Tnooz-Collinson Latitude webinar – Ancillary services or customer loyalty:

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The 60-minute session will give attendees a better understand of how using data more effectively can build on customer loyalty through positive interaction and engagement.

Panelists are:

Janet Titterton, Collinson Latitude, business planning director
Alexander Meili, ICLP, European planning director
James Berry, The Collinson Group, director product and planning

Moderator:

Kevin May, Tnooz editor and co-founder

Published in: Business, Technology
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  • Source: IdeaWorks
  • Quantas1,087,268,000835 million is AR
  • BMI – recent developmentAir Canada – was around in 2009
  • Plus EasyJet Flexi Fares which include:Unlimited free date changes to your flight within a 4 week period1 piece hold luggage1 piece hand luggaeSpeedy boardingNo extra booking fees
  • May 19, 2011 - TnoozHotelTonight, the sleek iPhone app for same-day hotel bookings, began enabling hoteliers to merchandise to consumers within the app for extras available that evening. http://www.tnooz.com/2011/05/19/mobile/hoteltonight-app-launches-mobile-merchandising-tonight/
  • No.1 Ancillary Revenue Generator of Airlines
  • The obvious reasons for these activities are: increased perceived value of the points (member), reduced liability and stronger awareness (programme). However, if you dig deeper, there is another reason why low redemption awards are the right tactic, particularly when it comes to engender additional purchasing activity.More reasons:They create an emotional bond with your members •They drive direct and trackable revenue •They keep your program compelling and relevant •They breed multi-dimensional partnerships •They increase the cut-through of your communications
  • Or better say: Hypothesis?
  • The cash plus points slider moves price dynamically between points and cash So we see that personalised software and CMS converge
  • Right customer, right time, right choice
  • Tnooz-Collinson Latitude webinar – Ancillary services or customer loyalty:

    1. 1. Ancillary services or customer loyalty: where should the focus be? 20 October 2011
    2. 2. Kevin May,Editor
    3. 3. Poll no. 1
    4. 4. Ancillary services or customer loyalty : where should the focus be? The following is intended to outline our general product direction and is intended for information purposes only.The development, release, and timing of any features described for Latitude’s products remains at the sole discretion of Latitude.
    5. 5. Janet TittertonBusiness Planning DirectorCollinson Latitude
    6. 6. Ancillary services or customer loyalty : where should the focus be? Webinar content overview: 1. Next generation ancillary revenue 2. FFP / FGP - ‘The Golden Moment’ 3. Driving program engagement
    7. 7. Ancillary services or customer loyalty – where should the focus be?
    8. 8. Poll no. 2
    9. 9. The evolution of ancillary revenues Ancillary revenues have transformed the Airline and Hotel industries Type Sample Products Baggage fees Product Seat / room selection Unbundling Booking fees WiFi Product Lounge access Enhancement Priority security Customer Extended check-out focused initiatives Entertainment package Repackage / Business traveller package Re-bundle Luxury package
    10. 10. Next generation ancillary revenues: a renewed emphasis on the customer
    11. 11. What is value creation? How can brands add value?Adding value around the core product – through bestpractise e-commerce (up-selling, cross-selling) andmemberships FFP / FGP Core Product Core
    12. 12. How do FFP’s/FGP’s fit into ancillary revenue reporting?Reporting of Ancillary Revenues not standardised:Annual Financial Disclosures of Ancillary Revenue - 2010 2010 2009 2008 2007Results posted by Results posted by Results posted by Results posted by 47 airlines 47 airlines 35 airlines 23 airlines €15.11 billion €10.95 billion €7.68 billion €1.72 billion ($21.46 billion) ($13.47 billion) ($10.25 billion) ($2.45 billion)
    13. 13. Top five reporting ancillary revenue Ancillary revenue Reporting ancillary Airline (Euros) revenues Not known due to recent United Continental €3,530,000,000 merger Delta €2,612,200,000 Other revenue American €1,379,524,000 Other revenue Qantas €1,087,268,000 Separate business US Airways €834,492,000 Not known
    14. 14. Some examples...
    15. 15. BMI & Air Canada
    16. 16. United Airlines & Jetstar
    17. 17. Premier Inn & IHG
    18. 18. HotelTonight
    19. 19. Trainline – web loyalty
    20. 20. Alexander MeiliEuropean Planning Director - ICLP
    21. 21. Poll no. 3
    22. 22. The strongest ancillary revenue driver: FFPs 9.3 billion $ 46 mio. $510 mio. 278 mio. $8.250 mio. 13 mio. 43 mio. $100 mio. $325 mio. 20 mio. $150 mio. Total Members of Frequent Flyer Total Annual Revenues generated by FFPs Programmes (FFPs) through the sale of miles N N (estimate)W E W E S S © ICLP Research 2010 © ICLP Research 2010
    23. 23. Is there still room for growth? Yes, but….. The challenge: The answer:“I can’t get my rewards” Redemption is “My miles are not King worth anything”
    24. 24. Benefits of “rewarding” your customer Increased VALUE of loyalty currency Additional Reduced Redemption ENGAGEMENT LIABILITY with program Stronger AWARENESS of program
    25. 25. ‘The Golden Moment’ A simple principle Members are not fully engaged with a loyalty program until they have redeemed their points or miles – at least once and after a reasonable short period of time (7-15 months)!
    26. 26. The Golden Moment – or - Who is the better client? Points Swinger Points Shepherd GoldenPoints accrual (revenues) 8,000 Moment 6,000 X 1.5 4,000 2,000 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Months
    27. 27. Case study Points Swinger ‘Golden Moment’ 11 months Points Shepherd Year 1 Accrual Pace Year 2 (miles earned) (avg. miles earned) Accrued 1-20.000 4.505 4.095 X1.1 10-38% X1.4 more miles 20-40.000 24.292 17.597 in Y2 40.000+ 54.147 46.909 X1.2
    28. 28. Similar Logic: American Express Membership Rewards“Ease of redemption is critical to the perceived value ofrewards. This is a nice addition to the American Expressprogram”Colloquy Awards Jury – September 2011
    29. 29. Consequently, actions to best leverage the power of the Golden Moment…
    30. 30. James BerryDirector, Product and PlanningThe Collinson Group
    31. 31. Poll no. 4
    32. 32. What is value creation? How can brands add value? o Redemption – more choice, incl. points + cash o Real time offers Airline and hotel Sees: • Opportunity to engage customers, even when they are not booking with your FFP / FGP brand Core Product • Makes proposition clearer / easier to sell Core Customer Sees: • “This brand knows me and has everything I need” • “This is helping me get better value from the loyalty points currency”
    33. 33. Convergence of travel, retail, technology Travel Technology Retail
    34. 34. Loyalty points as a valuable currency “I want to earn “I have a choice of or redeem on a cash or points to transaction – purchase with” let me decide” “I got real value out of that engagement – I won”
    35. 35. o Connected when I need ito Relevance and choiceo Aspirationalo Fun and interactiveo Global and local
    36. 36. Technology enabling multiple touch points Mobile / tablet Online On board Global / Cross- In the border airport At In store check-in
    37. 37. Some examples...
    38. 38. Asia Miles and Velocity
    39. 39. In summary Choice Relevance Value Creation Connected
    40. 40. Q&A
    41. 41. Thank You!Archive copy of today’s webinar will appear on www.tnooz.com within a few daysSend questions and comments to Kevin May, kevin@tnooz.com

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