Embed Size (px)
Citation preview
A I R L I N E P A S S E N G E R
AP
EX
.AE
RO
QU
AR
TE
R 4
/ 20
11
C A B I N I N T E R I O R | C o n n e c t i v i t y | C o n t e n t | I F E | I n f l i g h t S e r v i c e s | M o b i l e | P r e / P o s t - F l i g h t | S o c i a l M e d i a
O f f i c i a l P u b l i c a t i o n o f t h e A i r l i n e P a s s e n g e r E x p e r i e n c e A s s o c i a t i o n
OPEN ALL HOURSDine whenever you want
with 24-hour galleys
ADD FRIENDS AND INFLUENCE PEOPLE
Earning passenger loyalty through social media
WIDE BODIESHow to seat the larger passenger
Making the right choice about infl ight wirelessARE YOU WELL-CONNECTED?
QUARTER 4 / 2011
54
QUARTER 4 / 2011
THE FUTURE OF LOYALTY IS SOCIALToday’s loyal passenger with a problem will not call your hotline to tell you, says Shashank Nigam
Tim Freyer was upset. An Executive
Platinum member of American
Airlines’ AAdvantage programme,
he had just touched down from
New York. While usually happy with the
airline’s service, he felt that an agent at the
Admirals Club had misguided him regarding
availability on an earlier fl ight. T is was the
second time it had happened in just a few
weeks and as an active tweeter, he broadcast
his annoyance.
American Airlines had no idea that Freyer
was upset because he had not called to tell
them about it. In fact, the airline had hardly any
information about Freyer at all, other than his
personal particulars, his sectors fl own, miles
earned and redeemed, and the address to which
to send his frequent-fl yer promotions.
Ironic, considering that anyone with an
internet connection could trip across Freyer’s
Twitter profi le and learn that not only is he an
Executive Platinum American Airlines fl yer but
that he reached 100,000 miles for the year in just
seven weeks; that he almost always travels in
fi rst or business class and uses the Admirals Club
lounge; that he frequents Miami, Los Angeles
and New York; and, most importantly, that he is
quick to share his travel experiences – good and
bad – with the connected world via Twitter.
Had Freyer called the AAdvantage hotline,
he would surely have been catered to in a jiff y.
But any airline loyalty executive who believes
that the frequent fl yer of today will call or write
to them when he has a problem, is living in the
dinosaur age.
T ere’s an age-old loyalty-marketing maxim
that states, “It is much harder to acquire a
new customer than it is to retain one.” As
we celebrate the 30th anniversary of loyalty
programmes – American Airlines launched
AAdvantage in 1981 – this is just as relevant
as ever. T e irony is that today there are more
airlines on Twitter (185 as of August 2011)
than there are running loyalty programmes
(approximately 179). So not only are travellers
taking to social media rapidly, airlines are
responding by proactively engaging them
through this medium. What does this mean
for loyalty programmes, since airlines have
traditionally been only good at driving buzz
through social media?
A recent study conducted by SimpliFlying
and Cranfi eld University, of social-media use
by people who fl y at least fi ve times a year,
concluded that frequent fl yers are twice as likely
to post comments and critiques on social media
than regular American adults. Moreover, over
80 per cent of frequent fl yers are on Facebook
and over 60 per cent regularly share photos and
videos online, often of their travels.
T ese are trends that airline loyalty
programmes need to tap into in order to be of
value to today’s socially connected frequent fl yer.
DRIVING LOYALTY THROUGH SOCIAL MEDIA
Even before Virgin America cut the ribbon of its
gleaming new Terminal 2 (T2) at San Francisco
International Airport, days before it began
operating fl ights from it, there was plenty of
“checking-in” going on during the Terminal’s
grand opening celebration.
T at’s because Virgin cleverly set up a social
scavenger hunt for guests to discover T2’s
innovative features, guided by Foursquare
“check-ins”. By virtually “checking in” at
diff erent locations set up throughout the
Terminal, and announcing their presence
on social networking sites like Facebook
and Twitter, participants earned badges
APEX4_54_60_SocialLoyalty_FINAL.indd 5 4APEX4_54_60_SocialLoyalty_FINAL.indd 54 18/10/2011 1 3:0318/10/2011 13:03
55
APEX | AIRLINE PASSENGER EXPERIENCE
SOCIAL MEDIA
* Figures for 2007, ladder and descriptions adapted from Forrester’s NACTAS Q4 2006 Devices and Access Online Survey
THE FREQUENT FLYER PARTICIPATION LADDER*
33%
19%
15%
19%
13%18%
38%
27%
28%
54%
US adult online consumers
Frequent fl yers
Creators(publish content)
Critics(comment and post)
Collectors(use RSS or feed readers)
Joiners(publish, comment, share)
Spectators(read, watch
but don’t interact)
A MAJORITY OF FREQUENT FLYERS LIKE AT LEAST ONE AIRLINE ON FACEBOOK
38% None
53% 1 to 5
4% + 11
5% 6 to 10
A LARGE MINORITY OF FREQUENT FLYERS FOLLOW SEVERAL OF THEIR FAVOURITE AIRLINES ON TWITTER
66% None
24% 1 to 5
6.3% + 11
3.7% 6 to 10
redeemable for prizes. Grown women and men
were literally running around the terminal
hoping to see their names on the leader board
set up in the main hall.
Around the same time, low-cost UK-based
carrier bmibaby announced a partnership with
Gowalla, a location-based network similar to
Foursquare, that introduced gold, silver and
bronze “pins”, not for actually logging miles on
bmibaby, but for checking in virtually at any of
the carrier’s 39 airports. Check-ins earned entry
into a lucky draw to win free tickets on the airline.
JetBlue began awarding actual TrueBlue points
(good for free fl ights) and partner discounts
for virtual check-ins at its airports via its “Go
Places” application on Facebook. Meanwhile,
Air New Zealand started granting Foursquare
“mayors” (those who have checked in more
than any others) free access to its Koru Lounge,
regardless of the cabin class they were fl ying.
However, to achieve major goals for the loyalty
programmes, social initiatives cannot be ad hoc,
as has been the case with most of the airlines
mentioned above. T ere needs to be a clearly
defi ned social loyalty strategy that is profi t-
oriented, not just buzz-focussed.
CAN SOCIAL LOYALTY DRIVE PROFITS?
One of the readers at SimpliFlying.com asked
recently, “How can airlines monetise social
media? T ings like brand advocates are all well
and nice but how do they add to the bottom line?”
T ere is a strong potential for monetisation. On
average, 85 per cent of frequent-fl yer programme
(FFP) members have fewer than 25,000 miles in
their accounts. T at means they can hardly ever
use them for redeeming fl ights. T at also means
they see no value in FFPs. Giving even 100 miles
for sharing trip photos on Facebook can activate
a “sleeping frequent fl yer”.
Not only will the person’s activity go up
without even fl ying, but his earn-burn ratio
is likely to increase. Ultimately, these social
actions might also earn him real-world rewards
such as free lounge access.
T ese are just initial steps in what might
signal a new evolution in loyalty programmes.
T e ultimate goal is to drive loyalty, which
requires reciprocation from the customers.
T e good news is that there are potentially
infi nite ways (if you’re imaginative enough) of
creating a successful initiative. What airlines
need to keep in mind is that most customers
will become more loyal based on two things:
rewards or recognition (or both).
Eventually, airlines can be creating a
whole new tier of frequent fl yers, who need
not earn or burn miles by fl ying, but through
virtual incentives. T is would attract new
partners for the airlines, which then drives
revenue. Having such an incentive system
creates a diff erentiating factor for the FFP with
regard to other programmes, which is revenue
driving in itself.
APEX4_54_60_SocialLoyalty_FINAL.indd 5 5APEX4_54_60_SocialLoyalty_FINAL.indd 55 18/10/2011 1 3:0318/10/2011 13:03
56
QUARTER 4 / 2011
SOCIAL MEDIA
THREE STEPS TO GET STARTED WITH A SOCIAL LOYALTY PROGRAMME
In the SimpliFlying-Cranfi eld survey, 72 per cent of frequent fl yers said that they would join a
social loyalty programme given the chance. If airlines do this right, there are substantial benefi ts to
be derived for both parties.
FREQUENT FLYERS SEEK MULTIPLE BENEFITS BY FOLLOWING AIRLINES ON SOCIAL NETWORKS
To get the latest info about deals and
competitions
43.8%
To stay updated with latest news from
the airline
50%
To get real-time fl ight updates and announcements
22.2%
To contact the airline
14.2%
To affi rm loyalty to the airline
37%
1THE FIRST STEP is a paradigm
shift in which airlines reward
actions taken online – just
like Virgin America rewarding
check-ins at Terminal 2 with
virtual badges. Such virtual
rewards come at hardly any cost
to the airline, and can be used to
incentivise the frequent traveller to take actions
favourable to the airline.
Fifty-three per cent of the SimpliFlying-
Cranfi eld survey participants said that they
preferred to check in at locations where they
get virtual rewards from airlines. In fact, 61
per cent are willing to share their positive
experience with an airline online in return for
virtual goodies. T is ties in well with the fact
that a majority of travellers would pay more to
fl y an airline based on a positive review by a
friend, rather than picking the cheapest fare.
2 THE SECOND STEP is to
give real-world rewards for
virtual actions. Fans can
redeem points earned from
virtual actions, like sharing
photos and videos from
their trips, with Amazon
gift cards, priority check-in
on the next fl ight or even lounge access for the
“most liked” photos. At a point of development,
there should be the option to convert virtual
points into real frequent-fl yer miles.
Pluna Airlines of Uruguay has put in
place a system, called Flip.to, which allows
passengers to share their booking details with
friends on Facebook, Twitter or LinkedIn,
while they are still in the booking path, after
they have made the payment, in return for
100 frequent-fl yer points. T at’s a good way to
reward virtual actions.
3 THE THIRD STEP to
creating a successful social
loyalty programme is
social breakage. Loyalty-
programme managers
have long obsessed about
breakage, which in simple
terms is the difference
between the real value of a frequent-flyer
benefit, and the perceived value of a benefit.
A social loyalty tier would make a lot
more business sense, once the concept of
breakage applies. Very simply, this would
mean a benefit like a virtual badge costs the
airline much less than its perceived value by
the traveller.
FREQUENT FLYERS WHO WOULD JOIN A SOCIAL LOYALTY PROGRAMME
Yes72%
No28%
APEX4_54_60_SocialLoyalty_FINAL.indd 5 6APEX4_54_60_SocialLoyalty_FINAL.indd 56 18/10/2011 1 3:0318/10/2011 13:03
58
QUARTER 4 / 2011
Very strong
DEGREE OF INFLUENCE
Moderately strong
Somewhat strong
Not much
Not at all
FACTORS THAT ENCOURAGE FREQUENT FLYERS TO FLY A PARTICULAR AIRLINE
26.3%
2
5.6%
21.9
% 1
5.6
%
1
0.6%
Reading about friends’
experiences
27.7%
2
3.9%
21.4
% 1
4.5
%
12.6%
Deals and promotions on Facebook and
38
.1%
20%
1
8.1
% 1
5%
8.8%
34.2
%
22.4%
1
6.8
% 1
6.1
%
10.6%
Ability to earn points/vouchers
through social media sites
34
.2%
29.2%
2
1.1
%
1
1.2% 4%
Airline’s social media presence
(viral, videos, games, etc.)
FACTORS THAT MAKE FREQUENT FLYERS LOYALTO A PARTICULAR AIRLINE
Ch
eap
est
fare
Goo
d c
ust
omer
ser
vice
Earn
freq
uen
t fl
yer
poi
nts
Goo
d s
afet
y re
cord
On
boa
rd e
xper
ien
ce
Oth
er
15%
26.5%
2%
23% 23%
11%
ASSESSING THE FUTURE OF LOYALTY
4 years old
Airlines on TwitterAirlines with loyalty programmes
30 years old
191 179
The ability to sit next to a friend
or someone with similar interests
APEX4_54_60_SocialLoyalty_FINAL.indd 5 8APEX4_54_60_SocialLoyalty_FINAL.indd 58 18/10/2011 1 3:0318/10/2011 13:03
59
APEX | AIRLINE PASSENGER EXPERIENCE
A successfully executed social
loyalty tier would have a number
of benefi ts, which may be hard to
envision with traditional loyalty
programmes:
1. A brand advocate with a strong social network could act as a huge multiplier for the airline’s loyalty eff orts by getting members from his network involved with the brand.
2. T ere is very little lag between implementation and measurement. T e results can be seen very quickly indeed.
3. T ere is a sizable opportunity to move away from traditional loyalty programmes and off er something disruptive and innovative.
4. Low-cost and regional airlines that often do not have a loyalty programme to begin with would fi nd a social loyalty programme a good one to start with.
T e biggest paradigm shift airlines will need
to come to terms with while building a social
loyalty programme is to reward non-customers
as well as those who fl y often. A person who
fl ies only once a year and then with a cheaper
competitor, but jumps to the airline’s rescue
during a snowstorm to answer questions on
Facebook may just turn out to be as valuable as a
top-tier frequent fl yer.
But the former may not even be in the
airline’s customer relationship management
(CRM) system. Hence, in order to reward non-
customers as well as keep track of them, CRM
needs to be redefi ned as “cult relationship
management”.
T e passengers actually fl ying, along with
those voluntarily engaging with airlines, contain
within them the most valuable marketing
GET IT OFF YOUR CHEST.
Frequent fl yer – and even more frequent tweeter – Tim Freyer’s comments on his experience with American
are an example of the potential wealth of passenger feedback airlines can engage with via social media
EVERYONE’S A WINNER.
bmibaby used social media to offer points for checking in virtually at the carrier’s airports.
Check-ins earned entry into a lucky draw to win free tickets on the airline
CULT RELATIONSHIP MANAGEMENT
information – more than any gurus or expensive
studies can provide. It is simply a matter of
unlocking it, and with the resources with which
social media has armed airlines, there is simply
no longer an excuse for failing to deliver the right
marketing messages to the right customers all the
time, every time.
While hundreds of airlines have scrambled to
create a social media presence, whether
they will use social tools to engage with
customers eff ectively or merely as another
channel to push the same behaviour
becomes a question of culture.
Talking may create sales, but listening
creates relationships, which sustain an
airline in the long run. A one-way email
SOCIAL MEDIA
APEX4_54_60_SocialLoyalty_FINAL_JO.indd 5 9APEX4_54_60_SocialLoyalty_FINAL_JO.indd 59 19/10/2011 1 1:4819/10/2011 11:48
60
QUARTER 4 / 2011
PREFERRED WAYS OF EARNING LOYALTY POINTS VIA SOCIAL MEDIA
Strongly preferred Moderately preferred Somewhat preferred Slightly preferred Not at all
25%
2
5% 1
8%
1
7%
15%
Contribute to ideas on the airline’s social media page
33
%
28%
1
9%
12
%
8%
Provide positive
feedback about an
airline
Check in to locations
36
%
22.4 %
17%
1
5%
10% 3
8%
19%
17%
1
7%
9%
Become the airline’s brand ambassador
on social media sites
40
%
18%
16%
1
3%
13%
Tweet about the airline
40
%
27%
1
7%
1
0
% 7
%
Recommend the airline to a friend
BOOKING BEHAVIOURS
Travel agent
Airline’s web
Travel web
0%
1%
2.5%
Where do you go BEFORE you book a fl ight?
Airline’s web
Travel agent
Travel web
Phone
0%
81%
2.5%
14%
1%
Where do you actually book a fl ight?
list is not a CRM solution, since it doesn’t engage
customers, speaking at rather than corresponding with
them. But neither is simply having a Twitter account,
if the proper communications infrastructure is not
established to enable pertinent and useful information
to be exchanged in a timely fashion.
T e social era may be frightening for an industry that
has traditionally held fi rm control over marketing and
operations, but it has also given airlines the unique
opportunity to understand what drives customer
actions better than ever before. T is requires airlines
to prioritise social media engagement as a strategic
marketing priority, rather than the tactical afterthought
it often is today.
T e next time Tim Freyer is unhappy, and expresses
himself on Twitter, AAdvantage should be able to
address his concerns just as if he had called them up
on his priority line. All check-in agents, as well as the
Admirals Club receptionist would be aware of these
interactions, and be able to make up for any misgivings.
T at is the future of loyalty.
“The social era may be frightening for an industry that
has traditionally held firm control over marketing and operations,
but it has also given airlines the unique opportunity to
understand what drives customer actions better than ever before”
43%
45%
SOCIAL MEDIA
APEX4_54_60_SocialLoyalty_FINAL.indd 6 0APEX4_54_60_SocialLoyalty_FINAL.indd 60 18/10/2011 1 3:0418/10/2011 13:04
