Executive Interview: Nik Laming, Cebu Pacific Air

Our chat with Nik Laming, General Manager – Loyalty Division at Philippines’ leading carrier Cebu Pacific Air, who spoke at the FFP Loyalty Conference, a part of 2nd Annual Mega Event Asia-Pacific (held in Singapore, 31st Aug 2015 – 2nd September 2015).

From a Traveller's Lens

From A Traveller’s Lens

Airlines today are not only expected to recognize a loyal flyer, but achieve top-notch personalization, too.

If one has to deliver a consistent and yet tailored experience to members then it is imperative to clearly define processes and execute flawlessly, asserts Laming. Laming says there are many moving parts in the airline business and the loyalty program is a tool that helps to identify customers and customise offerings to their needs but only if the organisation can operationalize the good intentions.

For its part, Cebu Pacific launched its GetGo lifestyle rewards program for frequent fliers (over 1.4m) in March this year. It allows members to accumulate points on everyday spending (on groceries, utilities, gasoline, etc.) and redeem those points for a free flight. Laming spoke in detail about what needs to be done to ensure a loyal passenger gets his or her due in an interview with Ai Correspondent Ritesh Gupta.

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

As a loyalty member I am happy when the core benefits are done well – don’t give me non-air rewards and frilly extra’s to paper over the cracks of a fundamentally flawed program.  Make sure I can get redemption flights when I want them albeit at variable rates.  Tier qualification is poorly done sometimes – for example only business or first contributing to top status is too restrictive and just isn’t viable in this day and age.

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

(It would be) The member revolution powered by smartphones and social media. People are more connected, more vocal and more demanding than ever before.  A small issue coupled with a canny member can result in wide spread social media unrest if not managed carefully.  And the speed of change and reduction in reaction times required to manage this new world are a big challenge.

Ai: The onus is on marketers to serve the customers in the best possible manner by being data-driven. What does it means to you, and how actually do you think one can excel in an omni-channel environment?

Getting the basics right is vital.  There is effectively an agreement between the program and a member whereby data is exchanged for rewards.  Using the data with respect and to improve customer experience is the key.  We currently operate across multiple channels including web, mobile, call center, Facebook, Twitter and Instagram – monitoring all the channels and having the tools in place to enable a single view of customer communication and respond is critical.

Identifying customers across proliferating social platforms, devices and channels is difficult and becoming more difficult every year. Having the right technology in place to knit together the different streams of data is a good start but there are often gaps. These gaps mean that customers do get frustrated as they are not addressed as one individual. It is an area of focus for every organization to solve in the near future.

Ai: Can you cite examples where you feel you have excelled in offering what customers expect from loyalty?

GetGo is a very new program so the best is yet to come.  However we have built in some best-in-class features to deliver above and beyond expectations from launch.  These include any seat redemption, points pooling, dynamic top up and an expanding range of earning opportunities.

Ai: Where do you think airline loyalty programs generally are going wrong – from both technology and operations perspective?  

There are inherent issues with airline loyalty programs with broken commercial models, complex technology and omnichannel customer service.  Most programs from legacy carriers suffer from a lack of award seat availability due to the underlying business model and conflict with revenue management. 

At Cebu Pacific, we did not originally anticipate the need to view Instagram as an inbound customer service channel.  But we had to adapt our process to accommodate it after we received a complaint as a comment under a photo we had posted. 

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

Data analytics underpins the ability to deliver a tailored experience and appropriate offers in the most efficient way.  Applied correctly the insights derived from analytics are the most powerful aspect of loyalty marketing.  Simple profiling and targeting remain very effective.

The ability to deliver real time and highly targeting messages has finally enabled marketers to answer the conundrum of right customer, right place, right time with the right offer. Predictive modeling adds another dimension to aid targeting and improve marketing efficiency. Differentiated service and offers are only made possible with data analysis. So the role of data analytics is simply huge.

Ai: What would you term as major priority today especially when airlines are not only expected to recognize a loyal flyer, but also achieve top-notch personalization?  

Process and operationalization do not tend to be viewed as a major priority for marketers.  However if you are going to deliver a consistent and yet tailored experience to members you have to be able to both clearly define processes and execute flawlessly. 

Delivering benefits such as priority boarding or baggage handling requires consistent process across wide networks. As campaigns become more complex and multi-dimensional the need to manage them efficiently relies on process. Points programs are essentially mini banks but managed by marketers. Without well defined processes to award and redeem points and secure data programs are frustrating for members best case and worse they are open to fraud and abuse.

Ai: What’s on your agenda for Cebu Pacific Air in the next year or so?

A major focus on the basics. Make the program attractive and efficient to attract members and keep the current ones engaged and excited.  We are adding new partners and ensuring we serve current ones well.  We have a roadmap of exciting developments in the coming 12 months but these need to be built on a solid foundation.

(The airline has a 55-strong fleet, and it carried 16.9m  passengers in 2014, 17.5% more than flown in 2013. Ancillary revenue grew 29% to P8.7 billion last year. It posted a core net income of P 3.3 billion, up 77% compared to the previous year, on the back of notable improvement in both revenues and operating expenses).

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