Here’s a good story about how Expedia was missing out on $12 million in profits because of one optional input field on the website, and how they rectified it using SAS Analytics.
In a panel discussion at the SAS Premier Business Leadership Series conference (Oct 27-28, 2010) in Las Vegas, Expedia VP global analytics and optimisation Joe Megibow explained (see video, h/t to Silicon.com) how profits surged overnight after analysts found a design issue that needed to be corrected.
Apparently some transactions were being left incomplete after customers took the time to find a hotel, fill in all their travel and billing information and click the ‘Buy Now’ button.
After analysts correlated data from all these failed transactions, one common thread came up. All these customers were confused by the optional ‘Company’ field under ‘Name. ‘ They were putting in the Bank’s name into the company field, which then led them to fill in the bank’s address into the address field below, instead of their own address.
This would cause the address verification to fail during credit card processing and the customer would leave the transaction incomplete. What Expedia did was take out the ‘company’ field, and it immediately boosted profits by $12 million. Megibow said that they had found 50 to 60 of these kinds of things using analytics.
Another sales boost comes from Expedia’s use of ‘to the minute’ analysis to optimize the sort order of results to a customer’s search for hotels. When SAS flags an especially good deal from a hotel, the Expedia web site prominently displays the listing.
SAS predictive analytics has also helped Expedia capture and track preference details after a hotel is given high marks from travelers and regional market managers. Dan Lynn, Expedia’s Director of Strategy and Customer Insights, says “We’ve found they receive a five to 10 percent boost in conversion for the following year.”
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