Tech­nol­ogy: Loy­alty schemes

The Business Travel Magazine - - Contents - Linda Fox

The con­cept of loy­alty and how trav­ellers are re­warded is long due for a shake up and it’s got ev­ery­thing to do with data.

Air­line fre­quent flyer pro­grammes have ac­cess to vast amounts of data – from trans­ac­tional and be­havioural to so­ciode­mo­graph­i­cal – but car­ri­ers are not re­ally us­ing it, yet.

But there is recog­ni­tion of the value there for air­lines as well as trav­ellers. Imag­ine the po­ten­tial to re­ally serve com­pa­nies at a cor­po­rate level and/or the in­di­vid­ual busi­ness trav­eller if the dots were joined.

“It’s a cur­rency you can only spend in one chan­nel and you know how much peo­ple have in their ac­count so it’s a gold­mine,” said Do­minic Matthews, Group Head of Loy­alty for Amadeus. He was part of a panel along­side se­nior air­line ex­ec­u­tives at the re­cent CAPA Air­line Leader Sum­mit in Dublin who de­bated

the is­sue. They stressed that it’s about chang­ing the mind­set, get­ting the rel­e­vant skills on board, en­sur­ing pro­grammes are rel­e­vant for to­day’s trav­ellers and de­vel­op­ing the tech­nol­ogy to bring it all to­gether. Set­ting the scene, Evert de Boer, Man­ag­ing Part­ner of On Point Loy­alty, said that 35% of all credit card spend in Aus­tralia earns Qan­tas fre­quent flyer points.

Pat Byrne, Ex­ec­u­tive Chair­man of Ci­ty­jet, be­lieves loy­alty is about re­ally know­ing the cus­tomer and “build­ing an emo­tional re­la­tion­ship” with them.

He says loy­alty has to be earned and it’s down to two prin­ci­ples: “Fre­quent flyer pro­grammes ig­nore the two most im­por­tant things in the cus­tomer vo­cab­u­lary – to be recog­nised whether dur­ing the book­ing, at the gate or on board, and to be ac­com­mo­dated or apol­o­gised to if my needs can’t be met and given ac­cess to some­one who can help me. That’s where the money is not in­vested. The last thing I want is an­other free seat.” Juha Jarvi­nen, Chief Com­mer­cial Of­fi­cer of Fin­nair, pre­dicted that the cur­rent form of loy­alty schemes would not be around in a few years time. He be­lieves they will evolve to be­come more of a life­style prod­uct with part­ner­ships and prod­ucts that are rel­e­vant to the au­di­ence. Get­ting there is not go­ing to be easy. Do­minic Matthews, Global Head of Loy­alty for Amadeus, said air­lines have to deal with the ten­sion be­tween rules and reg­u­la­tions they have to com­ply with and the de­sire and drive to dif­fer­en­ti­ate.

He be­lieves bring­ing in peo­ple from other in­dus­tries with ex­pe­ri­ence in dig­i­tal trans­for­ma­tion would help.

Byrne, who sup­ports this view, said: “We are great at putting out fires but if you re­ally want to mon­e­tise the pas­sen­gers it’s a dif­fer­ent skill set. There’s knowl­edge in the air­line but I would have some­one from Google to lead it.”

He drew the con­ver­sa­tion back to data say­ing that air­lines lack that per­son “who lies awake at night say­ing ‘how can I serve my cus­tomers bet­ter’”.

“You have got to have some­one who is re­ally hun­gry, alive and alert to the pos­si­bil­i­ties,” he said.

Byrne added that money needs to be in­vested in look­ing af­ter ex­ist­ing cus­tomers and re­ward­ing their loy­alty.

“We are in an in­dus­try where we have a fan­tas­tic op­por­tu­nity to build up a re­la­tion­ship be­cause we mess up a lot. If we re­cover well then that per­son will dine out on it. You can’t do that if you are not recog­nis­ing your cus­tomer and giv­ing them ac­cess to solve that prob­lem. That’s where the dol­lars should be go­ing.”

As a fi­nal word, pan­el­lists were asked whether the in­dus­try is on the “cusp of rev­o­lu­tion in loy­alty or if it's busi­ness as usual in three years time”. Byrne felt it would be a con­stant re­cal­i­bra­tion of loy­alty and recog­ni­tion and both Matthews and Jarvi­nen broadly sup­ported this view say­ing schemes would evolve be­yond flights to be more about life­style ex­pe­ri­ences.

Air­lines are not mak­ing the most of the data at their dis­posal in fre­quent flyer pro­grammes, writes

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