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NIIT Technologies White Paper

Frequent Flyer Programs: Achieving Next LevelFrequent Flyer Programs: Achieving Next LevelAmogh Joshi & Syed Masood

CONTENTS

Executive Overview 3

Reaching Next level 3

Acquire 3

Know your members 4

Retain 4

Grow 5

Conclusion 6

TRANSPORTATION

JOURNEYJOURNEY

TRANSPORTATION

TRANSPORTATION

TRANSPORTATION

TRAVEL

TRAVEL

TRAVEL

TRAVEL TRAVELTOUR

GUIDE

GUIDEGUIDE

CARGO

CARGOCARGO

CARGO CARGOLOGISTICS

LOGISTICS

PACKAGING

AcquireCustomer loyalty is earned by virtue of an enriched user experience

that compells the traveller to come back willingly. However, it does

make a differece, to have more members on roll so as to

understand them better and offer

delightful service accordingly. Attracting

more members and getting them to

reveal themselves has always been a

tough job. Member acquisition can be

taken to next level by means following key measures:

(Next Level) Channels:Traditionally paper forms and website were the only channels of

enrolment. With the need to grow, loyalty managers have been

busy exploring more and more accessible channels for

enrolment. Enrolment through mobile apps and in-flight

enrolments via smart tabs are getting trendy. With such channels,

enrolment has become not only hassle free for the FFP, but also

convenient to members.

Next Level of Enrolment Channels

Loyalty not only builds better connections with travelers, but also is

a significant revenue generator for airlines. A plethora of changes

are being made to airline loyalty strategies so as to comply with the

digital customers’ expectations and the rapidly changing industry

landscape. Abundance of digitally available customer information

has opened up new vistas to understand and connect with

travelers; however, such opportunities call for major reforms in

existing loyalty strategies.

The mismatch between opportunity and capability is because of

saturated strategies, which very often inhibit fruitful connection with

frequent flyers, and out of pace technological innovation. In order

to achieve an equilibrium, airlines must strive hard to improve the

service experience and minimize disconnects through alternate

means like product differentiation, innovation and personalization.

Contrary to the convention of just retaining a frequent traveler,

loyalty has a new goal today - to earn the members as brand

ambassadors, endorsing the services to other prospects. This

white paper intends to explore the much needed capabilities,

required to embrace the next level of FFP.

Reaching Next levelReaching to next level needs sound interpretation of customer

behavior, acumen to gauge the current and upcoming shifts and a

futuristic vision to provide better customer experience. If the course

to Next Level of FFP be mapped, four key factors emerge as

important and non negotiable milestones in the due course:

i. Acquire: Identify the means to source in more loyal customers.

ii. Know: Analysis of traveler data to capture customer behavior

and traits for better decision making.

iii. Retain: Strategize to prevent the current base from competitors.

iv. Grow: Increase value proposition for enhanced customer

satisfaction

3

Executive Overview

Mobile Apps: Rise of smart phones has brought enrolment to the finger tip of customers. A dedicated app surely helps.

Tabs / Other Hand Held Devices:

Use of Tabs and other HHDs can make enrolment easier during the journey lifecycle, especially at port or in-flight.

Social Platforms: Platforms like Facebook and Whatsapp, where a good amount of customers’ time is spent, pose as a real good option to channelize enrolment through.

Kiosk/Portals : Self service options like kiosk or portals can be exploited to gain more members. Also, the provision to issue instant cards is also plausible.

Tabs / Other Hand Held Devices:

SMS and IVR are in vogue to offer enrolment at will of customers.

Know your membersThe only way to serve your member

and gain the patronage is to know

them better. The two step process to

understand your member is to capture

as much information about them, and

being able to process this information

to analyze the pattern, need, preferences, likes and dislikes.

Data AcquisitionThe traditional approach of capturing member details upfront, at

the time of enrolment, gives a mere peek into customer’s

lifestyle and traveling preferences. The questionnaire method is

not only cumbersome but also conceives fabricated results

(though not always).

The Steady Way:

A reliable way of understanding customer is to take a steady and

ongoing approach towards data capturing. Such an approach

consists of two principal components:

i. Identify reliable touch points:

The travel lifecycle of a passenger goes through various services

touch points e.g. Res office, Check-in desk, in-flight, post-flight

instances etc. At every point customer offers crucial clues to its

preference. A loyalty manager should invest effort to identify such

touch points which provide reliable information without

compromising convenience.

ii. Examine the touch point affairs:

To obtain information it is critical to have an ongoing audit of the

touch point affairs and drain the information to a central database

where it is collated and associated with an entity (Profile). If need

be, the touch point transactions could be modified to obtain

desired information, however this should never come at the cost of

customer experience.

There are approximately eight touch points, which can be used to

capture information in a steady approach. Of them all in-flight and

lounge time, because of their longevity, can be well utilized to

understand customer behavior. Tools (like Quiz, questionnaire,

games) accompanied by incentives may bear more fruits during

this time. Travel preference, e.g. Carrier, schedule, frequency etc.

and in-flight preferences can be deduced from booking and

check-in data.

AnalyticsAccess to data never concludes to a clear understanding, unless it

is sorted, processed and analyzed. Raw data is just an increasing

on the disk size unless it is analyzed effectively to understand flying

patters, preferences, like and dislikes. Even the analysis is waste if

the conclusion reached is not actionable. The next level dimension

to analytics is time and action. Information not fetched in time or

not put to action leads to an opportunity lost. The next level of

loyalty calls for better formulation of data and if required,

investment in next generation intelligence tools.

4

(Next Level) Convenience:

Airlines, which consider customer convenience as paramount, are

more likely to get better results. Choice of a channel must always

consider ease as an essential factor of decision. Also the

enrolment pitch should always be researched and well timed so as

not to burden or bore the customer. Travelers are more

approachable when in flight; however, enough measure should be

taken to keep the enrolment forms short and pleasing though not

discounting the required information.

(Next Level) Campaign / Promotion:

Wonderful results are expected once the offer to enroll is

accompanied with an instant value or a promise to deliver value in

real short terms. Campaigns are instrumental in educating the

prospects about the benefits, privileges and attention associated

with a FFP. Promotions not only persuade customers to join the

group of the recognized (program) but also facilitate cross/up

selling products. Important events, leisure or commercial, can be

utilized to launch well crafted campaigns or promotions.

RetainThe primary objective of FFP is to

retain the travelers, thereby mitigating

the risk of losing business and any

erosion of existing customer base. This

objective is achieved in two ways -

firstly by understanding customers’ travel preferences and

serve them exactly the way they want. Secondly, by making

efforts to improve customer engagement through social media,

mobile apps and dedicated member portals.

smooth redemption process involves uniform conversion rates,

wider currency acceptance and almost equal value of currency

across all partners.

GrowGrow with PartnersGrowth is a function of both acquisition and retention of members.

Both the factors, contributing to growth, are proportionally related to

value offered through a wide network of easily accessible partners.

Coalition with air and non-air enterprises motivates frequent use of

loyalty program which not only leads to higher rate of enrolment but

also delivers a surge in popularity of FFP. The alliances with partners

from various industries particularly from banking and financial have

enabled travelers to earn and redeem miles through a single

program irrespective of their airlines preferences.

Grow with ProgramsEvery traveler has its own purpose of travel; some travel for business

while others for leisure. The need and expectations from a journey

are subject to the purpose of travel, and thus comes the need for

programs that are customized for a particular traveler type. The fact

is that loyalty programs have already gone niche with corporate

programs, leisure programs, family/group programs and student

programs. However, it still remains a challenge to get maximum

benefits from such programs as careful classification and tactical

program designs along with smooth and easy transactions are very

important to get desired results.

Grow with Promotions and CampaignsIf not overdone, members feel connected as well as recognized

through cleverly designed campaigns and promotions. Beyond the

tradition of letter campaigns, loyalty has numerous platforms at its

disposal now. Some of the recent promotions tactics that not only

motivates the existing members but also increases the customer

base are:

• Launch a mobile game for members.

• Personalized gifts to members travelling First Class or Business

Class. – A personalized bag tag with imprinted member details

could do wonders.

Apart from routine benefits, like priority baggage or immigration

pass etc. loyalty managers must also consider the following

perspectives to stay ahead of competitors.

Stay in touchFFPs need to explore more touch points apart from existing eight

basic air journey touch points. Devices like smart phones and

tablets improve brand visibility and reach out to travelers through

service messages, alerts, greeting and promotions. Also, wallet

presence and brand recall can be enriched by customized cards as

well as a network of good partners.

LocalizeLocalization of program features based on the commitment to social

behavior and cultural integration will be an important factor for

penetrating the local market other than the home base. While British

members will like to be involved Co-Creation of program benefits,

Indian prefer instant and confirmed, available air rewards.

Personalize LoyaltyCustomers love personal attention.

Research proves that members feel

privileged when addressed by their

name while being served in-flight, at

check-in gate and other points of interaction. Top tier members

even expect personal meet and greet service imparting a sense

of recognition.

Personalized communication, customized cards, and greetings at

the right occasion along with a personalized service package surely

do wonder to air loyalty programs.

Missing you mailerA missing you mail to frequent flyers that have not flown with airlines

in last few months can motivate member to choose the airline

whenever they plan to fly next. An interesting promotional offer

attached with the mail will bring favorable results faster.

SimplifyCustomers find complex loyalty programs frustrating as excess of

rules make redemptions a difficult task. As complexity often

discounts the value, FFPs must strike a perfect balance between

offered value and complexity associated with the redemption. A

5

• Organize member only events yearly - Qantas Frequent Flyer

members have exclusive access to a selection of trusted wine

brands from Qantas epiQure cellar.

• Provide access to lifestyle events – Hopscotch Entertainment

One Offer allows Qantas Club members access to local and

international films at cinemas.

• Offer surprise benefits to top tier members - instant onboard

class upgrade etc.

6

ConclusionGlobal changes in political and economic environment are

continuously shaping needs and expectations of frequent

travelers. The ‘next level’ of loyalty can be achieved not only by

staying in pace with these changes but also by keeping a futuristic

vision and precise understanding of customer behavior. Because

of lower acquisition cost, profitability requires increase in repeat

business resulting from a delightful service experience. As the

expectations are continuously changing, a delightful experience

can only be offered by a reformed loyalty proposition packaged

with exciting add on.

To get the FFP future ready, next level of reforms is required on all

loyalty dimensions i.e. Acquire, Know, Retain and Grow. As long as

loyalty managers have novel ideas to stand out on these

dimensions; viability, growth and profitability of a scheme remains

much achievable.

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Write to us at marketing@niit-tech.com www.niit-tech.com

NIIT Technologies is a leading IT solutions organization, servicing customers in North America, Europe, Asia and Australia. It offers services in Application Development and Maintenance, Enterprise Solutions including Managed Services and Business Process Outsourcing to organizations in the Financial Services, Travel & Transportation, Manufacturing/Distribution, and Government sectors. With employees over 8,000 professionals, NIIT Technologies follows global standards of software development processes.

Over the years the Company has forged extremely rewarding relationships with global majors, a testimony to mutual commitment and its ability to retain marquee clients, drawing repeat business from them. NIIT Technologies has been able to scale its interactions with marquee clients in the BFSI sector, the Travel Transport & Logistics and Manufacturing & Distribution, into extremely meaningful, multi-year "collaborations.

NIIT Technologies follows global standards of development, which include ISO 9001:2000 Certification, assessment at Level 5 for SEI-CMMi version 1.2 and ISO 27001 information security management certification. Its data center operations are assessed at the international ISO 20000 IT management standards.

About NIIT Technologies

About the Author

NIIT Technologies Limited2nd Floor, 47 Mark LaneLondon - EC3R 7QQ, U.K.Ph: +44 20 70020700Fax: +44 20 70020701

Europe

NIIT Technologies Pte. Limited31 Kaki Bukit Road 3#05-13 TechlinkSingapore 417818Ph: +65 68488300Fax: +65 68488322

Singapore

India

NIIT Technologies Inc.,1050 Crown Pointe Parkway5th Floor, Atlanta, GA 30338, USAPh: +1 770 551 9494Toll Free: +1 888 454 NIITFax: +1 770 551 9229

Americas

NIIT Technologies Ltd.Corporate Heights (Tapasya)Plot No. 5, EFGH, Sector 126Noida-Greater Noida ExpresswayNoida – 201301, U.P., IndiaPh: + 91 120 7119100Fax: + 91 120 7119150

A leading IT solutions organization | 21 locations and 16 countries | 8000 professionals | Level 5 of SEI-CMMi, ver1.2 ISO 27001 certified | Level 5 of People CMM Framework

Amogh JoshiAmogh is a Business Solution Specialist with NIIT Technologies TTL vertical. His passion is to provide creative CRM strategy that positively impacts on customer service, cost reductions and profit realization. Amogh has also worked extensively on various aspect of Airline Operations and processes. He has actively participated and contributed in designing and implementing different loyalty programs around the globe for CRANE for King Club (FFP for Kingfisher Airlines), CRIS for Skywards (FFP for Emirates Airlines), and CIS for Flying Club (FFP for Virgin Atlantic Airlines).

With around 11 years of work experience in design, development and support of IT systems for airlines and travel domain using SDLC and Agile methodologies, Amogh has been a catalyst in steering and formulating business strategies for organizations to achieve maximum gains on information technology investment.

He is a Certified Scrum Master, Oracle Certified Professional and an accomplished senior information technology professional with a sharp focus on designing quality solutions that is required in materializing customer centric business strategies.

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Syed MasoodSyed is a Business Analyst with NIIT Technologies Ltd, TTL vertical, one of the largest IT service providers to Airlines. He has been instrumental in implementing CRM and Loyalty solutions for global airlines, hotel chains, cruise lines and railways. Apart from Loyalty, he plays a crucial role in developing business assets on other airline operations including, Passenger services, Border Security, Passenger Screening and Profiling.

Across the globe, he has designed and implemented key IT solutions for airlines, ITCOS and Travel Agencies like American Express, Air India, China Eastern, Swiss Air, British Airways, South African Airways, SITA and Sabre. As an avid writer he has published several whitepapers and case studies on airline processes.

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