Ai Editorial: Do you know what your FFP member is looking for?

The onus is on airlines to make the most of customer data and information they have, and integrate it with every aspect of their FFPs. We find out more in our chat with Deborah Merrens, head of marketing, Global Blue

From A Traveller’s Lens

A disjointed experience or even letting loyal customers question the prowess of airlines in recognizing them are some of the bigger issues that FFPs are facing today. The game has moved on from just worrying about redemption or chasing a particular status.

Loyalty programs need to come across as our able ally. Just the way we expect simplification and automation in the most of tasks we are doing today, one would expect airlines to churn out “surprise and delight” experiences driven by their data infrastructure. So say as you access your next flight schedule on your preferred mobile app, a link pops up that ends up offering you a deal for a hotel room that you had searched for 24 hours ago! Yes, today’s travellers love surprises, don’t like to go through mundane routine associated with a trip etc.  

Airlines need to spot ways how to do so and if it can be monetized then it can lend a new dimension to the concept of loyalty.

Here we hear from Merrens about how according to her loyalty is evolving. Excerpts:

Ai: If you were to assess loyalty as air passenger, what makes you happy?  

Increasingly it’s about personalising the experience for me rather than collecting more miles or chasing status. (So be it for) making it easy to check in, get the seat I want, board when I want, or get the baggage allowance I want/ need - take the stress and hassle and I’ll be happy.

Ai: So how is it shaping up?

This is probably already happening in premium cabins, but the traveller expects the same when he is down at the back. This suggests - custom benefits, custom propositions and custom interpretation of the rules are going to be important and true drivers of loyalty.

Ai: Can you share your loyalty/ reward program disappointments? What’s your biggest pain-point till date?

There are two areas of disappointment:

  • The first one is when the programmes does not deliver on its promise, that’s usually around a benefit delivery/ failure. And it is usually in mileage redemption.
  • When things go wrong the airline / programme not helping you with your problems and staff not appearing to be empowered.

Ai: What would you count on as the biggest development as well as the challenge in loyalty today?

The first one would be the shift from miles to revenue / quasi-revenue based – and it’s going to shake the whole industry and potentially cast a lot of “Y” travellers down to the purely price based world.

Also, it need to be noticed that ancillary benefits / sales are overlapping with loyalty benefits and the airline trying to sell you something you previously ‘earned’ for free, potentially negates long term loyalty in favour of short term benefit / service bidding. he net result of this is that the “Economy” space ends up looking like a low cost carrier.

Ai: How is data helping in understanding the motivations travellers may have to enrol in a loyalty program?

At the moment not many people are doing this well - usually using data for offer targeting and little predictive or real time use of data. Where this needs to go is to move to custom pricing where you will get flight and benefit package pricing based on an intimate understanding of your behaviour, needs and capacity to buy. This sort of custom proposition could be the new loyalty. No one is really there yet.

In addition to pricing, custom benefit serving and delivery would be something that they can do for the member to keep them happy.

Where the smart data and ancillary sales do come together is where the FFP becomes a big affiliate platform making targeted sales offers (and a margin) from a myriad of different journey vendors (cars, parking, stores, duty free etc.) eager to sell the traveller something. In this context, trust, respect for privacy and preference are critical. If the FFP is going to offer you less but sell to you more, you had better have a pretty strong relationship to stop people heading for the door.    

Ai: What role do you think data analytics is playing in the arena of loyalty – for instance in improving upon merchandising redemption and the overall experience of flyers?

Most programs are talking the talk on analytics but not delivering. On the non-air redemption side the big question is can the advanced analytics become like Amazon for targeting content and offers.

Ai: What should be the major priority of airlines today especially when airlines are not only expected to recognise a loyal flyer, but achieve top-notch personalization? So it would be offering what a loyal customer is looking for during his or her journey.

  • Recognize and rewards revenue value
  • Demonstrate to members that you genuinely care about them (not easy for the ops driven airline culture)
  • Offer greater customization of benefits and rewards

Ai: What do you make of mistakes that airlines can commit when it comes to redeeming miles for merchandise? For instance, critics often talk about relatively lower cents per mile for non-travel products offered?

It’s not lower really, it’s just that flights were always priced too cheaply, so that the insiders who could play the system got all the seats, but everyone else got a raw deal. The internally charged cost of flights needs to rise to reflect a more commercial value. This may feel like a bad deal for members and it might even spell the end of some weak FFPs. The smart ones will find more ways to put more miles in peoples accounts and increase the overall value of the member. With higher value members delivering more revenue, the FFP can find a way to subsidize that seat. Eventually it goes the way of Amex.

Deborah Merrens, head of marketing, Global Blue, spoke at the FFP Loyalty Conference, a part of the 2nd Annual Mega Event Asia-Pacific in Singpoare on the 1st and 2nd of September. Similar issues will be covered at the global Mega Event in San Diego this 4th and 5th of November.

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