app when she arrives at the airport and sees she might be too far down the upgrade list, she can purchase an upgrade through the app, said Ms Jojo.

    United’s in-app product offers also include artificial intelligence and gamification features that increase customer engagement, “and drive take rates even higher, especially with our Millennial customer”, Ms Jojo said.

    Although those examples may seem small, Ms Jojo explained, they have helped United grow ancillary revenues by 18% year-on-year.

    Ms Jojo believes there’s a fast paced, action oriented culture at United that frees its employees on the digital team to “partner closely with the business units and quickly roll out and test new innovations”.

    She acknowledged that not all of those work, but the fast pace allows the company to test new ideas quickly and discard the ones that don’t work.