By Kirsten Snyder - Director, Integrated Insight
After much prodding (and harassment) from my husband, I
finally decided to apply for TSA Precheck.
Because I don’t frequently travel internationally, I didn’t think Global
Entry was necessary. However, after
reviewing the application process and prices for both Global Entry and TSA
Pre-check, the government got me to buy up.
Let’s start with what you get with each program. TSA Precheck gives expedited security
processing via a special line, where you don’t have to remove your laptop, take
off your shoes, or any of the other annoying security measures normally
required by the TSA. Global Entry gives
you the same benefits as TSA Precheck in addition to expedited and automated entry
through customs and immigration. And
once you are approved, the program eligibility lasts for five years for both,
after which time you have to go through the application process and pay the fee
again.
Because Global Entry has been around for awhile, the introduction
of TSA Precheck created a quite an attractive upsell structure, albeit
accidental. At just $85 for TSA Precheck,
there is significant benefit for anyone who travels with even mild frequency. And because they maintained the $100 price,
now a mere $15 more you can get you Global Entry. With most of my flying within the US, receiving
expedited security access was of primary interest. However, for $15 and a five year window to
travel internationally, upgrading to Global Entry seemed like a no-brainer,
even if I only traveled internationally once.
With one main objective of these programs being to reduce
staffing requirements at airports, the strong value of the current pricing
should attract frequent fliers in droves.
However, it seems that there is probably opportunity for the government
to increase the prices while still continuing to attract new fliers to the
program, in particular for Global Entry.
When you compare it to Clear, which costs $179 annually and arguably
gives you fewer benefits, it can only be a matter of time before the government
realizes the program is underpriced. How
does this apply to your company? Strong
product stratification can provide significant pricing leverage, creating
upsell opportunities and generating incremental income. A 1% increase in price realization can drive
5% to 10% plus increases on the bottom line.
