{"id":5210,"date":"2021-03-11T16:06:10","date_gmt":"2021-03-11T15:06:10","guid":{"rendered":"http:\/\/www.globalflight.net\/french\/?p=5210"},"modified":"2021-03-11T16:07:07","modified_gmt":"2021-03-11T15:07:07","slug":"are-loyalty-programs-ready-for-smart-data","status":"publish","type":"post","link":"https:\/\/www.globalflight.net\/french\/are-loyalty-programs-ready-for-smart-data\/","title":{"rendered":"Are loyalty programs ready for smart data?"},"content":{"rendered":"\n
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11 March 2021<\/span><\/em><\/p>\n\n\n\n

The availability of data has never really been an issue for loyalty programs. But transforming that mass of data into a commercially exploitable good is a bigger challenge, which will though become critical in the months ahead.<\/p>\n\n\n\n\n\n\n\n

The\nrecovery of the hospitality and airline market will be characterised by\ntremendous overcapacity. It is everybody’s guess whether it might be cheaper to\nkeep entire hotels closed and airplane fleets grounded, but the temptation to operate\nthese expensive assets risks being stronger. The result will be price wars and\nproduct enhancements – all good for the customer, but not necessarily for the\nbottom line of the operators.<\/p>\n\n\n\n

To counter\nall these challenges, loyalty programs are to play a major role. The theory was\nalways that these programs are not so much needed in good times – and people\ngot indeed distracted by finding secondary roles for them such as monetizing\ntheir currency -, but that they’d prove their real value in downturns.<\/p>\n\n\n\n

Few would\nargue that this moment of truth has now come for loyalty programs. <\/p>\n\n\n\n

Success\nwill be based on some required adjustments to the program offering, but\nespecially on the capacity of programs to use data in a smart manner. Of\ncourse, it will still be 1-to-n marketing – but the \u00ab\u00a0n\u00a0\u00bb value should\napproach 1 much more than in the past.<\/p>\n\n\n\n

The difficulty\nwill indeed be that not all historic data is fully relevant anymore – and\nnobody will tell you which part of your data is still relevant. Depending on\nyour downgrade policy, you may have a current top tier elite member, which will\nstill be at a mid-tier in two years and you will treat him as valued customer. As\na matter of fact, he might though have stopped all interaction with you, but is\nstill at a mid-tier level because you downgrade him only by one level each year.\nAs I saw the other day a gentleman posting a picture of his renewed Miles &\nMore elite credentials on Twitter, with the comment \u00ab\u00a0Memories of my previous\nlife\u00a0\u00bb.<\/p>\n\n\n\n

Usage of\nsmart data would include such sources and link it to his profile, understanding\nthat any future marketing efforts with him would be in vain (and can be\nstopped).<\/p>\n\n\n\n

Earlier\nthis week, I received one of the not very frequent emails from Flying Blue,\ninforming me about the fact that Transavia flights now also accrue a tier\nbonus. I haven’t recorded a single transaction with Transavia since the beginning\nof the partnership. Am I worth such a stand-alone mailing, being moreover based\nin Toulouse from where Transavia serves exactly one niche route, which started amid\nthe pandemic? And without mentioning that route in the mailing? A more relevant\n(=engaging) content could probably have been found for somebody with a rather\nrich history of transactions.<\/p>\n\n\n\n

For the\npast year, I must have received at least 30 (!) offers from TAP Air Portugal\nabout their promotions to subscribe to their mileage purchase packages. While\nthese offers basically provide an interesting value, at one point, they should\nunderstand that I don’t intend to jump on the waggon and try a different angle\nto catch my attention. And crossing internal data would even let them\nunderstand that I still have huge travel credits with them from cancelled\ntrips, struggling to use them as their network is of limited use to me. It’d be\nof more value to me (and create stronger loyalty) if they tried to address that!<\/p>\n\n\n\n

Until\ntoday, loyalty programs still try far too often to influence behaviour in a\ndirection of their own interest (e.g. towards high-margin non-air redemptions),\nrather than accepting the client as he\/she is. Finding always the appropriate\noffer is obviously impossible, but more tailor-making will definitely be\nrequired to remain relevant in the eyes of customers and keeping them engaged.\nMembership in any loyalty and subscription program is these days automatically\nassociated with the need to provide practical day-to-day value, on top of the\nmore mid-term perspectives of rewards and recognition.<\/p>\n\n\n\n

Loyalty\nmanagers (or their managers) still understanding monetizing the currency as primary\nobjective are not only missing a trick, but get distracted from investing their\nefforts into those areas, where they can make a revenue difference for their\ncompanies. How much money does a program make if I conduct my next online\npurchase over their shopping platform? And how much money would the airline make\nif I planned my next overseas family trip with it?<\/p>\n\n\n\n

With an\nindustry so proud of all the available data, it is time to exploit the related\nopportunities. There was never a better moment to prove the real value and\npower of a loyalty program to upper management.<\/p>\n\n\n\n

Are loyalty\nprograms ready for the challenge? I am afraid that most are not because they\nlack such a strategic view on the value of the data. What makes it easier for\nthose few more advanced than others in the area to stand out from the crowd and\nmake a difference. And for the others, there are at least some low-hanging fruits\nfor grab in order to build an easy business case for your managers.<\/p>\n","protected":false},"excerpt":{"rendered":"

11 March 2021 The availability of data has never really been an issue for loyalty programs. But transforming that mass of data into a commercially exploitable good is a bigger challenge, which will though become critical in the months ahead.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_links_to":"","_links_to_target":""},"categories":[37],"tags":[],"_links":{"self":[{"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/posts\/5210"}],"collection":[{"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/comments?post=5210"}],"version-history":[{"count":1,"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/posts\/5210\/revisions"}],"predecessor-version":[{"id":5211,"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/posts\/5210\/revisions\/5211"}],"wp:attachment":[{"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/media?parent=5210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/categories?post=5210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.globalflight.net\/french\/wp-json\/wp\/v2\/tags?post=5210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}