Virgin Holidays on how it plans to go all in on digital transformation
Saul Lopes has three things that marketers embarking on digital transformation most certainly covet: management buy-in, a culture that embraces agility and risk-taking, and a collaborative team focused on solutions, not finger-pointing or fiefdoms.
Lopes, customer lifecycle lead for Virgin Holidays, has played an integral part in the company’s ongoing global digital transformation. So far, the changes from the digital transformation have led to performance improvements such as an increase of 149% in the total attributed revenue from communications over the past three years, an 11% jump in the upsell rate, and a 4% increase in pre-departure Net Promoter Score (NPS).
But Lopes is no maverick. He emphasizes that Virgin Holidays’ successful (and ongoing) transformation was and is a team effort. “The whole business wanted change,” he says. “The leadership wanted transformation, and so did all of the teams.”
Embracing global digital transformation
It was a perfect storm. Virgin Holidays hit rough seas in 2014, which was a negative year in terms of profitability. A new marketing director joined the company and set up a new team. The travel market was changing as an ever-increasing number of customers researched and booked high-end holiday travel online.
“We knew we needed to answer to that market and to answer to customers’ increased expectations,” Lopes says. “We needed to start doing things differently if we were going to be successful as a global travel brand.” That was the start of the company’s transformation journey.
An essential element of that transformation was rethinking the customer experience. For Virgin Holidays, that meant owning the customer relationship and creating a seamless experience from “look to book” — from the first interaction, through booking, while on holiday, and when customers return home.
“Our strategy, ‘the way to win,’ as we like to say, is to win on experience,” Lopes says. “We’re not the cheapest in the market; we charge a premium, so we have to make sure that our customer experience is better than all of our competitors. We’ve invested heavily in focusing on how to better that relationship.”
For his part, in early 2015 Lopes and his team reviewed customer comments and the company’s communications to answer the question, “How can we improve what we’re doing?” The short answer: Find ways to improve Virgin Holidays’ communications without any major IT platform or process changes and show some quick wins.
The business problem Lopes was looking to solve to get those quick wins was gaining the ability to do advance testing at scale with a small team. “I didn’t have the resources to do advanced testing. If you’re creating five or 10 variants in each email you send, for example, and you’re sending a high volume of emails, that’s a lot of work for a small team,” Lopes says. “We wanted to increase the way we test, and we wanted to increase our reach in terms of communication, but we also didn’t want to do any sort of big platform changes.”
The solution came in the form of a recommendation to talk with Phrasee, which uses AI to test email subject lines. “I wasn’t looking for an AI solution. What I found is a solution to my problem,” he says. “What we always need to focus on is that business problem and then how we’re going to solve it. And then we’ll go to the market for a solution.”
Lopes brought in Phrasee and in two weeks his team had it set up. He and his team gave Phrasee all of Virgin Holidays’ brand guidelines and all its previous subject lines. “Out of that Phrasee was able to create a specific language just for our business and our brand; so, right from the start we were able to create a very ‘Virgin’ voice,” Lopes says. “As Phrasee learned and tested, the language just got better and better.”
Using Phrasee, Lopes had a quick way to automate the test-to-learn process and remove the human bias around subject-line decisions. “As you know, people love talking about subject lines and everyone has an opinion,” he says. “So, I was able to automate all of that conversation.”
It took a while to get comfortable letting Phrasee’s AI take the wheel. “We were fiddling around with the AI algorithm and changing too many of the subject lines, putting our own human bias in it,” Lopes explains. “After a month we trusted Phrasee’s AI to do its job and we started seeing our open rates grow.”
The lift was two percentage points. “Since our customer communications generate us so much money, we’re talking multimillion pounds of revenue,” Lopes says. “Phrasee showed an immediate return on investment, and it was that improvement that spearheaded the change for us to invest more in technology.”
Looking back, Lopes admits that he was a little nervous about implementing Phrasee. “It was so easy to set up and we were Phrasee’s first full-service client,” he says. “And, it was a risk at the time because AI for subject lines wasn’t really talked about three years ago when we signed up.”
Fortunately, he says, the Virgin brand is known for risk-taking and for trying new things. “I have to admit,” he says, “it was probably one of our best decisions.”
Personalization without hesitation
In fact, such a good decision that Lopes’ next move was to find a way to create a better customer experience, and as a result drive up NPS and revenue, through personalization at scale. The solution was implementing Movable Ink and then Adobe Campaign.
“We had Phrasee giving us the reach with subject lines, and then brought in Movable Ink to help us with personalizing our email content at scale very, very efficiently,” Lopes says.
Lopes and his team assessed the market prior to selecting Movable Ink. The solution provides the ability to design emails without knowing how to code HTML, “so we were able to move creative from PhotoShop into Movable Ink, which ‘translated’ it into HTML code, and then we were able to add personalization, he explains. “The problem I was trying to solve was, ‘How can we be more personalized in our campaigns without changing our ESP?’ Movable Ink was the best solution to that business problem. That’s how we’ve gone through all our approaches. I never say, ‘I want to find a certain technological solution.’ I go to the market on trying to solve my business problem.”
Lopes and his team were able to implement Movable Ink and launch new campaigns in about four weeks. Using Movable Ink, they were able to easily change creative and add in personalized content, such as available appointments at customers’ local store and live weather feeds of specific destinations the company sells travel packages for.
“We were able to provide more personal communication and drive urgency,” he says. “We could compare the weather in a customer’s city in the UK versus where they could be, like in hot and sunny Orlando. Our most successful campaign is our weather-based activation, which is easy to do in a place like Britain that has bad weather all the time. It’s a campaign that fits our market very well. As a result of these campaigns, Movable Ink gave us lots of return very quickly.”
Phrasee and Movable Ink were up and running for about six months delivering results that set the stage for Virgin Holidays’ major transformation.
Quick wins pave the way for bigger shifts
Although Phrasee and Movable Ink were delivering excellent results, using three tools (a campaign manager being the third) to create an email was labor-intensive and time-consuming. “The data was flowing from one tool into the other, so it was taking us a whole day just to build the email,” Lopes says. “It’s just not an efficient way of working. We needed to rethink our campaign management tool. That’s when we brought in Adobe Campaign.”
One reason for selecting Adobe, Lopes says, is that he wouldn’t have to worry about the existing technology; Phrasee and Movable Ink are ESP agnostic, so all of the templates and creative work just went from one system to another without any issues.
Lopes and his team set up Adobe Campaign in six weeks, from implementation to sending their first email using the tool. “We were able to increase awareness and opens by 60% in the very first big campaign we did on Adobe,” Lopes says. “Traffic to the website increased by 33% and our margin during that campaign, total revenue generated in terms of communications, increased 31% during that period. So, we were able to show significant business value with the change.”
But those weren’t the only benefits. “Another good thing about bringing in Adobe Campaign is that it triggered us to rethink our customer data model,” Lopes says. “And by rethinking the customer data model, we were able to reduce the email creation time from a whole day to an hour. That then freed up time for my team to start focusing on other deliverables.”
Rethinking the data model was important to the broader digital transformation, as well.
Winning on experience and building a seamless customer journey, Lopes says, involves extensive data modeling, organizing customer data to track customers through their omnichannel experience, and tracking the effectiveness of marketing channels and customer touchpoints.
“When we brought in Adobe Campaign we had a problem that many companies have: lots of different pots of customer data all over the place, organized in a complex way so only database developers could actually understand how to use our customer data,” Lopes says.
So, Virgin Holidays reorganized its customer data from the ground up. Lopes says: “We asked, ‘What experiences do we want to deliver in the future for our customers? What are the data requirements for those experiences? Let’s build the customer data model that can service those experiences.’”
A newly recruited customer analyst worked closely with Virgin Holidays Bi team to review the company’s 44 customer data tables and were able to reduce it to seven data tables that are easy to use. “Any person on my team can understand them,” Lopes says, “which has reduced the amount of time we spend handling or looking for customer data and allows my team to spend more time thinking about how they can improve the experience.”
Getting there wasn’t easy. It required extensive modeling over the course of 2017 to consolidate all of the customer data in a single source, organized that in a way that makes sense and is accessible to business users. “We joined our transactional data set with our online browser behavior data set and with our retail data set,” Lopes explains. “We had to combine a lot of different areas to get that single customer view and understand how customers are navigating through their omnichannel journey. It gives us an all-encompassing view of how people interact with us between the ‘look and book’ window.”
Understanding the customer journey
The single customer view enables Virgin Holidays to track how customers interact with all of it's retail, email, and online channels. “For example, I know that 40% of the people who look at our communications are going to purchase retail,” Lopes says. “Knowing that, I was able to create a whole strategy around campaigns pushing people to the retail shops because I know it’s something they do naturally.”
Customers’ omnichannel journey led Lopes to use an omnichannel attribution model, which, he points out, delivers far better results than a last-click model. “Our attribution model, in terms of revenue, is five times higher than the revenue using a last-click model,” he says. “If we put all our channels side by side, customer communications is the second-biggest revenue driver just after PPC. So, it’s a very important channel for us.”
The omnichannel attribution model also highlights the value of his team’s efforts. “The attribution model shows the effectiveness of our marketing campaigns and our marketing expenditure across all the channels,” Lopes says, “which helps with funding the transformation.”
Omnichannel attribution is also important because of the view it provides into individual channels and how they interrelate. One of Virgin Holidays’ transformation goals is to grow digital sales to 50% of total revenue. “We’re always trying to optimize our online journeys, push people online, and encourage them to self-serve,” Lopes says.
This shift is integral to the customer experience not just before a purchase, but also after it — before a customer’s holiday begins, Lopes explains. On average, Virgin Holidays’ customers book six months in advance, and there are a number of tasks they need to complete during that time. “By revamping our customer communications during post-purchase, we were able to increase self-service by 7% in a year.”
That focus on digital doesn’t mean there’s less emphasis on Virgin Holidays’ retail operations. In fact, over the past four or five years it’s the channel that seen the biggest growth, Lopes says. “A family holiday is a high-transaction-value item, and we’re seeing that people like to have that human reassurance of talking to an agent and asking the agent about their destination.”
Virgin Holidays has launched what it calls a V-room retail concept store. It’s designed more like an airport lounge than a travel agency, Lopes says. “It has a bar and dining areas, and you can talk to agents about your holiday plans,” he says. “We’re reimagining the travel agent experience.”
The company is also redesigning post-holiday communications. For example, as soon as a customer comes back from holiday, the retail staff calls that customer to ask how the holiday went, what did they enjoy most. “It’s probably our most successful campaign, just giving that personal touch when someone comes back from holiday,” Lopes says. “So, we give lots of different cues to our retail agents to support them in their efforts to deliver better customer experiences.”
Many channels, one voice
That cross-team collaboration is one way Virgin Holidays is speaking to customers with a cohesive voice. Another is by unifying customer communications from marketing, service, and other customer-facing departments through Lopes’s team.
Once Virgin Holidays addressed transforming its marketing communications, the next area of focus was service communication. “That’s when the responsibility of my team grew from only doing marketing communications to drive revenue to also focusing on NPS and service,” Lopes says. “We launched our service transformation, connecting our reservation engine to Adobe, using Adobe to consolidate all our customer communications into one tool.”
This was a big shift from Virgin Holidays’ previous approach. “We had at least 10 different departments communicating to customers in different ways with different objectives, creating a disjointed journey,” Lopes says. “And sometimes we had multiple teams with the same sales objective, such as trying to upsell, all talking to our customers.”
So, Virgin Holidays conducted a year-long customer journey exercise to lay out the customer journey and consolidate customer interactions through one team: Lopes’s. “We set one vision with a clear strategy of what we aim to achieve across that journey and at each moment within that journey,” Lopes says. “We reorganized and changed our ways of working so we could look like a consolidated company to our customers — because what we were doing was exposing a trail of complexities to our customers and we don’t want that.”
The result is a more consistent and unified customer journey, Lopes says. Also, consolidating communications and having one team “own” the customer journey enables Lopes and his team to add personalization to key points in the journey. For example, creating a personalized animated video of a customer on her holiday or providing travel tips about a customer’s specific destination. The benefits to the business of those improvements to the customer experience include a 25% increase in pre-departure NPS, a 2% increase in overall NPS, and an 11% jump in Virgin Holidays’ upsell rate.
“Customers started spending more with us — not only purchasing more packages and add-ons but also spending more on them,” Lopes says. “So, we’re now in a virtuous circle where we’re giving a better experience and we’re doing better upselling.”
Bigger, stronger, faster
Changes to the customer experience, customer journey, and supporting technologies don’t happen in isolation. Staffing and processes need to change, too.
Lopes’s team grew in size along with its objectives, such as supporting the service team’s communications. One key addition to his team was a customer analyst who was tasked with data management and helping Lopes and his team understand Virgin Holidays’ customer data sets to drive personalization and achieve their goals.
In terms of processes, Virgin Holidays changed the way agents contact customers. “It used to be a free-for-all, where every agent could contact customers when they wished,” Lopes explains. “We then standardized so there are clear points in the customer journey where the agents now contact our customers.”
That was a significant business and culture change for the company. Another was creating a process where all of Virgin Holidays’ customer communications gets channeled through the same department, Lopes’s, creating a bird’s eye view of what each customer is receiving. “That was a big organizational change and IT change,” he says.
Despite all the significant changes, Virgin Holidays’ digital transformation was relatively smooth sailing.
“Things went smoothly, but, obviously, in a big transformation there are always obstacles to overcome, like getting the data correct,” Lopes says. “How you solve the issues is where you really find success.”
For Lopes that means his team and his partners don’t waste time blaming each other or trying to figure out who’s to blame when a problem arises. Instead, they ask, “How are we going to work together to solve it?” Says Lopes: “That’s how we start the conversation. And that’s why our implementation has been so successful. I treat partners like members of my team, so everyone is energized, engaged, and invested in our combined success.”
The voyage continues
One certainty about digital transformation: It’s an ongoing journey — and already becoming synonymous with business transformation. So, of course, Virgin Holidays has other transformation initiatives on its roadmap.
“Our next big project is determining how we’re going to give our frontline sales staff better tools to manage our customer interactions, so we’re looking into CRM systems,” Lopes says. “We’ve consolidated all of our customer data, but that can only go so far if it’s not in front of our agents so they can act on it, engage with it, and deliver a better customer experience.”
Working through those big changes are business as usual for Virgin Holidays. Its willingness to take risks and rethink strategies and processes is all about enhancing the customer experience—and improving business performance as a result.
“Everyone at Virgin Holidays is focused on our customers and on giving the best service possible,” Lopes says. “So, as soon as they see an opportunity where they can actually do it, everyone is onboard to make the necessary changes. It’s been great to have all that support from leadership all the way down to frontline sales.”