Aligning distribution and sales goals to propel growth

The Evolution of NDC: Aligning Distribution and Sales

In the ten years since New Distribution Capability (NDC) was launched, early adopters have deployed many strategies to encourage travel sellers to move from consuming content through the Global Distribution Systems (GDS) to NDC.  Airline commercial leaders have rewarded travel sellers for aligning with their distribution goals by using sticks (such as removal of access to certain content) and/or carrots (segment fees, lower pricing). As a result of this alignment, they have been able to drive value from travel sellers more effectively. 

Over 450 travel sellers are now connected to Accelya APIs, supporting 20 airlines, and over 50,000 IATA locations worldwide actively purchase NDC content through Accelya-powered channels. As such, NDC’s normalization is being achieved. With normalization comes a requirement to further evolve the use of incentive tools to continue maturation.

A natural tension exists between distribution and growth goals.

So, it’s a major challenge to ensure travel sellers are actively incentivized to move sales volume to non-legacy channels at the same time as delivering on growth commitments.

In Accelya’s engagements with airline leaders who have both distribution and sales goals at the forefront of their objectives, we’ve been discussing these significant topics:

• Distribution is no longer a separate negotiation with travel sellers: Making distribution goals part of broader commercial discussions, handled by sales and account managers, is vital to making NDC adoption at scale happen.
• Aligning distribution and sales goals requires change management: Empowering sales and account managers to manage negotiations that impact on a broader scale requires upskilling and alignment across departments.
• Understanding channel profitability is vital: To make strategic decisions around where and when to deploy incentive dollars and invest in channels requires more than just understanding and measuring the cost of sale associated with budget achievement and yield.
• Access to content will rapidly become the number one incentive: As NDC continues to mature and more airlines use merchandising technology such as Accelya’s, the products travel sellers can retail will become their defining proposition. Using this to stimulate growth and ancillary sales will become a central tenet of an airline’s commercial strategy.

A frustration voiced by many airline commercial leaders is that addressing these challenges requires improved supporting technology. New sales planning and incentive management tools, backed by data science, should help airline commercial leaders steer travel sellers toward preferred modes of distribution and propel growth.