Ai Editorial: What is going to take web personalisation to the next level in 2018?

First Published on 18th December, 2017

Ai Editorial: Counting on computing power, algorithms, airline-specific IT offerings, front-end technology and customer profiling will lend a new dimension to personalisation, writes Ai’s Ritesh Gupta

 

Airlines are attempting ways to differentiate their offerings, and serve them to today’s always-connected travellers as per their preferences and the propensity to spend.

There are 5 factors that would contribute in taking web personalisation deeper from here on:

1.     Computing power: It includes both the personal device being used by travellers including mobile devices as well as the power underlying the server infrastructure readily available in the cloud, says Kenneth Purcell, CEO, iSeatz. These elements are become cheaper with the passage of time and the trend continues. The mobile phone is a highly personal device, and offers an opportunity to capitalise on certain innate features, such as location. So the blend of device plus user profiling can result in contextual recommendations. So information such as the time of the day, weather, location etc. can be used for personalisation. A mobile device has a massive computational power, plus it has camera, location-specific features.

As for moving infrastructure into the cloud, it is time to leverage today’s technology at a much lower cost, and avail the benefit of scaling it up. Airlines consider factors such as such as security (the role of technologies such as encryption and tokenisation comes into the picture) as well as connecting legacy applications to the cloud at enterprise scale. Travel searching is heavy, and organizations are moving swiftly in this direction. Among airlines, American Airlines has decided to migrate to cloud a quota of their crucial applications, including aa.com, mobile app and network of check-in kiosks. The plan is to enable developers to swiftly set up and modify application functionalities for American’s passengers. These customer-facing systems will be on cloud. The cloud business model that the airline has chosen is a hybrid one.

2.     Algorithms that run the sort order pertaining to the results that are being shown and how does that intersect with business rules, so that two of them in harmony as per the objective laid and outcome expected by an organisation are getting sophisticated in web personalisation. They can also be categorized – basic one such as showing what’s popular on the site to what’s new. Then there is collaborative filtering. Depending upon a user’s engagement with various products, say destinations chosen, bundles or ancillaries, they are clubbed into a group of users with similar likes and dislikes. Recommendations are crafted accordingly. Also, the sort of data that helps in personalising digital experience includes the source of traffic or acquisition data, anonymous visitor data, profile data as well as real-time interaction with the website. The process of serving anonymous passengers starts with some level of contextualisation – once a prospective traveller accesses a website or a mobile app, enters city-pair, dates, type of travel (family, with kids etc.), then algorithms can match them against pre-set customer segments and serve offers accordingly. At a deeper level, airlines can also focus on precise preferences, adding them for each user via deep behavioural tracking (a bunch of factors are considered - mouse movement, scrolling etc. + IP address, geo-location, device type etc. + other signals) to sharpen algorithms and make them even more relevant.   

 

3.     Sophistication of airline-specific engines: For any airline if their systems or engines get smarter over a period of time, then they are bound to come up with better recommendations or offers. And travel technology companies are looking at using data better, for instance, letting merchandising rules deliver better results. Similarly, the industry is looking at consistency in terms of what they have to offer, another engine - for shopping and pricing – would be the way to go forward, capitalising on all sorts of data – loyalty, merchandising, fare, schedule, availability etc.

4.     Front-end technology: it is making rapid advancement in the industry.  “This is significant in terms showing the different search results, how the entire page is rendered and paving way for segmentation all the way to user experience.  So looking at the APIs, all of this needs to support sorting of the inventory, that is being outsourced, is done in a way that it is relevant for the user and the front-end is a layer on top of it. This would include using 3rd party tools or working them in-house to set up front-end in a more personalised way,” says Purcell. 

E-commerce specialists point out that the efficacy of content management systems is coming to the fore when it comes to managing, personalizing, publishing, viewing and comparing different page versions. How to create create large web applications that use data which can change over time without the need to reload the full website? (Speed is an important element – a case study of how travel search engine Wego counted upon Google’s open source initiative called Accelerated Mobile Pages (AMP). In case of Wego, page-load speeds came down from more than 11 seconds to less than one second. AMP pages are stored in Google’s cache servers and load in milliseconds).  

5.     Preparing for customer profiling and 1to1 personalisation: “For 1to1 personalisation, factors such as “too hard to do it” or “too much storage is required” need to be done away with. The truth of the matter is there are lots of tools out there that make it easier to do it (whether its analytics provider tailoring the user experience on an individual basis or an organisation decides to develop the infrastructure in-house, open source frameworks pave way for the same, and even storage isn’t an issue today),” Gillian Morris, CEO, Hitlist told Ai in a recent interview.

It is imperative to bank on 1st party data. “(Data strategy) It’s not about how much data you have (and big data is inherently a vague term - how big is big?), but rather the quality of the data you’ re using. Travel companies that focus on loose intent signals from many different providers are acting on weak cues that might be misleading. The ideal situation would be to generate enough data within your own user ecosystem to truly understand where and why people are planning to travel. Google, Facebook, and theoretically Apple have the biggest leg up here,” asserted Morris.  

As for the journey of personalisation, as explained in this article, start with segmentation and make steady progress to rules-driven personalisation. This means setting up and further reworking on business rules that are utilised against clusters of visitors, based on information one can garner about users. The second major component is progressing toward algorithmic personalisation, where one initiates with a relatively broad set of recommendations to ones that are specifically meant for an individual.    

Interplay of all 5 aspects

Eventually, the interplay of all these 5 aspects – computing power, algorithms, personalisation and front-end technology come into play to deliver a relevant, contextual, personalised experience. For instance, the benefits of knowing a customer – not only steps up the conversion rate, but it also means less time spent on browsing, taking a decision faster on an airline’ site, and this would also cut down on the server cost.

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Ai Video: Is 1to1 personalisation possible?

First Published on 12th December, 2017

1to1 personalisation is the only way to know your customers best, and factors such as “too hard to do it” or “too much storage is required” need to be done away with.

“The truth of the matter is there are lots of tools out there that make it easier to do it (whether its analytics provider tailoring the user experience on an individual basis or an organisation decides to develop the infrastructure in-house, open source frameworks pave way for the same, and even storage isn’t an issue today),” says Gillian Morris, CEO, Hitlist.

“The ideal situation would be to generate enough data within your own user ecosystem to truly understand where and why people are planning to travel,” says Morris. “Once you have a user-specific data, you can understand the purchase journey and also what to recommend. Once you work on a profile of a user, you can understand travel habits and accordingly recommend something relevant, contextual,” she says. So rather than just spotting one destination that a user is looking for and coming up with generic offers for that destination, one can also understand what a user is looking for “something warm over the weekend in Miami”. Morris says, “People dont opt for a destination, they go on a trip. In addition to destination and price, equally important are timing (say weekend vs. weekdays) and social context (family, individual, colleagues etc.).”

Some of Morris’ recommendations are as follows:

1.     Assess what travellers are looking for

2.     Collect data, ask for it

3.     Offer value

4.     Leverage social connections

5.     Create accounts   

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Ai Video: Counting on FFPs as platform-based, digital business

First Published on 4th December, 2017

It is time airlines count on the prowess of frequent flyer programs (FFP) for being an asset-light, platform-based, digital business, asserts Evert de Boer, Partner at FFP Investment and Advisory. He points out that akin to the characteristics of digital disruptors, such as Uber and Airbnb, FFPs, too, don’t own the physical assets and are in a position to capitalize on data analytics and predictive modelling based on rich datasets that such programs have worked out.  “Typically operating in a digital environment, (FFPs) it is a very agile business (and in comparison far more agile than a typical airlines business),” he said.

FFPs are in a unique position, and as de Boer says, the “theoretical access” to data is unmatched in this case. FFPs have become network players (paved way for an ecosystem of miles earning opportunities across a significant share of everyday spent), he says, with a deep insight into the activity of their members, their buying choices, the likelihood of what they are going to buy etc. “But airlines haven’t fully explored the possibility as yet,” he said. “There is a need to connect all the dots and work out a strong profile of the customers.” The drivers of two businesses - airlines and FFPs – are quite different. “It does raise questions around how to govern and optimize this (FFP) business, even though there is talk around the same shared customer,” highlighted de Boer. 

 

(Evert de Boer, Partner at FFP Investment and Advisory spoke to Ai's Ritesh Gupta during the recently held MegaEvent in Palm Springs, California). 

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Ai Video: Taking off as a digital travel enterprise?

First Published on 11th October, 2017

How can airlines make the most of data and focus on retailing?

A section of the industry asserts that it is time for airlines to split digital commerce from operations. Of course, areas of concerns include business continuity or the current organizational structure as embracing change in this industry isn’t straightforward. But, if airlines hope to be in control, they need to find ways to identify passengers.

For instance, the game isn’t about identifying and members of a loyalty program. Rather the focus has shifted towards infrequent travellers or even anonymous travellers. Personalisation and contextualisation are increasingly becoming a norm as airlines strive to become digital enterprises. As Binay Warrier, Head of Business Development, Loyalty & CRM, IBS Software Services says, it is time for airlines to take risk.  

 

Hear from experts about how airlines are gearing up for optimizing of data and retailing  at the upcoming 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).

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Ai Video: How data is shaping loyalty 2.0?

First Published on 10th October, 2017

Are members of a loyalty program associated with a low-cost carrier also relatively low spenders? How to engage infrequent flyers and make the most of their everyday spending?

Finding answers to such questions and in fact, even overcoming traditional ways of engaging and operating loyalty programs, isn’t an erroneous belief. Hong Kong Express Airways’ reward-U program is one such example. From no member, no 1st party data to 1 million members in 16 months to gearing up for loyalty 2.0, the journey has been quite an eventful one for this loyalty program.

“Starting a loyalty program is always difficult considering that there is no data. But we are 16 months old now, we have been accumulating data, spending patterns etc. We are getting a picture of what people are doing. The association with a low-cost airline doesn’t mean that our members are low spenders. They are high spenders,” says Hong Kong-based CEO Steven Greenway. He spoke to Ai’s Ritesh Gupta about loyalty 2.0.

 

Hear from experts about the futurel of loyalty at the upcoming 8th Mega Event Worldwide, to be held in Palm Springs, CA, USA (29 November – 1 December, 2017).

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Ai Editorial: Can airlines be an ally as a loyalty program operator?

First Published on 24th May, 2017

Ai Editorial: Airlines can improve on 5 counts when it comes to making their loyalty currency more valuable, writes Ai’s Ritesh Gupta

 

Are airline loyalty programs “trustworthy”? Are airlines content with lesser active program members? Do airlines only allocate the “lowest awards to seats they feel would otherwise go unsold”?

Such questions gain credence going by the criticism of FFPs when one tries to assess the trust quotient. According to a study by Brandigo, around 60% of travellers do not feel loyal to any particular airline. The figure shows only marginal increment in loyalty among passengers who fly more than 7 times per year.

If one tries to assess the level of trust via Google (search for “trust in airlines’ frequent flyer programs”), as per the first few links on Google, even without clicking on them, it is apparent that as an industry, airlines aren’t being trusted. A headline reads: Are airline frequent flier miles programs just rip-offs? Another link (from a piece posted by BoardingArea regarding Wyndham Rewards cancelling a promotion) explained the meaning of “trust”.

Airlines acknowledge the problem

“The legacy of being rewarded for distance travelled has set an expectation amongst customers which is difficult to reset,” an airline executive from Asia told me.

Of course, certain markets witness more criticism of the way FFPs function. For instance, certain standalone loyalty programs in the U.S. may be touching a saturation point and the viability of accruing points/ miles in one currency with a particular airline is being questioned. Also, loyalty programs have been gradually evolving – take the case of transitioning to revenue-based model.

“High yield customers will praise you for rewarding them equitably, whereas low yield customers will feel deprived – sometimes through no fault of their own, but rather due to competitive pricing amongst airlines on selected long haul routes. “Taking away” from loyal customers, even if relatively minor, can ignite a firestorm of opinions on social media platforms,” this is what a senior airline executive acknowledged as the airline chose to shift to a revenue-based FFP.

Time to take action

So airlines need to take initiatives on several counts in order to come across as an ally, adviser keen on letting travellers make the most of what they have accrued. As per one of the studies last year, Collinson found that over 50% of survey participants didn’t expect that they would “ever be able to earn enough points to redeem anything of value”. According to 500friends, airlines need to identify gaps that exist in rewards structure. Some of the areas that can be improved upon:

1.     Offering a reward flight for non-travel purchases: Airlines are targeting infrequent passengers, and even introducing coalition loyalty programs. One way that is being attempted is everyday purchases points earning. So even as the lure of a free flight remains intact, the airline ends up remaining in touch, offers more ways to use or redeem a loyalty program’s currency. How do both passengers and airlines benefit? The major appeal of a coalition model is – the overall share of wallet. A person will spend a small proportion of their disposable income on air travel in a year. Adding credit card, supermarket, department store, petrol and other retailers expands the share of disposable income going through the program.  With higher total spend within the program ecosystem more points are earned and so even the most infrequent traveller can attain those reward flights. Of course, the concept for rewards for everyday purchases isn’t for all. Some programs are devised for only frequent fliers. In this model there is less need for more partners as the vast majority of points will come from flying.

2.     Making calculation simple and facilitating rewards: Can airlines understand the spending pattern and simplify calculation for a loyalty program member? If a start-up or a 3rd party FFP review site can explain airlines have a wide range of values even within one redemption category like flights, then why airlines can't do the same? Start-ups today are analyzing credit card spending pattern, sharing details of missed rewards and even offering personalised average reward value based on the rewards preferred by a spender! So, for example, if a user is part of an airline co-brand initiative and tends to use this card on certain categories and is eyeing a free flight, how can airlines assess the spending and come up with an apt recommendation? Can airlines highlight how values earned are calculated for each transaction and the value for what was missed by the member? As Connexions Loyalty recommends, airlines can experiment with varied offerings within various customer segments in order to comprehend who “values your brand, increase redemptions and reward your lost loyal customers”.

3.     Avoid silo approach in a coalition loyalty program: Airlines, as program operators, need to consider the real-time quotient in passenger experience, and for this, all partners needs to deftly manage accrual and redemption of points/ miles in real-time (focus on their value, location, yield etc.) “(As an airline) Try to understand your partner’s (core offering and capabilities) and enable them to build their own loyalty accrual within your loyalty program, using your currency, says Piotr Kozlowski, VP Consulting, Services Sector, Airline/ Travel Loyalty at Comarch. He also asserted that every aspect of the program needs to be relevant, contextual – for instance, targeted promotions from a relevant partner, efficient use of APIs for quick integration to various systems, such as enrolment API, point – status check API etc.

4.     Counting on mobile’s prowess: FFPs or loyalty initiatives should be crafted considering the prowess of mobile devices, and not merely be adapted for the same. For instance, how can loyalty program capitalize on mobile for real-time offers, personalised messaging etc.? How to make the most of Apple Pay and Android Pay, and interweave loyalty-related moves with them – say, the ability to earn and redeem rewards, and pay with a single tap? Can the currency of a loyalty program be used to pay for a transaction via a mobile wallet?

5.     Overcoming loss of interest: Acknowledging that distant rewards can be discouraging and alienating to the program members, Comarch chose to combat such negativity and eventual loss of interest in the program. The company came up with their “Point Loans” option earlier this year, offering members a chance to avail a reward earlier than expected by “loaning them the fixed amount of points that are necessary to complete a specific redemption”. Comarch explained that this service can be “connected with a special fee that can be compensated in a form of money or points and needs to be repaid by the restricted deadline, otherwise either the member’s card will be charged or their account will be blocked”.

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Ai Video: Binding partners via data in coalition loyalty

First Published on 14th April, 2017

Buying a book, paying for utility bills or car fuel etc via an airline loyalty card and getting rewarded isn’t new for customers. But partners in such coalition loyalty program need to move away from operating with the “silo” approach to making the most of emanating data in a collaborative and cohesive manner.

Airlines, as program operators, need to consider the real-time quotient in passenger experience, and for this, all partners needs to deftly manage accrual and redemption of points/ miles in real-time (focus on their value, location, yield etc.) “(As an airline) Try to understand your partner’s (core offering and capabilities) and enable them to build their own loyalty accrual within your loyalty program, using your currency, says Piotr Kozlowski, VP Consulting, Services Sector, Airline/ Travel Loyalty at Comarch.

Every aspect of the program needs to be relevant, contextual – for instance,  targeted promotions from a relevant partner, efficient use of APIs for quick integration to various systems, such as enrolment API, point – status check API etc. “Data is a key enabler in taking the program forward,” agreed Kozlowski. A key aspect of data relates to crafting the profile of the customer, incorporating information about key traits like their shopping preferences. Be it for pushing the right ancillary product to a traveller or getting stock keeping unit data from the partner in the program, the benefits are immense and enables to build analytics, reports etc.  This all can pave way for being a part of travellers’ lifestyle.

“If you look at the travel-related coalition loyalty program, they are encompassing certain lifestyle (elements). By nature, travel brands tend to be premium brands. It is, of course, a kind of magic to match the high-street brands or online brands with the brand positioning of the program operator. The customer definitely wants to consolidate their commercial activity, especially pertaining to brands that inspire (or they aspire to have with them). Travel brands with premium or less premium brands on high-street is something that can drive the program forward (based on monetary-driven accrual levels).   

 

Gain an insight into the latest trends at the 3rd Co-Brand Conference, to be held in Atlanta, US (22-24 May, 2017) 

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Ai Editorial: Managing a loyalty program calls for unremitting finesse

First Published on 28th February, 2017

Ai Editorial: If driving loyalty is about crafting experiential moments, then airlines need to dwell upon apt blend of content, design/ functionality of the interface, timing and technology right from data collection to acting on it, writes Ai’s Ritesh Gupta

 

Managing a loyalty program, right from enrolment to sustaining a bond, calls for unremitting finesse.

The circumstance or the outcome from a member’s perspective needs to offer some value – for instance, if you are collecting data for an unfinished profile, how about letting one indulge via apt mix of luring video, interface/ user experience that makes them participate, context that makes them feel “at-home”…so right from collecting data to analyzing it to coming up with a smart, targeted communication, what can sustain the efficacy of CRM is evolving.

So what can make the journey, including data collection, an experiential one for members?

Airlines need to look at how an interface, a piece of content or persona-based loyalty messaging can deliver.

Incomplete profiles can halt progress. So clearly airlines need to maximize 1st party data collection. Considering that airlines need to gain intelligence from both homogenous and heterogeneous data sources, the significance of 1st party data acquisition can’t be undermined.

In a recent webinar, Geoffrey Smalling, CTO, 500friends, a Merkle Company, mentioned that data needs to be collected “accurately, cleanly and at the right time”. He underlined the significance of garnering data from various sources – sales data, online, offline, CRM and social. “Collect as much data as you can – cheapest, since one doesn’t need to pay for it,” said Smalling. Airlines need to work on an enhanced customer view by linking multiple data capture methods. Identify high-value customers through attributes such as product purchases, preferences and demographics.  

Being creative, tech savvy 

Data collection can’t be mundane. The content, design/ functionality of the interface, timing, technology…can all of this captivate a user to take action? If we just talk of today’s smart devices, then one has to think of “glanceable” experiences, conversational interface, context of use etc. And how all of this can be used to improve profile of the member. So if a customer has enrolled, but not completed their details, how about looking at ways to reinforce  the perks throughout a traveller’s first few experiences. If a customer has enrolled outside the shopping cart funnel, incentivise them for completing the profile. For example, invite them to do a secondary action. Using APIs and data tools to present a questionnaire that’s not checkbox and typical Q&A, and find compelling ways to collect more data.

Smalling recommends that organizations can focus on channels easily accessible to members. This can pave way for pushing offers and act on persona-based messaging. This way one can connect at different times, and with limited friction for the member. Other than delivering real-time offers, this channel can be used for garnering engagement information on members. Retailers, airlines can make the most of queues, putting a spin around a mundane routine of shoppers/ passengers. A simple message to the shortcode, and chatbot comes into action. It could be about new enrolment or engaging a loyalty program member into an activity. “There are tools available for chatbots – not only work around the SMS channel, but also Facebook messenger, WeChat etc. This is a very low friction interaction, and apt way to drive the known customer rate as well as satisfaction,” shared Smalling, who highlighted that built-in artificial intelligence can understand data, parse user inputs etc. “It is about spending more personal time with them. It is about having a highly focused interaction.” Smalling also referred to the potential of mobile wallets – activating via email featuring a link or text message with a click button – as another option for low friction interaction. This platform can be used for personalisation – status update, a specific reward etc.

Airlines can also look at social activity, and work on profiles of socially connected loyalty members. For airlines, the opportunity here is to count on an environment that isn’t a brand’s store, digital property or a hotel’s lobby.  In order to make participants feel valued, companies can scrutinize social media posts using pre-defined criteria, and accordingly reward an individual. One can assess a person’s past interaction (for instance, activity on Twitter say hashtags, sharing of photo, joining of Instagram etc.), and accordingly work out customized message or even (via integration with CRM/ loyalty database) pave way for points or engagement rewards depending upon the status/ tier today. A brand of Marriott’s stature is looking at combination of “automation, moderation, and surprise and delight” when it comes to social content.

From avoiding to participating

With robust data collection and analysis, one can focus on persona-based loyalty messaging (with details such as income, average order size, lifetime value, motivation - what triggers loyalty, drives choice etc.). “One can target a profile differently. This would mean highly-targeted, persona-driven loyalty,” said Smalling. Organizations need to be capable of managing robust data sets and knowing how to effectively segment and personalize for customers, work on actionable customer segments based on both transactional and behavioral attributes and events, personalise communications and experiences across channels to drive improved in-program participation and engagement.

With highly-targeted, persona-driven loyalty, one can move on from being ignored or being marked as spam to being receptive to messages and notifications.

Airlines need to excel on one or many counts - being an ally, being part of the lifestyle of travellers, holding high aspirational value, offering opportunities to a loyal passenger to maximize their loyalty rewards…and in order to accomplish this, one has to get closer to making every experience an experiential moment.

 

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Ai Editorial: Loyalty via digitization – enterprise-level readiness is must

First Published on 15th February, 2017

Ai Editorial: Airlines have shown that genesis of digitization lies in digital transformation. This can boost loyalty-related initiatives in a big way, provided airlines exhibit enterprise-level readiness, Ai’s Ritesh Gupta

 

When any airline prepares for digitization, the ambit of knowing the customer is going beyond interactions that take place with an environment owned by the airline.

It isn’t easy for sure, but yes, it is being asserted that if airlines (or any business) intend to foster loyalty or sustain it, then customer experience isn’t just about interactions with a brand.

If we talk of airlines, it is heartening to know the kind of effort that is being made - Allegiant Air pursuing ways to engage loyalty program members during the non-travel phase or Malaysia Airlines attempting to keep track of daily purchases by coordinating with online retail partners, via co-brand cards etc. Airlines have shown that genesis of digitization lies in digital transformation, as depicted by flydubai. The carrier has chosen not only relook at their IT architecture, but also refining their API connectivity to offer a connected, seamless experience.

And of course all of this needs to be taken further with enterprise-level readiness.

Then only any initiative, be it for one related to data, analytics and content management, can have direct impact on loyalty.

Here we assess some of the initiatives:

·          Data collection and integration: If digitization is about knowing and serving customers, then the initiative wouldn’t yield results if one can’t garner data from all disparate sources. There is a need to look at all acquired data in one place. Specialists recommend an audit of data sets, finalizing of a data model, evaluating mapping of data, and if all of this is consolidated via one dashboard, then it can lay strong foundation. How can one reap benefits? For instance, rather than ending up with “messaging overkill”, an airline can tailor messages as the booking funnel or preferred channel. Also, if we talk of artificial intelligence, bringing data together and integrating it is must. A central hub for data makes AI run efficiently - personalize, automate decisions, and analyze customer behavior. Just as AI is propelling the functioning of autonomous cars, robots and smart appliances, it can enable airlines to work on intelligent conversations across all of their devices.

·          Gearing up for new experiences: Any new customer-facing execution should run through relevant teams, and has to be purpose-built for enterprise requirements. Take the case of chatbots. They are omni-channel – can be set up where passengers already are (Facebook Messenger, mobile app etc.). Right from automatically recording and categorizing message successes and failures to ensuring how messages between users, bots and all enterprise systems are secured and exchanged in real-time to assessing the accuracy of conversation, every minute detail needs to be understood in a swift manner. This level of enterprise-level readiness is must for every interaction, every experience – relatively old or new.

(On another note, airlines can also look at applications of such initiatives to improve their operations. For instance, the prowess of business intelligence can strengthened further by adding alerts and report delivery via a bot. A notification for a decision-maker via a bot, without the need to log into the BI system, can be quite useful).

·          Assess sensitivity of any new initiative: The idea of turning any consumer gadget, accessory or wearable into a payment device is luring. Turning any Internet connection into a commerce experience is exciting, but don’t forget that security of smart devices is still being questioned. Data breaches remain a big threat, and if IoT devices aren’t safe enough, then fraudsters will have avenues to potentially go after credit card numbers, login credentials, and personal details.

·          Build on efficacy of a proven channel/ touchpoint: Email id has proven to be a unique identifier, and travel marketers are looking at emails featuring item-level ecommerce receipt data. From online and offline receipts to travel itineraries and brand preferences, the inbox is becoming a go-to source for business intelligence Armed with rich, detailed data, airlines can attempt to understand where consumers are transacting, when they are buying, what they are buying, and how much they are paying. 

·          Learn from what doesn’t work: The value of non-converting data can’t be undermined. Say a user visited a website, and left the site at some point. This user is being followed with retargeted ads, but didn’t convert despite showing early promise. Was there is anything wrong, say any unmet need, during the course of the booking flow or user experience on the website? Was the creative of retargeting enticing enough to get the user back on track? Non-converting data can help in areas like waste ad spend, frequency capping etc. for a marketer. Also, assess areas that the ad tech industry hasn’t found a solution for. For instance, overcoming limitations of dark social traffic channels. Dark social is when people share content through private channels such as instant messaging programs, messaging apps, and email.

·          Delivery of content: Content management, be it for going for an architecture that supports delivery of content for emerging technologies and all devices, adopting personalization rules that tailor a site content based on visitors’ profiles, or monitoring how content is performing, without navigating to a separate web analytics system, is one key area that is demanding action in a swift manner.

 

Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this year. 

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

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Ai Editorial: Changing FFPs is fine, but “elite loyalists” deserve a fair treatment

First published on 3rd February, 2017  

Ai Editorial: When Amtrak last chose to re-launch their rewards program, the team decided to take care of their elite customers. There is plenty to learn from this approach, writes Ai’s Ritesh Gupta

 

The sheer delight of being “valued”, taking family for special trips or the convenience quotient associated with travel are facets that loyal members, especially those belonging to the elite category, associated with travel loyalty programs.

But changes in loyalty programs of established travel organizations in the last year or so, as witnessed in case of Starwood and American following Delta, United etc., have resulted in bad experiences as well as PR.

There are elite “loyalists” with more than a couple of decades of association who have expressed shock, and are peeved with changes, for instance, raising of reward point requirements in case of Starwood. Come to think of airlines’ stickers and tags all over on your luggage, and suddenly you are left with only fond memories of all the perks you enjoyed, sad, isn’t it?

There are few areas that can be looked upon - what could be done to avoid or salvage the precarious situation:

·          Why not leave “elite” members if everything is working well: Vicky Radke, Senior Director, Amtrak Guest Rewards at Amtrak, shared that when the organization last chose to re-launch their rewards program, the team relied on customer insights and “came up with measures regarding on how to base our success”.

Amtrack decided to focus on increment in enrolment, in engagement and making redemption simpler.

At the same time the team felt the need to take care of their elite customers – they know how your program works, what they want etc. So the team didn’t change elite benefits. “We made sure those customers still felt valued. Changes were made to simplify and streamline the program.” The team relied on both quantitative as well as qualitative research for the changes in the program. “Customers indicated that there was lack of understanding about how the program was working, and how they would get enough points to redeem. We used this focus group insight as well as member satisfaction scores to understand the opportunities we had to improve the program, and make the changes that would drive additional engagement,” shared Vicky.

The key KPIs included over 15% in engagement, 25% in enrolment and also increase in redemption.

·          Feel the “sentiments” of a loyalist: One elite business traveller can’t digest the fact that Starwood made changes, and felt “betrayed”. For business travellers, FFP perks tend to be the number two reason just behind schedule that determine which airline the customer chooses (assuming they are not handcuffed by a corporate travel policy).  Besides carrying around their elite status as a badge of honor, customers cherish the perks provided in order to alleviate the stress of business travel and they overall create a much more comfortable travel experience.  At the airport, preferred check-in, expedited security, priority boarding all aim to make travelling more efficient. On board, upgrades to first class and/ or priority seating improve the comfort of the flight and provide more room to work or to relax. Additionally, when things do go wrong, elite customers know they are going to be given priority for customer service and rebooking. When all of this goes away, then it will result in acrimony.

·          Do communicate about the change and the future: I came across a post on LinkedIn that referred to Starwood making changes to their rewards program, but this elite member wasn’t informed in advance and got to know only after implementation happened. This member searched on Google but found no official announcement on the corporate site also. And then he goes on to add that the Marriott-Starwood strategic alliance only added to the woes, as perception around Marriott and their “limited room availability for reward stays” for business travellers wasn’t an exciting development either.

As we explained in one of our articles, the old systems of airlines in the U. S. awarded both more award miles (used for free flights) and more status-earning miles to those who flew in premium cabins compared to those on cheap tickets. The problem with the old systems was that the “spread” or “differential” between cheap-fare earning and high-fare earning was minimal. In many cases as low as 1.5. That meant you really didn’t “much more” for spending more. So – to move to a more “revenue-based” earning system – the imperative was to increase the “spread” or “differential” to better reward high-fare customers relative to low-fare customers. This needs to be explained.

Airlines also need to ease off the transition for erstwhile “high-value” travellers, especially not pushing them to do what all otherwise was part of the services for “elite”. For instance, don’t make your customers bounce from department to department in order to voice their dissatisfaction. Explain them the change when they get in touch.

·          Looking beyond “gaming” and looking at the profile of a traveller: Can airlines look at the way their “elite” customers reach the status and cut down on the possibility of grievances? For instance, a business traveller who ends up travelling from the U. S. to Asia several times a year and manages to achieve the elite status provided he or she is buying full fare or business fare tickets. This is fine. But there could be a traveller in the U. S. who travels domestically every week 1K miles each way, and takes off 4 weeks for vacation and holidays, and is now because of change coming short of the threshold necessary for elite status. So in this case can a certain mileage-run or sheer volume of transactions be considered, finding a way to differentiate between the genuine traveller and one who is finding a nefarious way to reach the status. Can aggregated behavioral spending data help in this case?

FFPs should not react by copying a revenue-based accrual / earning structure of another FFP. Did United and American simply copy Delta’s program? FFPs must fully comprehend their own business model in respect of their revenue and cost structures, as evolving to a fully fledge revenue-based model (accrual and redemption) requires monetizing the value of a mile/ point – a critical success factor to maintain commercial sustainability of the FFP, which by default will impact all rates negotiated with long-standing accrual and redemption programme partners as a result of a previous calculated cost of a mile/ point.

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