The Increasing Importanceof Online Strategies for Loyalty Programs- BalticMiles Case Study -Gabi Kool – CEO BalticMiles SI...
INTRODUCTION TO BALTICMILES
• Global award winning loyalty program• Leading Loyalty Management Company in N&E Europe, based in Riga• Founded in 2009, ...
1. airBaltic is the shareholder of BalticMiles2. Points issuing partnership to help drive customer acquisition and retenti...
Tickets on airBaltic flightsBalticMiles on-line web shop>3000 products, worldwide delivery (Money + Points)– Experiences –...
 Operate Program Open & manage customer accounts Manage rewards portfolio & redemption Manage the database Recruit ne...
HOW LOYALTY COMPANIES FUNCTIONPoint Earned byMemberTime: Life of a Point~ 2 yearsPoint Redeemedby MemberPoint ActivityCash...
GLOBAL COALITION LOYALTY MAP
THE CONTEXT OF THE OPPORTUNITYUS$ 2.3 bln (MktCap)US$ 2.6 bln (MktCap)AU$ 417 mln(PBT 1H 2011)UK:GBP 368 mln(Acquisition p...
7 mln 143 mln46 mln5 mlnCORE FOCUS MARKETS
LOWLOWLOWHIGHHIGHHIGHFind new customersAbility to engage membersInvestment requiredCOALITION VS. STAND-ALONEStand-alone pr...
ONLINE STRATEGIES IN GLOBAL LOYALTY
LEADING TECHNOLOGY INFRASTRUCTUREiLoyal loyalty enginePartner integration solution – direct integration, web, POSMultiling...
INTERACTIVE PARTNER LOCATORWhere can Iearn points?One commonpointscurrencyacross allpartnersINSPIRED BY:
PERSONALISED E-COMMUNICATIONPlease sendme relevantinformationINSPIRED BY:
IMPROVE THE ONLINE EXPERIENCE
ONLINE REWARDS CALCULATORHow fast canI earn myreward?Offer full mix of pragmatic/cash rewards and moreaspirational rewards...
USE DATA INSIGHTSData mining within acoalition program revealssurprising insights andmarketing opportunitiesINSPIRED BY:
MY OFFERS• Personalized bycountry and gender• 30 000 page views permonth• Monthly promotionsvia e-mail campaignsINSPIRED BY:
E-MAIL COMMUNICATION - SILVERPOPCoalition Personalized newsletterSent to all opt in coalition membersTwice each monthBased...
E-MAIL COMMUNICATION LIFECYCLEWelcomemessage PersonalizednewsletterNot activefor 90 daysWelcomemessage Quarterlyaccountsta...
TRIGGER BASED CAMPAIGNSDeliver more effectivecommunicationsReward the behaviouryou seek:Low base points,aggressive bonus p...
An opportunity to havea ‘flight’ in a realisticBoeing 737 simulatortogether with the CEOof airBaltic who is alsoa certifie...
LINK TO BELOVED APPS
DETAILED CASE STUDY:ONLINE CAMPAIGN‘WE LOVE TO GIVE YOU MORE’
1. What should our new membership level be called?2. What should members do to reach this level?3. What privileges should ...
HOW MANY IDEASDID WE RECEIVE?
?
How we segmentedBalticMiles usersHow we created theindividual tasksTOP20 clients bytotal spending ineach categoryActive in...
500 000UNIQUEWELCOMEVIDEOS
AlexALEX
⚔THE RESULTS
0.1%12.9%87%22%opened7%CTR53%opened16%CTR48%opened22%CTRHIGHESTCONVERSIONRATESIN THE HISTORY OFBALTIC MILES5%OF THE ACTIVE...
Gabi KoolCEO BalticMilesRiga International AirportZiemelu street 4Marupe, LV-1053, LatviaPhone: +371 6778 8363E-mail: gabi...
iLive 2013 - Gabi Kool - The Increasing Importance of Online Strategies for Leading Loyalty Programs – Case Study
iLive 2013 - Gabi Kool - The Increasing Importance of Online Strategies for Leading Loyalty Programs – Case Study
iLive 2013 - Gabi Kool - The Increasing Importance of Online Strategies for Leading Loyalty Programs – Case Study
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iLive 2013 - Gabi Kool - The Increasing Importance of Online Strategies for Leading Loyalty Programs – Case Study

  1. 1. The Increasing Importanceof Online Strategies for Loyalty Programs- BalticMiles Case Study -Gabi Kool – CEO BalticMiles SIAChairman of the Board Коалишн Ревордс OOO (Coalition Rewards)Riga, iLive Conference 2013May 9, 2013
  2. 2. INTRODUCTION TO BALTICMILES
  3. 3. • Global award winning loyalty program• Leading Loyalty Management Company in N&E Europe, based in Riga• Founded in 2009, fast growing and profitable• First pan-Baltic coalition loyalty program with multiple partnerships• 600 000 loyalty members• 2/3 of transactions generated by non-airline partners• Rewards portfolio offering free flights and 3 000+ redemption items• 200+ global partners (95 new ones in 2012), representing 20 000 Points ofSales, resulting in 40% revenue growth from non-airBaltic partners in 2012• Three banking agreements signed in Finland and Russia, including first whitelabel program. Revenue growth of 400% forecasted for 2013BALTICMILES INTRODUCTIONLoyalty 2013 Global Winner-Innovation in Technology-
  4. 4. 1. airBaltic is the shareholder of BalticMiles2. Points issuing partnership to help drive customer acquisition and retention(airBaltic pays BalticMiles)3. Points redemption partnership to provide flight rewards(BalticMiles pays airBaltic)4. BalticMiles is an independent company with its own management team,supporting 220 additional partners with their loyalty marketing effortswithin the coalitionVision statement for BalticMiles Ltd.:Be the leading loyalty marketing company in North & Eastern Europe,supporting leading airlines, retailers and financial institutionsRELATIONSHIP BALTICMILES - AIRBALTIC
  5. 5. Tickets on airBaltic flightsBalticMiles on-line web shop>3000 products, worldwide delivery (Money + Points)– Experiences – SPA treatments, dance lessons, cookinglessons, wine school, horse riding, hot air balloonflights etc.BalticMiles Music shop (Universal Music artists)Lux Express bus ticketsDonationsAuctions – experiences money can’t buyREWARDS IN PROGRAM
  6. 6.  Operate Program Open & manage customer accounts Manage rewards portfolio & redemption Manage the database Recruit new Partners Manage retailers relationships Manage all communication channels Sign up own customers at POS Provide Manager with transactional data Issue Base Points all customers/ all POS/ all products Issue Bonus Points as per business objectives Promote the Program Every member gets a card for free Collect Base Points = everyday shopping Receive Bonus points = when respond tooffers Redeem Points for Rewards Sell rewards to Manager Fulfill rewards to CustomersMembersManagerPartnersSuppliersRoles within coalitionWHAT IS A COALITION PROGRAM?
  7. 7. HOW LOYALTY COMPANIES FUNCTIONPoint Earned byMemberTime: Life of a Point~ 2 yearsPoint Redeemedby MemberPoint ActivityCash ImpactAccountingTreatmentOperatingCostsPoints EarnedPoints Added to Point PoolCash Received (Billings)Fair Value of awards deferredMargin componentrecognizedPoints remain in PoolPositive Working CapitalDeferred revenue liabilitymaintained for fair value ofawards expected to beredeemedPoints Redeemed from PointsPoolCash Outflow to PurchaseRewardsPoints Liability Reduced;Redemption Revenue &Redemption CostsRecognized in P&LSources of ValueGross Margin on Points + Working Capital + Breakage (Expiry)Salaries, IT, Service centre, admin etc
  8. 8. GLOBAL COALITION LOYALTY MAP
  9. 9. THE CONTEXT OF THE OPPORTUNITYUS$ 2.3 bln (MktCap)US$ 2.6 bln (MktCap)AU$ 417 mln(PBT 1H 2011)UK:GBP 368 mln(Acquisition price)EUR 496 mln(Acquisition price)....... Northern / Eastern Europe loyalty market still largely untapped..........US$ 7.7 bln(MktCap ADS)
  10. 10. 7 mln 143 mln46 mln5 mlnCORE FOCUS MARKETS
  11. 11. LOWLOWLOWHIGHHIGHHIGHFind new customersAbility to engage membersInvestment requiredCOALITION VS. STAND-ALONEStand-alone program Coalition programStand-alone program Coalition programCoalition program Stand-alone program
  12. 12. ONLINE STRATEGIES IN GLOBAL LOYALTY
  13. 13. LEADING TECHNOLOGY INFRASTRUCTUREiLoyal loyalty enginePartner integration solution – direct integration, web, POSMultilingual Loyalty web solution with CMS, including smartphone and tablet solutionMultilingual, multicurrency Reward shop, worldwide delivery, slider, auctionsE-mail marketing platformCrowdsourcing toolB2B sales and CRM toolBI toolBSC tool
  14. 14. INTERACTIVE PARTNER LOCATORWhere can Iearn points?One commonpointscurrencyacross allpartnersINSPIRED BY:
  15. 15. PERSONALISED E-COMMUNICATIONPlease sendme relevantinformationINSPIRED BY:
  16. 16. IMPROVE THE ONLINE EXPERIENCE
  17. 17. ONLINE REWARDS CALCULATORHow fast canI earn myreward?Offer full mix of pragmatic/cash rewards and moreaspirational rewardsINSPIRED BY:
  18. 18. USE DATA INSIGHTSData mining within acoalition program revealssurprising insights andmarketing opportunitiesINSPIRED BY:
  19. 19. MY OFFERS• Personalized bycountry and gender• 30 000 page views permonth• Monthly promotionsvia e-mail campaignsINSPIRED BY:
  20. 20. E-MAIL COMMUNICATION - SILVERPOPCoalition Personalized newsletterSent to all opt in coalition membersTwice each monthBased on reading behavioursCoalition Targeted newsletterSent to a particular segment depending oncampaign offerOpen rate 18%CTR 1.5%Coalition trigger-based e-mailsBehaviour triggers the campaignand determines timingOpen rate 35%CTR 8%Coalition Account statementSent to all non-subscribersLast Tuesday of every quarterPersonalized newsletterSent to all opt in coalition membersTwice each monthBased on reading behaviorsTargeted newsletterSent to a particular segment depending onthe campaign offer
  21. 21. E-MAIL COMMUNICATION LIFECYCLEWelcomemessage PersonalizednewsletterNot activefor 90 daysWelcomemessage QuarterlyaccountstatementEnoughFor SuperSaverCloseto VIPClose toExecutiveAfterspendingall PointsTargetednewsletterYESNOEducationaltriggerSubscribedto e-mailcommunicationGeneral communicationTargeted communication & Triggers
  22. 22. TRIGGER BASED CAMPAIGNSDeliver more effectivecommunicationsReward the behaviouryou seek:Low base points,aggressive bonus points
  23. 23. An opportunity to havea ‘flight’ in a realisticBoeing 737 simulatortogether with the CEOof airBaltic who is alsoa certified pilot.Sold for a recordnumber of 211 000PointsA custom madewedding dance by themost famous danceinstructor in LatviaAn upscale winetastingA business class dinner for2 delivered to your homeand served by a flightattendantONLINE AUCTIONS
  24. 24. LINK TO BELOVED APPS
  25. 25. DETAILED CASE STUDY:ONLINE CAMPAIGN‘WE LOVE TO GIVE YOU MORE’
  26. 26. 1. What should our new membership level be called?2. What should members do to reach this level?3. What privileges should these members enjoy?
  27. 27. HOW MANY IDEASDID WE RECEIVE?
  28. 28. ?
  29. 29. How we segmentedBalticMiles usersHow we created theindividual tasksTOP20 clients bytotal spending ineach categoryActive in past 6months with morethan 1000 pointsaccruedReach a personaltarget and get +50%of pointsVisit 5 partnersand get +500 pointsReach a personaltarget and get +50%of points0.1%12.9%87%Less than 1000points accrued inpast 6 months
  30. 30. 500 000UNIQUEWELCOMEVIDEOS
  31. 31. AlexALEX
  32. 32. ⚔THE RESULTS
  33. 33. 0.1%12.9%87%22%opened7%CTR53%opened16%CTR48%opened22%CTRHIGHESTCONVERSIONRATESIN THE HISTORY OFBALTIC MILES5%OF THE ACTIVEDATABASE SEGMENTMULTIPLIED THEIRALREADY HIGHNUMBER OF POINTSEARNED BY3.5 TIMES
  34. 34. Gabi KoolCEO BalticMilesRiga International AirportZiemelu street 4Marupe, LV-1053, LatviaPhone: +371 6778 8363E-mail: gabi.kool@balticmiles.comWeb: www.balticmiles.comThank You

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