First published on 25th July, 2016
Ai Editorial: Be it for capturing of data or integrating various sources of data or getting closer to recognizing each individual, airlines acknowledge there are hurdles. Ai’s Ritesh Gupta looks at 5 issues
Airlines are battling on many fronts to sustain the bond with those who have chosen to be a part of their loyalty initiative.
The most fascinating bit is that the consumer is playing the commanding role in the equation. Airlines need to respond and anticipate, and then only they can expect a fruitful bond.
So what do airlines need to consider before they look at their loyalty programs in detail:
- Be on top of content consumption, devices etc: So if I use multiple devices or consume content, then as Google also says, airlines have to win such `micro-moments’. So airlines need to understand my behavior and link it with my preferences. And then how to count on programmatic buying, remarketing or web personalisation to target me with precise messaging or ads.
- Being a part of consumer’s spending: Airlines have to pave way for an aspirational desire among loyal travellers to reach the next spending threshold. So they need to find their way into the travel-related shopping plus other spending (be it for grocery, electronics etc.) and incorporate their loyalty programs into it. As consumers gain more value for their spend, they end up giving a lot more back to the FFP or loyalty program they are associated with.
- Making every interaction fruitful: Each and every part of the journey needs to be facilitated with a top-notch experience. For this all touchpoints need to be ready to serve the way consumer intends to be served. So, for example, can a loyal customer be inspired via a recommendation engine that creates contextual marketing offers? Is airline’s website counting on location, device, historic behavior and real-time information? Or if something goes awry at the airport, can a request made via Twitter be seamlessly attended at the departure gate by the airline? So an airline would need to streamline all offline and digital channels, and make the most of resources driven by technology and human inputs.
Being pragmatic with data-related set up
· Capturing of data: Airlines have rich data of their program members, as they capture members’ travels and even possibly credit card details and information from other program partners. “Proper analytics will allow these airlines to better engage with members, with relevant communication of offers, at the right time, via the right channel and so on. This is unfortunately lacking,” says a source based in Asia. There usually tend to be many databases within an organization. The task for CRM would be to consolidate all this data throughout the organization and use this to analyse, segment and connect with customers accordingly.
“The push must come from the top to consolidate and merge all data available within the organization, into a single data warehouse, for better engagement and eventually better customer experience. From experience, the biggest challenge would be to get the internal buy-in, from the various departments, on why a consolidated, single view of the customer would be better for the organization and in the long-term, reap the benefits of a highly engaged and loyal customer,” mentioned a senior loyalty executive.
Another area is linking loyalty data with other useful sources of consumer data.
Also, an executive told me it is still a major challenge especially as to whether we are capturing enough data. As much as we captured the flying data; but there are elements of daily purchases such as co-brand cards/financial partners/ petrol partners/ online retailers partners that we need to capture and able to monetize our members with value added rewards.
· Infrastructure for integration of consumer data: Data is resulting from business systems like CRM, tweets and other social media data etc. So the platform being used need to manage today’s analytic workloads. Other than managing this aspect, airlines are also looking at how to manage transition of their data warehouse to the cloud, to on premises, and back seamlessly.
As a specialist, HPE recommends a clustered method to storing big data, paving way for top quality query and analytic performance; Enhanced compression, needing less hardware and storage than comparable data analytics solutions; Scalability to step up when workloads go up; Built-in predictive analytics etc. Of course, the investment needs to be linked with return on investment or cutting down cost.
There is evidence that personalization is profitable because it drives conversion up, but there is also evidence that it only works when you get it right and only on a highly segmented audience. As a consequence, you have to be careful with the cost, both economic –high investment is needed- and also opportunity cost. Hopefully, personalization tools and CRM technologies will be inexpensive in the near future.
· Utility of dashboards: There is talk of sophisticated dashboards which monitor real time data. This allows loyalty programs to stay on top of trends in the transactional data so they can react more quickly to the economic environment and proactively make changes.
Specialists point out that with tracking of live customer interactions from a single dashboard can bring intuitive insights. The goal should be to look at behavioral data on top of transactional information.
But one needs to be cautious about the utility of such dashboards. “We have seen many loyalty solutions are enhancing their features and products by developing dashboards for analytics team to review and derive the next campaign mechanics for our members. However, not all have the dashboards that will meet your requirements; hence loyalty experts will look out for plug and play features to include non air platform data to compliment the overall FFP program data,” explained a source.
· Getting closer to recognising individuals: The industry at large is falling short when it comes to “personalisation to individual needs”. A marketer with a major airline acknowledged that airlines have so much data available to address individual needs, but yet they usually blast offers to all customers in newsletters, apps, social media etc. Marketers are hopeful that with progress in areas like social CRM, and advanced ways of customer recognition, geo-localization and real time communication will help in delivering contextualized and relevant product offerings.
Other than dealing with the issue of capturing the right data, airlines are also looking at how to combine such data with the astuteness of CRM. “This would in segmentation, and ensure we personalize the right offers to the right customers/ members based on the data points are ideal in our business,” shared the source.
As we learnt from Vueling recently, even though most airlines offer a great deal of ancillary products, even the ones that have been slow in introducing them. And more are to come, of course. What is not so common is to offer them in a personalized way. Selling ancillaries is about identifying a need in a particular moment. It would be interesting to see how quickly can airlines understand loyal members and also link their program to non-point-based rewards.
· Operational capabilities: An effective loyalty program calls for real-time, operational capabilities.
Specialists point out that data warehouse must be transactional and operational to enable sites, apps etc. while at the same time enabling analytics and storage of massive amount of data.
“We do aspire to have real-time credit of miles for our members,” shared a loyalty head from an airline based in Asia. “At the moment it is very challenging but in the future we are going to address exactly this point, which will help us to differentiate us from competitors and enrich our customers journey, which should result is loyalty beyond the classical FFPs.”
Gain an insight into latest trends at the upcoming Loyalty & Ancillary Revenue Conferences - 3rd Mega Event Asia-Pacific, scheduled to take place in Kuala Lumpur (23-24 August, 2016).
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