First published on 25th January, 2017
Ai Editorial: Loyalty isn’t just restricted to how a member interacted with one particular brand. Airlines are duly looking at areas like shopping, eating out etc. to target the infrequent traveller, says Ai’s Ritesh Gupta
A transaction or an experience isn’t defined only by how a traveller interacts with a travel brand.
In this context the worth of a co-branded card or a coalition program is on the rise, and airlines’ are trying to dig deep to ascertain what a loyal member looks like beyond their own purchasing funnel. Data and emanating insights is what one is after. In the whole exercise what works in airline’s favour is the lure of flights as a freebie or the overall perceived value.
So today airlines aren’t just looking at the usual sources of data (behavorial, transaction, device etc.), for instance, going beyond attribution models that only contribute in understanding a particular booking funnel.
The plan is to identify ways to be more relevant by acting on data, not just when the probability of a conversion is there. Even in cases when customers aren’t regular buyers of an airline’s core products, airlines are finding ways to be a part of their lives. So be it for inspiring them to take their next vacation or evaluating their transactions, the ploy is to understand travellers when they are in the non-travel phase.
There are few areas that airlines are working on in order to target the wallet of the infrequent or leisure traveller:
· Elevating the brand with every transaction: The concept of a co-branded credit card isn’t new. But what’s novel is the way data is being collected, shared and acted upon. Yes, the role of partners is vital in a coalition program, but it is clear that air travel is among the most attractive rewards. Take the case of Allegiant Air. A major reason behind the US-based airline’s first-ever co-branded credit card, The Allegiant World Mastercard, introduced in conjunction with Bank of America few months ago, was to assert the brand’s presence in the lifestyle of the same set of travellers who fly with the airline once-a-year. “The play for Allegiant in the future is that we have the most powerful redemption opportunity – easy, affordable access to exciting destinations, very “aspirational” the kind of place travellers think of day-dreaming,” says Brian Davis, VP Marketing and Sales, Allegiant. The plan is to interweave this with the day-to-day lifestyle of travellers – gas stations, grocery stores etc., making Allegiant brand part of those transactions. “So as customers go about mundane transactions, they day-dream about their next travel and destination,” said Davis. As for the travel and benefits, some of them include priority boarding, free in-flight beverage when the cardholder shows their card, Buy one, get one free airfare when the card is used to purchase an Allegiant vacation package with 4 or more hotel nights or 7 or more rental car days etc.
· Engaging during the non-travel phase: David referred to the low frequency model and the significance of the seasonality factor for the leisure traveller. “Most loyalty programs are crafted around high frequency travellers, business travellers, and these aren’t usually on our airplanes. It’s more of once-a-year vacation family travel. The program is relatively new, set up right from the scratch, so it will result in more and more insights into their lives,” he says. As Davis says, the focus is now to be a part of their lives once the actual travel phase is over. The lead customer – around 80% of the total buyers – is typically the housewife, who is in late 40’s, has two kids, and she is in charge of the family vacation. While there has been scrutiny of the decision to charge $59 annual fee, it is clear that Allegiant is banking on the initiative for evaluating everyday purchases. Davis explained that the airline’s relationship with their customers tend to be once-a-year when the traveller takes the vacation, and then they go back home, living their respective lives, the other 51 weeks of the year. Insights about those 51 weeks – who they are, what motivates their purchases, how they eventually spend money etc. becomes very important.
· Insights from data and acting on it: A coalition program can result in tangible benefits - expand member base, decrease marketing cost, cross-market to each other’s members, what products to push etc. Overall all can get better at doing analytics, as there is an efficient dataset. So rather than only relying on model section, the quality of data and size of data comes into play as well. One can also look at the merchant-fit in terms of what is that your members are likely to respond to. So choose a loyalty program partner as per the behavior of the member. For instance, the data analyzed over a period of time indicates that a particular member whenever travels with a family doesn’t hire a car, and rather prefers public transportation. Why not to offer a relevant ground transportation deal for the entire trip, say when a traveller is going to Switzerland, then why not offer a discounted pass for the duration of the stay? So do plan to influence the customer touchpoint, and be meaningful to them by indicating you know them, by making an effort to surprise them, delight them with a utility-oriented relevant, attractive (discounted or contextual or any other value etc.) offering.
Davis also acknowledge the utility of such data as the airline is now evaluating the non-travel phase behavior – what kind of stores they shop at, what kind of restaurant do they eat at etc. “It would be about building offerings around our customers. Data has played a big part in where we are today (with our loyalty program), but we have just started out this initiative,” he said.
It is of course very challenging to merge all data points, apply the right algorithms and have the right text and visual components come together to create a seamless flow of information to members.
· Product and customer experience: “This foray into the loyalty space is all about understanding the customer first, and building the right product for them. The team at Allegiant counted on data to understand passenger profile, travel pattern, and how Allegiant is different as a carrier from others in this context,” shared Davis. Mechandising is a journey, and so is crunching the data, so how is the airline looking at taking customer loyalty to the next level? “It (co-branded credit card and data from the initiative) allows to shape up our business – what other ancillary products we need to bring on, and how should our partner mix needs to look like, as we build the business around the customer,” added Davis.
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