IT Infrastructure Creates new Opportunities for Icelandair Saga Club
By Gudrun Osp Thorgnysdottir, IT Manager Icelandair Saga Club

Launched in September 1992 Icelandair Saga Club now operates as a profit center hosting a 75 % active membership base regularly redeeming points for flight and hotel awards.

In the beginning, Saga Club members where handpicked by sales agents, and no actual IT system was put in place until 1994 when an in-house solution was developed. However, the program began to suffer after the year 2000, as the initial IT infrastructure became outdated. It was then apparent to Saga Club’s management that a fully functional frequent flyer management system was needed in order to continue to deliver the program’s value proposition to our growing member base. Management therefore decided to acquire the Crane FFP System from Hitit and implemented it in December 2003. The Crane System completely changed Saga Club's back-office operations and member communications. During subsequent years the focus was on simplifying and automating processes with special emphasis on self-service through the program website.

Optimization and communication
Among the most successful projects during the Crane implementation was the full automation of the award booking process. The back-end process of issuing award tickets used to take a minimum of 15 minutes of manual labor. The automation process that we pursued under the Crane System reduced transaction times to just a few seconds, for the first time allowing us to offer award ticket campaigns through our website.

Improving our customer segmentation practice was another major success of our new IT system. We are now able to tailor e-mails and offers to specific customer profiles, offering relevant awards and gift certificates that can be used as a partial payment for revenue tickets and destination packages.

Driving flight revenue
In June 2007 Icelandair introduced a new pricing structure based on 5 fare families including: Special Offer, Best Price, Economy, Economy Flex and Saga Class - Saga Class (business class) gives 4 times the points verses Economy Class.

Ancillary revenue
We have positioned our loyalty development and experience to provide outsourcing services for a host of local Icelandic companies, including the National Bank of Iceland. We produce customized communications and award offerings for our outsourcing clients, along with providing IT solutions for their customers, such as point balance look-up and accrual/redemption management. Examples of these services can be found in home banking and kiosk platforms.

Icelandair Saga Club signed an agreement with Points.com in June 2007. This agreement makes it possible for our members to swap points to and from other loyalty programs to Saga Club or redeem their award points for hundreds of different gift certificates or magazines. With this agreement, it is also possible for Saga Club members to Buy extra points and Give and Share points between accounts.

Icelandair Saga Club is the only FFP program that allows members to share points without a points-fee (same fee for sharing 100 points and 10,000 points). Indeed the Share Program has been very successful for us. Saga Club and Points.com are now working on further developments, some of which will be launched in 2008.

Customer recognition and future plans
After introducing a new top tier in January 2008, the Saga Club now boasts 4 tiers: Saga Bonus, Saga Silver, Saga Gold and the top tier is Saga Crown. Saga Crown and Saga Gold offer spouse cards free of charge. Silver members can buy Spouse Cards for a reasonable fee. Currently the age limit to become a member is 18 years of age, but we plan to relax this requirement and allow children to become members.

Outside of Iceland, the majority of our active members reside in the United States and Northern Europe. Our members are very active and engaged thanks to a good IT system, an award winning website and a fruitful selection of third-party accrual and redemption choices. We firmly believe that we must always try to exceed our members expectations, and therefore we are lining up new services on our website in co-operation with our partners. Our members and partners welcome new products and the corresponding development is a never-ending task.

***

Editorial Headquarters
2, rue du Bac; F31700 Blagnac/France

EDITOR-IN-CHIEF
Ravindra Bhagwanani

ADVERTISING AND DISTRIBUTION
Christopher Staab

LETTERS
FFP Online Feedback