Don’t target BMW of machine learning when you start with personalization

2nd September, 2019

#MegaAPAC, Kuala Lumpur

 

How can data make a loyal traveller feel more valued? Where do airlines stand in the journey of personalization and in delighting their passengers by recognizing them, plus anticipating and delivering what they are looking for?

No denying that passenger loyalty has become an ever more complex discipline, especially with travellers expecting something more than just a transactional relationship. Airlines have no option, but to live up to such expectations. There is no reason why airlines should be lagging behind the likes of Facebook and other tech companies when one thinks of personalization, asserts airline loyalty and big data expert, Mark Ross-Smith.

Algorithmic optimization isn’t an overnight phenomena; it entails a layered development of ever-increasing complexity. Plus, machine learning isn’t a magic bullet, capitalizing on its prowess demands diligence and a methodical approach. It one of the many building blocks that lays foundation for an astute loyalty initiative. In the initial stages, don’t target BMW of machine learning, recommends Mark. Rather than thinking of AI, focus on simple things. For example, first target simple areas like identifying and addressing a traveller. “How to address someone in the right way at the right time,” he points out. A connection between a brand and its customers will build over time, deepening with each gratifying interaction.

Citing the example of Delta, Mark says the investment in the right areas of data, analytics, CRM etc. makes their loyalty program stand out. It reflects on the performance of the airline, pinned by “good leadership, good technology and apt vision towards marketing”.

In this video interview hear from Mark about personalization and why he equates loyalty programs with market intelligence machines.

 

Mark Ross-Smith was a speaker at the Mega Event Asia Pacific (#MegaAPAC) held recently in Kuala Lumpur, Malaysia.

 

Ai Editorial: Fostering loyalty by being a superapp - airlines ready for it?

Kuala Lumpur, #MegaAPAC

22nd August, 2019

Ai Editorial: Completing every transaction with one app is increasingly becoming common in Asia. How are airlines responding to such a trend, and in the process re-defining loyalty, probes Ai's Ritesh Gupta

 

WeChat, Meituan, Grab, Paytm...the list of apps that offer a convenient all-in-one shopping experience stands out in Asia. Competing against such ecosystems/ superapps hasn't been easy for travel e-commerce brands. These apps are setting a new benchmark when one thinks of loyalty. The level of stickiness with these apps is quite high and certainly not easy for the likes of airlines to grab the attention of a consumer.

But airlines in Asia, especially LCCs, are trying to capitalize on their biggest strength - the aspiration of flying, and in the process certain carrier are evolving as travel and lifestyle platforms. AirAsia being one of them. 

Bonding with infrequent travellers

Airlines acknowledge the gap that results owing to infrequent shopping associated with flying in case of leisure travellers. Such a traveller might only travel once or twice a year, and doesn't engage with the airline for almost 50 weeks. This has been a challenge for airlines. This results in inactivity in the loyalty program. In this case, by working on a travel and lifestyle platform that keeps such consumers with them for their daily or other activities, airlines are getting them closer to flying (via the lure of a free ticket, travel-related offers/ discounts or using loyalty currency for payment) by rewarding them for their non-travel shopping.

The concept of a travel loyalty program operating as “one channel for accruing and spending” points/ miles is drifting away. Being flexible with a program’s loyalty currency is the new norm. Airlines in Asia, be it for Air China or AirAsia, are taking new initiatives. Airlines are looking at ways to strengthen the currency they offer, and increasing the activity within their loyalty programs. The objective is to let loyal customers gather and then spend their miles as freely as cash. Some of the initiatives that are standing out:

  • The likes of AirAsia and JetPrivliege are enabling their members convert their bank/ hotel/ other loyalty reward points to their own loyalty currency. In case of AirAsia, the simplicity with which all of this happens stands out. Its loyalty program's BIG Members are required to register their bank cards or loyalty cards on the loyalty program app. Other than converting their credit card or loyalty points to its loyalty currency, members can decide to convert their points in blocks based on the set minimum conversion amount. 

  • Certain airlines are also trying to expand their reach, and by doing so, offering their loyalty program members the convenience of shopping on 3rd party travel sites. For instance, Air China is allowing members to shop for domestic flight tickets on Ctrip using mileage and cash.
  • When it comes to redemption, while some carriers in Asia are allowing shopper to redeem their currency on 3rd party marketplaces, there are others which aren't ready to let members go beyond their own platforms/ sites. They are evaluating how far they intend to go down the road of becoming a digital currency, especially in the context of redemption options.

"The decision to participate on 3rd party sites depends on several factors, and one of them is related to the profile of travellers. If an airline believes that running a classic frequent flyer program that tends to rely mainly on frequent flyers and can be actively engaged via flying benefits, rewards etc., then they might not open up to be a completely digital currency,” mentioned a source in an earlier interview. “On the other hand, a lifestyle rewards program is different from a frequent flyer programme. For infrequent travellers to open up a range of earn and burn options is understandable. It is important for such progams to understand who their members are, what motivates their purchases, how they eventually spend money etc.”   

Those who are keen on running a lifestyle program assert that their goal is to gather as much as data they can. By letting members collect loyalty currency when they spend on products like fuel and relatively frequent buys like movie tickets or dining out, these programs are stepping up its efforts to track the activity of the user.

It is intriguing to assess how carriers are going about both the earn and burn aspects of their respective loyalty programs, their intentions of being a two-sided marketplace, and to what extent gearing up to offer a "super-app" like experience going forward. But one thing is clear - the eagerness to collect data from a variety of sources and act on it is what is going to drive the future of loyalty.

Executive Profile: Loyalty expert Philip Shelper on blockchain marketing

9th August, 2019

How is blockchain technology coming along? If on one hand there is scepticism around the utility, on the other as the likes of Facebook and Rakuten take a plunge in this arena, the potential can’t be ignored. Intriguing situation to say the least.  

 

Blockchain technology isn’t having an easy time and doubts have been raised over its utility in the arena of loyalty. For instance, blockchain enabling an exchangeable currency within different loyalty programs isn’t a proposition that excites loyalty specialists. Another vital question that has been raised is around the exclusivity of blockchain. Is it the only technology that can, for example, interchange a loyalty currency into cryptocurrency?   

Still the technology promises to contribute in several aspects – curtailing system management costs with smart contracts (minimize systemic errors and fraud to ensure secure and transparent transactions); processing a transaction in real-time; paving way for a secure environment etc. Also, developments pertaining to Facebook’s new cryptocurrency, Rakuten’s foray into blockchain etc., too, have emerged this year.  

Ai’s Ritesh Gupta caught up with Sydney, Australia-based Philip Shelper is CEO of Loyalty & Reward Co, a loyalty management consulting agency, and spoke about various topics, including blockchain marketing. Shelper, who is also one of the course leaders of the recently launched The Australian Loyalty Association’s Customer Engagement and Loyalty Course, believes that Facebook will launch Libra and create the biggest loyalty program the world has ever seen, threatening the dominance of banks and even some governments.

Excerpts:

Ai: As a traveller, how do you assess the scope for improvement in loyalty programs or FFPs being run by airlines?

Philip Shelper: I’m currently a Gold member with Qantas Frequent Flyer, and I have to say the experience is pretty good. I enjoy the lounge access and priority boarding, it’s easier to redeem points on flights, I earn bonus points and I can access a better level of customer service. The odd complimentary upgrade would definitely be a bonus.

Ai: How can blockchain technology play its part in fostering loyalty – can you cite real use cases?

Philip Shelper: All the big advancements in blockchain loyalty are happening in the back-end with enterprise grade implementation. Loyyal is leading in this area. They’re working with major airlines and other multi-national companies with their customised Hyperledger solution to solve some real-world problems. This includes real-time points earn, auto-reconciliation, instant settlements, single view of customer, easier onboarding of earn and redemption partners, and more. They are making strong inroads in the US, Canada, the Middle East and Asia Pacific.

Ai:  How do you think rewarding members with cryptocurrency or cryptotokens can play its part?

Philip Shelper: When I was first exposed to the concept of a cryptocurrency-powered loyalty program several years ago, I was really excited. I loved the idea of earning a loyalty currency which could fluctuate in value, and saw it as something which would really revolutionise the loyalty industry.

A number of start-ups were raising large sums via Initial Coin Offerings (ICO) and it felt like we were on the cusp of a brave new world. This all came unstuck with the crypto bear market which struck in early 2018. Many of the loyalty start-ups saw their currency valuations plummet by 99% which completely killed their member engagement. A few of those early started, such as Incent and LoyalCoin, continue to push forward with new innovations and global expansion, but time will tell if the model is feasible.

At the other end of town are companies such as LINE, Facebook and now Walmart. These companies are looking to introduce their own cryptocurrencies. This will enable cryptocurrency loyalty programs at a scale not ever seen. They will truly revolutionise the loyalty industry. It’s a very exciting space to watch. Imagine 2.4 billion Facebook members earning Libra for sharing, watching advertising, buying products through Facebook marketplace and spending with a Facebook digital credit card.

Ai: Do you think blockchain is being rightly ignored?

Philip Shelper: There was a lot of hype a few years ago as a result of entrepreneurs seeing an opportunity to earn large sums of money via ICO. Within loyalty, lots of ideas were thrown around, including the claim that loyalty was broken and blockchain could fix it by enabling interchangeability from lots of different loyalty accounts. Investors who didn’t understand the loyalty market were enticed by this and poured in tens of millions of dollars. Unfortunately, there wasn’t the realisation that most loyalty program operators don’t support the idea of their loyalty currency being transferred outside their program, as it represents a cost to them.

Thus, the hype totally overpromised. In addition, since the same solution can be delivered without blockchain, although the promise of blockchain is a system doesn’t require a central administrator to facilitate the transfers, making it potentially more cost-effective and trustworthy.

Ai: Can you talk about blockchain marketing? What does it mean?

Philip Shelper: The core principle of blockchain marketing is providing members with full security and control over their data. Companies such as Bron.tech encourage members to input personal data into a secure blockchain data wallet. Research companies can then reward the member for providing them with access to the data in the wallet. This is quite a different model to most loyalty programs where the members data is collected and then monetised by the program without the member having control over the data or being compensated when the program earns revenue from using it.

This approach is still very new and as a business model it is yet to be proven, although events like the Facebook Cambridge Analytica scandal certainly help its cause.

Ai: Where do you see the future of blockchain technology in loyalty?

Philip Shelper: Companies such as Loyyal will eventually scale globally. They will be connected to many major loyalty management systems and thousand of earn and redemption partners, creating an Internet of loyalty which will allow easy connectivity between businesses keen to participate in a global loyalty ecosystem.

Facebook will launch Libra and create the biggest loyalty program the world has ever seen, threatening the dominance of banks and even some governments. Walmart, Apple, Amazon, Rakuten, Google and other tech giants will have no option but to follow. The end result with be a new global financial paradigm, the outcome of which is difficult to predict, but will include loyalty program elements within the frameworks. We certainly live in interesting times.

 

Hear from senior executives about the blockchain technology at the 8th Annual ATPS Asia-Pacific to be held in Penang, Malaysia (27-29 August, 2019).

 

Ai Editorial: Are airlines ready to “own the first and last mile”?

12th July, 2019

Ai Editorial: Airlines need to focus on tapping the mobility as a service (MaaS) segment, offering a truly interconnected experience via their own digital assets covering all of the transportation requirements, writes Ai’s Ritesh Gupta

 

MaaS paves for the amalgamation of numerous modes of transport into one single mobility service, available when users want. Importantly, it results in a digital touchpoint for consumers to access various different mobility offerings.

As Voyego explains, MaaS isn’t just about integration of various modes of transport into one single mobility service, it also simplifies making a choice plus paying for it, all via a single platform.    

In a blog post this week, Voyego highlighted that MaaS “transfers the previously physical transport experience to a digital-first environment and connects with users in the environment in which they are most comfortable and most active in. This allows for a strong personal bond of passengers with their personalized mobility”.      

The potential

So what is driving excitement around the mobility offering? The travel industry has witnessing intriguing developments of late.

Is it the availability of inventory via API? Other than choice, is it the ability to come up with a relevant, contextual offer for a consumer that’s going to propel an airline as a merchant or even in running a two-sided marketplace? And as it is emerging, rewarding points for any mobility-related transaction, too, is starting to happen.

B2B travel technology company CarTrawler has accentuated on the fact that airlines “need to offer travel solutions that can exist alongside car rental – the ride-hailing market alone is estimated to reach a value of $285 billion by 2030 and the overall MaaS market will grow by 25% over the next five years”. According to CarTrawler, only 59 of the world’s 473 airlines currently offer mobility services to customers.

The Dublin-based company this week introduced its global travel mobility platform. According to CarTrawler, it allows airlines to offer a range of travel solutions in-app so that they can “own the last mile” for their customers. CarTrawler asserts that it is time for airlines to maximise revenues from MaaS market, which is estimated to reach a value of $1.75 trillion by 2030. At the time of the release of their new solution, CarTrawler’s Chief Commercial Officer, Aileen McCormack, stated, “By owning the first and last mile, airlines can maximise revenues from this rapidly growing sector and future-proof their business. At the same time, they will be able to offer customers every possible travel option, strengthening brand loyalty as a result.”

Capitalizing on high frequency for loyalty

CarTrawler shared that it is providing a market-first mobility SDK which affords customers the ability to earn and burn loyalty points as they ride.

Referring to the huge potential of loyalty marketing in mobility, loyalty specialist Currency Alliance highlighted the frequency aspect of moving around on a daily basis.

This frequency “…is much higher frequency than customers have with their supermarket – where we find customer engagement levels in the loyalty program as high as 70-80%. Higher frequency in mobility should lead to record levels of loyalty activity with the right mechanics and mix of partners,” stated the company in one of its blog postings.

In one such move, Lufthansa Innovation Hub chose to introduce a reward program for all urban mobility services as well as air, rail and bus travel between different cities in March this year. The initiative was taken considering the evolving mobility pattern shown by the digital-savvy audience and it was decided not to reward loyalty shown for only one type of transport. Collecting and redeeming points for rewards works directly via the app, which lets users collect points with different mobility providers and redeem them for rewards.

Intermediaries, too, are making steady progress. European virtual interlining (VI) specialist Kiwi.com aims at allowing a traveller to move from one point to another anywhere in the world via one transaction. The goal is to aggregate the content of all the ground carriers (buses, high-speed trains, etc.) along with domestic flight content (already have the international flights) and build an integrated transportation network.

 

The end-to-end journey - can one provider do it all? A session about the same is scheduled to take place at the upcoming Mega Event Asia-Pacific, to be held in Kuala Lumpur (20 – 22 August 2019).

Event site: www.MegaAPAC.com

 

A deplorable booking experience for a loyal guest – a case of “franchise fraud”?

Charging a deposit on loyalty stays without disclosure and changing cancellation policy at will - is the hotel industry being plagued by “franchise fraud”?  

 

I recently booked a Marriott property with my Bonvoy Loyalty Points. At the time of booking, a cancellation policy of 48 hours prior to arrival without penalty was displayed to me by Marriott(dot)com. Additionally, there was no information disclosed about a credit card deposit required with this booking. However, the property subsequently charged my credit card on file with Marriott a $122 deposit for this 3-night stay. This was on top of the Bonvoy Points that were deducted.

As my plans changed, I decided to cancel. I then discovered that my reservation had been changed to a “Pre-Pay and Stay” rate that was not cancellable. To figure out what was going on, I did a test booking for another reservation at this same property. It still was coming up with a 48-hour cancellation policy with no deposit disclosed.

Accordingly, I called the elite number of Marriott to cancel. The agent was also unable to cancel my “Pre-Pay and Stay Rate” and so she called the hotel, which informed her that they had changed their policy and that cancellation was now only permitted within 24 hours after booking. The agent also did a test booking while speaking to the property and found the same thing that I had. The hotel showed a 48-hour cancellation policy and there was no information relayed about a credit card deposit.

The property informed this agent that they would refund me the points and the credit card deposit since I was an elite member of the Bonvoy Program. I have since been refunded the deposit and the loyalty points were re-deposited into my account. However, I have a few questions:

- How is a hotel property changing loyalty redemption reservations with a 48-hour prior cancellation policy to a non-cancellable pre-paid rate? 

- Why is the hotel charging a deposit on loyalty stays without disclosure to the customer? 

- Is the property purposefully turning cancellable rates into non-cancellable ones and keeping deposit monies that it collects without disclosing to the customer that a deposit will be collected in the first place?

- Is this franchise fraud? 

 

To look at these questions and many more related to loyalty program frauds, gaming and database breaches, join us at the Loyalty Fraud Prevention Conference (http://www.LoyaltyFraudEvent.com) in Brighton from the 7th to the 9th of May 2019.

Editorial by Christopher Staab

Managing Partner, Ai Events and Co-Founder, Loyalty Fraud Prevention Association

 

Ai Editorial: 2FA improves security, but is it enough for your FFP?

First Published on 26th March, 2019

Ai Editorial: Most enterprises rely on static verification measures to shield loyalty accounts or make sure there is no unauthorized FFP access. But are these enough? Not really, writes Ai’s Ritesh Gupta  

 

Specialists point out that initiatives such as two-factor authentication (2FA) and multi-factor authentication (MFA) can be bypassed by fraudsters (e.g. via SIM hacks or SIM swaps) and result in needless friction for customers. More must be done in terms of ensuring user accounts are secure from fraud. It is clear that many merchants face a tussle when it comes to balancing the need for security and optimizing UX, which is tough to attain if they tend to rely on 2FA/ MFA.

Issues

There are issues, be it for lack of stringent security or increasing friction in the user experience.

It is pointed out that 2FA is not completely secure. Most organizations rely on 2FA for account protection, which can be overcome by fraudsters with deceptive tactics, such as SMS phishing to trick users into giving up their 2FA reset codes; it is also not uncommon for fraudsters to intercept the confirmation SMS messages, proving that 2FA is not sufficient to prevent fraudulent account takeovers. For many other enterprises, the focus on improving user experience takes priority, and therefore no measures for account protection has been taken, leaving their accounts vulnerable to fraud attacks.

Fraudsters don’t find it tough to bypass the feeble implementations, either by intercepting codes or exploiting account-recovery systems. There have been reports about illegitimately amending a mobile device’s accessibility settings, activating a mobile operating system’s overlay accessibility feature, and eventually imitating a user’s clicks to access the legitimate app and committing a fraudulent act like using miles or transferring money from an app. An example of the same is an Android Trojan, being termed as a malware that blends the proficiency of a remotely controlled banking Trojan with a new misuse of Android accessibility services. It is used to target users of the official PayPal app! (The report also explains how PayPal’s 2FA was breached).

Another aspect of 2FA being unable to eradicate the risk completely is owing to the problem of phishing attacks.

Earlier this year, a penetration testing tool challenged the efficacy of 2FA. It emerged that security researcher Piotr Duszyński managed to automate phishing attacks and blow through login operations for accounts protected by 2FA. On his blog, Duszyński referred to the reverse proxy “Modlishka” tool. When users enter their respective passwords, they are recorded in the Modlishka backend panel, while the reverse proxy also prompts users for 2FA tokens when users have configured their accounts to request one.

If fraudsters/ hackers are alert and working to collect these 2FA tokens in real-time, they can use them to log into users’ accounts and set up new “valid” sessions.

Other than feeble authentication, fraud prevention specialist CashShield referred to the limited scope of protection via 2FA. For example, a fraudster who has bought a frequent flyer account from the dark web can bypass the 2FA and proceed to redeem the miles in the account, since there is no security measure implemented at the point of redemption.

Overcoming these issues

Users need to be made aware of unrequested authentication scenarios. Considering the fact in case of 2FA a user is only prompted for authentication when a request is made by them. So users need to reject any initiative related to authentication when they didn’t make any request for the same.Receiving any email that refers to a phone call or push notification for confirmation of one’s identity, one needs to make sure such emails aren’t responded to.

Also when it comes to the user experience, rather than using a blanket rule that forces every user to login with 2FA, real-time surveillance can be used to assess logins in the background, and only logins with borderline risks expected to go through 2FA. This would greatly improve the user experience on the whole, while ensuring that security for accounts is not taken for granted.

Also, machine learning technologies are emerging as an astute option to secure accounts. The efficacy of machine learning, especially real-time machine learning, can be explored for account protection. Rely on both supervised and unsupervised machine learning to comprehend both the historical patterns of use, as well as identify anomalies. According to CashShield, behavioral analytics with pattern recognition will be able to accurately filter fraudsters away from genuine users.

Hear from senior executives about login authentication and account takeover at the upcoming ATPS (21st Century Customer Experience for Payments & Fraud - Airline & Travel Payments Summit) to be held in London (Brighton), UK  (7-9 May, 2019).

 

For more information, click here

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Ai Editorial: Flirting in aircraft or points for quality sleep – what entices you?

First Published on 8th Feb, 2019

Ai Editorial: The last few days have been exciting. Delta and Coca-Cola apologized for introducing flirtatious napkins on-board, whereas Qantas chose to offer frequent flyer members points for quality sleep. No one likes to be pushed for sharing any sort of details, so airlines need to make every interaction count, writes Ai’s Ritesh Gupta

 

There aren’t many great examples of airlines sending over messages that resonate well with travellers.

Irrelevant emails that are all about sale alerts or handing out passengers a form to become a loyalty program member without explaining them what are they being given are most annoying. Akin to handing out napkins suggesting passengers give their name and number to their “plane crush”, an on-board initiative for which Delta and Coca-Cola issued an apology, too. One airline in India, in operation for more than 14 years that I haven’t flown due to a couple of bad experiences, continues to send emails with exclusive offers that remain inapt.

Certain areas where airlines, as an industry, can definitely improve are:

1.    Every interaction counts: Every message or interaction, be it for an ad, email, an offline interaction etc. at the airport etc. counts.

In an era, where companies are looking at understanding a traveller’s intent/ emotion from both digital and offline interactions, being off the mark with an ad or digital experience isn’t done. Also, it is laborious to go deeper into serving across different phases of a journey, but airlines have to be ready to serve the traveller. Rather than just placing a napkin that paves way for matchmaking, how about using means – be it for via single view of the customer or empathizing by any method to understand the traveller. What if a traveller, who is extremely tired after connecting a flight, is informed about the serving of the food? This sort of messaging/ interaction counts a lot.

“Experience needs to be less frustrating,” says airline and hotel loyalty expert, David Feldman.

“When there is an intersection of attitudinal (revolves around delivering superlative experiences and has strong ties into customer support) and behavioral loyalty (might not be a true indicator of one’s satisfaction level, is whether or not customers act loyal by opting to book the same brand), it results in an emotional level of connection. And that’s a sign of true loyalty. A brand has to excel and serve appropriately across a gamut of touchpoints,” highlighted Feldman.

2.    Don’t only look at “digital”: This week, Gartner, in one of its blog posts, mentioned that just keeping the focus on “digital journey can lead your CX program astray”. A couple of key observations:  

·          It’s not just about digital, even though customers are extensively using digital channels, devices, and habits have developed around them. “We are all analog creatures living in an increasingly digital world,” stated the post.

·          To do personalization right for CX, it is essential to be “outside-in,” which means understanding and meeting customer expectations and measuring the impact to the customer.

3.    Being a part of a lifestyle: There is constant discussion around how travel being an infrequent buy for a majority of leisure travellers needs to figure ways to be a part of one’s lifestyle – be it for inspiring them for their next holiday, letting one accrue miles/points for their grocery shopping etc.

What if a travel brand even goes beyond the booking funnel, and becomes an ally for integral aspects of daily routine. Qantas took a striking step in this direction this week. The airline’s frequent flyer members are being an option to earn Qantas points while they sleep using the Qantas Wellbeing app.

Rather than pushing messages on app/ sending emails that are devoid of any meaningful offering (for instance, what’s the point in sending offers that aren’t based around the search on the app or the site? If a traveller is searching for airline’s destination content, then how about stitching 1st party data from various sources and coming up with an offer?) or worrying about how many times a mobile app is opened, it is time travel brands genuinely look at building affiliation so that they become a part of one’s lifestyle. By encouraging healthy sleep and lifestyle habits, Qantas is going beyond its commercial association. The free Qantas Wellbeing app is about – setting bedtime routine, prompts flyers to track how they feel upon waking, assess how better sleep practices affect their mood etc. The app has been developed by Qantas Health Insurance (downloaded over 400,000 times).

Once a brand keeps on adding value, with such assiduous approach, it can only improve upon their understanding of travellers.    

 

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Why ONE Order holds key to a sublime day of travel experience?

First Published on 3rd January, 2019

Ai Editorial: The planned offer and order management systems, and the concept of ONE Order holds a lot of promise, writes Ai's Ritesh Gupta

 

Airlines, collectively as an industry, over the years haven’t really excelled in the arena of servicing during the actual consumption of the product.  

Be it for the day-of-travel-experience or even at the time of disruption, there is a scope for improvement.

Though not many full-service carriers have shown swiftness in this context, a handful of them have embraced agile transformation to enrich the passenger experience. And with IATA’s initiative ONE Order program, based around the concept of a single order record, one can only expect the journey of travellers to get better.

ONE Order - an integral part of data-driven enterprise

Not just airlines, but organizations from other sectors, too, are unable to serve their customers owing to inconsistent, fragmented, duplicated, and siloed data landscape in the typical enterprise. But there are certain challenges that are associated with each industry. Airlines are no different, when we think of legacy methodologies.

Even if airlines look at integrating data and strengthen their infrastructure via customer data platforms, they have to reassess industry-specific solutions. As several pieces of a puzzle have to be sorted to ensure passengers are identified at the time when it is needed, it is vital for airlines to look at airline-specific systems and processes to completely provide an answer to siloed data scenario. For example, if data is being ingested from only a fraction of sources, especially the 1st party ones, it wouldn't serve the passenger in all scenarios. That's where the planned offer and order management systems, and the concept of ONE Order holds a lot of promise.

Considering the significance of NDC and ONE Order, the industry is gradually coming to grips with massive changes. An industry-wide as well as a collaborative effort is being made to ascertain what needs to be done to provide a more robust offer and order structure. The industry today stands at a crucial juncture as far as embracing airline retailing is concerned. Every step in the process is expected to bring in a change. For instance, NDC will continue to create e-tickets. But once a switch is made to ONE Order there will be no tickets.

One Order combines the PNR data information with the E-ticket and the EMD information into one single record.

As envisioned by IATA, One Order will result in the gradual disappearance of multiple reservation records as well as e-ticket/ EMD concepts to be replaced by a single reference travel document. A new standardized and expandable reference will become the single access point for customer orders by third parties (interline partners, distribution channels, ground handling agents and airport staff, among others).

In the One Order environment, all information is contained in a single order.

"ONE Order would have information about the passenger's journey. And order would be created based on the passenger information that the airline has. When you go into modifying the order, the process would require a new offer. And that offer is always created considering passenger details and personalization," shared Ryan Harris, Director at JR Technologies’ Research and Development Centre in Dublin.

As for how this also simplifies servicing the passenger, imagine meeting a request for changing a seat after a boarding pass has been issued. Today DCS (departure control system) is a separate system. Advanced seat reservation happens in reservation, not in DCS. Information goes from reservation to DCS. Today's environment is complex, as it is not a real-time transaction. But with ONE Order and integrated, connected set up, a system like DCS would be having order information in real-time and updating it. "Everything resides in real-time in that order. In the NDC world, it is one source of data - it doesn't need to be siloed or to be transferred from system to another. So there is one copy of data in today's scenario and if it isn't shared with another, then it remains siloed. Tomorrow with ONE Order, there won't be any single copy or lag time," shared Harris.

The significance of historical data that an airline has about an individual and using it to dynamically bundle and unbundle services and products to create a offer has been discussed widely. As data is received by systems in real-time, and with processing capabilities, analytics and application of algorithms, airlines can set out for coming up with a relevant offer or meeting a passenger's needs on the day of travel, too.

Referring to the screen/ interface that is used by the staff at the airport or in-flight attendants, Harris said, "The key here is automation. The agent shouldn't be making a decision. Decisions should be made for them (predictive analytics or pattern recognition). The IT and operational set up (via Offer and Order Management), airlines would have the capability to use big data/ analytics in real-time. Also, the interface can be customized as per the request of the airline."

How would it work?

Airlines aren't starting from the scratch. Just as in case of offers, there would be NDC and non-NDC content, there has to be a way for converting PNR into orders. So one can expect a platform, running in parallel to an airline’s PSS. It would feature complete PSS booking connectivity and document processing capability, converting PNR into orders. This way a master record would be stored. Changes or answering queries in real-time, including on the day of travel, would become a possibility with this central source of truth.

 

For Ai’s 2019 Events, check - www.aieventdates.com

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Emotional connection in loyalty – making it work

First Published on 19th December, 2018

Ai Editorial: When there is an intersection of attitudinal and behavioral loyalty, it results in an emotional level of connection. And that’s a sign of true loyalty. Ai’s Ritesh Gupta assesses where airlines stand in this arena.

 

The combination of technology, data, analytics and even new processes such as IATA’s One Order is expected to play a major role in fostering loyalty going forward.

But this journey is still in the preliminary stages for most of the airlines and there is a long way to go before all of it stitches together a formidable personalized delivery of service. Long way because even though airlines are evaluating and going for technology platforms that prioritize security as well as manage multiple, complex data sources, capturing data from every interaction is far from being a reality. A case in point is interactions on the day of travel – at the airport, at the gate, on-board etc. These can be vital sources of how a loyal passenger rates an experience and what can be done to improve the same and the consumption of the product.

Coming to grips with the gap

Studies have highlighted the issues associated with loyalty. Earlier this year, Google stressed that marketers must think about earning both - attitudinal loyalty (how loyal a traveler feels) and behavioral loyalty (how loyal a traveler acts). Attitudinal loyalty revolves around delivering superlative experiences and has strong ties into customer support. But it doesn't always translate into action. Behavioral loyalty, which might not be a true indicator of one’s satisfaction level, is whether or not customers act loyal by opting to book the same brand. To stand out and earn both attitudinal and behavioral loyalty, a brand has to excel and serve appropriately across a gamut of touchpoints. And one could be interacting via a personal device, at the check-in counter, a kiosk at the airport, at the gate, with a flight attendant etc. This looks like a herculean task if one hasn’t even started yet.

 

Airline and hotel loyalty expert, David Feldman, says, “When there is an intersection of attitudinal and behavioral loyalty, it results in an emotional level of connection. And that’s a sign of true loyalty.” He says it is imperative for brands to focus on the data aspect as well as the value proposition of the loyalty offering. Citing an example of a retail program, he said a customer can join a program, avail a discount coupon frequently and exhibit a habitual shopping pattern. It could denote behavioral loyalty, but may not necessarily result in an emotional connection. “Rather it would be prudent to act on the available data and ensure every push notification or email demonstrates certain value in the offers being sent (or even a piece of communication that is related to consumption of the product),” he said.

Value isn’t just about incremental revenue 

It is laborious to go deeper into serving across different phases of a journey, but airlines have to be ready to serve the traveller.

“Use data not only for offers but rather imagine what is the overall experience like for their loyal travellers. Experience needs to be less frustrating,” highlighted Feldman. Imagine a scenario where a loyal traveller prefers to sit on the aisle, and hasn’t booked such a seat. It is for the airline to understand such preference and offer whenever it can at an opportune time. What’s the point in the seat being available and the traveller noticing the same on his or her own? “Incremental revenue is a natural progression provided an airline is able to understand the journey better and even more importantly makes the journey comfortable and less frustrating,” said Feldman.

Work in progress 

For those who are in pursuit of recognizing each traveller by working out their respective unique profile, there are hurdles but nevertheless there are rewards to be reaped. For instance, as proposed with One Order, it would replace PNR, EMD and E-ticket, and combine the booking and ticketing records into a single customer focused order. Now if one blends this with past data available about each passenger, real-time data, continuously acting on it, and offering a relevant rules-driven automated signal to the staff at the airport, this would only help in servicing the loyal traveller better. 

Of course, there are areas that aren’t going to make all of this a breeze. One area which demands major attention is offline data – say interactions on the day of travel at the airport. The industry is trying to include emotional data into what is already available – transactional and behavioral data. Even as technology is improving to capture the same, airlines, like other organizations, aren’t yet clear with data privacy-related issues.

But airlines can’t sit idle and have to strive to understand travellers better. Otherwise they won’t be able to get closer to earning both attitudinal loyalty and behavioral loyalty.

 

Hear from experts at the upcoming Ancillary Merchandising Conference to be held in London 9-11 April, 2019

Follow Ai on Twitter: @Ai_Connects_Us

 

Ai Editorial: Loyalty currency not ready to go down the “digital currency” road yet

First Published on 10th October, 2018

Ai Editorial: The trend of airlines letting their members burn their loyalty currency on 3rd party sites is yet to pick up in a big way in Asia, writes Ai’s Ritesh Gupta

 

The likes of GetGo in Philippines and India’s JetPrivilege are associated with the biggest shopping players in their respective markets. But the way, for instance, Hilton, is allowing its members to redeem their Hilton Honors Points for purchases at Amazon.com, such a trend is yet to become common in the Asia Pacific region.  

·          E-commerce players in India, including Amazon and Flipkart, are ready to unleash their mega shopping deals in mid-October. Consumers, too, are ready to capitalize on offers, mainly owing to the biggest festive season in India. JetPrivilege, with a base of 8.5 million members, is offering its members earning opportunities directly on their purchase at Amazon and Flipkart. The programme, which is managed by Jet Privilege Private Limited (JPPL), a joint venture between Jet Airways and Etihad Airways, has been looking at ways and means to delight it’s members across various customer touchpoints. JetPrivilege understands that when members are offered choice and flexibility in the way they earn and redeem their reward currency, their engagement with the programme increases, which in turn leads to them sharing more data about their choices with the programme.

·          GetGo, the lifestyle rewards program by Cebu Pacific, works with Lazada Group which operates Southeast Asia’s number one online shopping and selling platform. Users earn GetGo points when they shop with Lazada.

·          In case of Air China's Phoenix Miles, members can buy non-travel products from 300 partners. But this shopping is only restricted to the airline-owned site/ app. Members can't shop with their loyalty currency on other e-commerce platforms or offline outlets.

It’s about flexibility and convenience 

So all a Hilton member needs to do is link their Hilton Honors account to their Amazon.com account, and as announced last year, one could redeem their points every time they made a purchase at Amazon.com. One could use as many or as few points they wish to. In fact, as has become the case with loyalty shopping, one could also partially use points for part of their order and have the remaining balance charged to any other eligible payment method. All of this could done and accessed at the time of check-out.

Letting members redeem loyalty currency at Amazon or any other e-commerce app that is opened quite frequently is about the ease of shopping, flexibility and convenience.

“Our currency is limited in terms of how (members) can spend it (mainly around flights and ancillaries),” says Nik Laming, General Manager – Loyalty,  Cebu Air Pacific Air. As per the information available, GetGo is close to having a base of 4 million users, in a span of three and a half years. 

We are evaluating how far we intend to go down the road of becoming a digital currency (especially in the context of redemption options). We are undecided but we are likely to land somewhere in the middle. Or at least to start off so that we expand the redemption options, which might include to shop (with loyalty currency) at Lazada or other partners. We may not go the whole way of saying they (points) are equivalent of dollars and allowing it to be  spent anywhere,” indicated Laming, who was recently in Bangkok for Ai’ s #MegaAPAC conference.

Frequent vs. infrequent travellers 

There has been discussion around whether FFPs should become a two-sided marketplace. “The decision to participate on 3rd party sites depends on several factors, and one of them is related to the profile of travellers. If an airline believes that running a classic frequent flyer program that tends to rely mainly on frequent flyers and can be actively engaged via flying benefits, rewards etc., then they might not open up to be a completely digital currency,” mentioned a source. “On the other hand, a lifestyle rewards program is different from a frequent flyer programme. It could be after a traveller who only travels once or twice a week, for them to open up a range of earn and burn options is understandable. It is important for such progammes to understand who their members are, what motivates their purchases, how they eventually spend money etc.”    

“Our big focus is on the earn side. So we wanted to build the ecosystem of “earn” first. Because the average infrequent traveller we are trying to appeal still aspires to travel, so the reward they want is travel. Also, to make it appealing to a broader audience, we also need to look at other redemption options. Could be of a smaller ticket size – redeeming a burger at the airport to a hotel accommodation – still could revolve around the travel experience,” mentioned Laming.

Hear from senior industry executives about loyalty at the upcoming Mega Event Worldwide (Ancillary, Loyalty & Co-Brand Conferences) to be held in Long Beach, California (31st October – 2nd November, 2018).

Follow Ai on Twitter: @Ai_Connects_Us

 

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