How the mobile digital arena can help airline loyalty programmes

By 2017 more than 10% of the airline industry’s revenue will be generated via the mobile channel, this adds up to 70 billion dollars of revenue (Johnson, 2016). Airline loyalty programmes could be a big part of this if airlines choose to adapt and stay up to date with the newest technology. Rewards programmes should be made available on all mobile devices: from smartphones to smartwatches, to stay ahead of the competition.

The fact that global mobile sales are rising (in the UK the percentage of mobile sales went up by 57% in one year), means that companies are forced to offer their loyalty programmes on mobile devices. When mobile rewards programmes are offered, airline businesses will be able to acquire new customers and make sure the investments they made in their expensive loyalty databases will not go to waste. Setting up these mobile apps or websites also has the ‘stream of data’ as a benefit: airlines will be able to capture information like spending behavior, travel patterns and much more.

Airline customers will now also be able to access their membership platform wherever they are, which also makes the experience more personal. The apps will allow airlines to start targeting their customers at the right moment, when they need it. Ben Perkins, the head from consulting firm Deloitte, said that this is one of the biggest advantages, since consumers will react way better to this than coupons they receive at a random moment. The apps will also make it easier to engage with (potential) customers, since airlines will be able to offer other handy services like early check-ins and flight information. The rewards function of the app could even be presented like a secondary function of the app, to attract customers easier, according to the head of Capgemini Alex Smith-Bingham (Pritchard, 2015).

One example of an ‘early adaptor’ airline is United, who launched their MileagePlus X app two years ago. The app allowed their customers to pay directly for a range of products from a list of companies and collect bonus miles at the same time. It marked a new era for airline loyalty programmes, since before the app, these airline rewards were only offered through credit card or travel companies (Barris, 2015).

Despite this example and the promising benefits of airline loyalty programmes, the impacts are still limited right now. Airline loyalty apps have a great potential, but are not fully optimized yet and customers do not use them often enough to really make a difference. The only airline apps that are really popular are the ones that offer much needed services like mobile boarding passes and baggage options, apps that only offer promotional options will not gain that kind of popularity. Airline companies should look at implementing location and payment technologies to get to know their customers better. The head of Deloitte states that “the massive increase in mobile payments offers a real point of differentiation of mobile loyalty, you can make a promotion instant and context relevant, and not just based on previous purchasing behaviour.” (Pritchard, 2015)

Author: Eva Manrique

Barris. (December 2015). Mobile Rewards Will Buy Loyalty Airlines Discover. Retrieved on October 10, 2016 from http://www.mobilecommercedaily.com/mobile-rewards-will-buy-loyalty-airlines-discover

Johnson. (2016). Must Know Mobile Marketing Strategies For Airlines. Retrieved on October 10, 2016 from http://academy.pulsatehq.com/mobile-marketing-strategies-airlines

Pritchard. (September 2015). Loyalty Must Keep Pace With Mobile. Retrieved on October 10, 2016 from https://raconteur.uberflip.com/i/567377-customer-experience-loyalty

KLM and Social Listening: What Can Other Airlines Learn?

The rise of social media is both a blessing and a curse for companies. Customers are now able to share unlimited praise or devastating criticism via their social profiles, while also easily sharing these reviews with their entire network. Another thing customers now do is ask their questions, which used to go through customer support, via social media. When managed correctly, companies could improve their brand image dramatically.

58% of marketers in the United Kingdom said that brand image and customer satisfaction improved when their companies started engaging on social media in real time (Immediate Future, 2014). Social media engagement or ‘social listening’ means that companies monitor and analyse conversations involving the company on social channels, in order to understand what is being said about the brand, the industry and the competition. If companies opt for social listening they can show that they care about their customers and are willing to change their products (Griffith, 2016).

Monitoring comments and questions on social media is a standard procedure for most airlines, but there is one airline that takes to crown when it comes to social listening: KLM. The airline started focusing on social media engagement in 2009 after a volcano in Iceland erupted and almost 10 million travellers had to deal with delays or cancellations. The KLM call centers could not handle all the calls and e-mails anymore so the company made a very smart decision: they came up with a social media room, where KLM employees from every department (even CEO Peter Hartman) volunteered to answer questions on social media. After this event, and after realizing that it worked, KLM decided to stick with the social media room (ter Haar, 2015).

Apparently this was a good decision because last year SocialBakers called them the company with ‘the best social customer care in the world’. In 2014 KLM answered 80.000 questions and their response percentage was 98.5%. 40% of all questions asked on social media aimed at Dutch companies are for KLM, this is also 30% of all questions aimed at the global airline industry. Not only the response rate is high, the company also responds surprisingly quickly. The average response time of the KLM team is 1 hour and 35 minutes, while the global average of the airline industry is 4 hours and 22 minutes. On top of that the airline is able to answer questions 24/7 in 14 languages (McCulloch, 2015).

So, what has KLM learned over the past few years and what can other airlines adopt in their own social strategy?

  1. Be fast
    KLM noticed that their customers start to complain after waiting 20 minutes for an answer, while it is almost impossible for the company to respond to everyone immediately, they are trying to get their response time down to 30 minutes.
  2. Stay personal
    People respond best to answers that are not automated, they want a personal touch and the feeling that someone is actually putting effort in solving their problem(s).
  3. Stay on the same page
    When KLM customers ask questions like ‘Can I change my ticket for my upcoming flight to New York?’, KLM does not reply with a link to their terms and conditions but try to find out if is possible for that specific ticket. Do not make your customers leave the social media channel which they used to sent the question. (ter Haar, 2015).

The fact that the KLM takes the crown in social listening is already impressive, but the most impressive thing is that they seem to excel in customer support via every channel. It does not matter if a customer contacts them by email or phone, the response time and the quality of assistance will always be the same. A lot of airlines can learn from this!

Author: Eva Manrique

Sources:

  1. G. Griffith. (September 2016). Get To Know Customers Better By Monitoring Social Media Sentiment. Retrieved on October 2, 2016 from http://raconteur.net/business/get-to-know-customers-better-by-monitoring-social-media-sentimen
  2. G. ter Haar. (April 2015). What Has KLM Learned From 5 Years Of Social Media Service. Retrieved on October 2, 2016 from https://blog.klm.com/what-has-klm-learned-from-5-years-of-social-media-service/ 
  3. Immediate Future. (2014). In The Social Moment: Real-time Social Engagement. Retrieved on October 2, 2016 from  http://immediatefuture.co.uk/resource/in-the-social-moment-real-time-social-engagement/# 
  4.  A. McCulloch. (March, 2015). KLM: Putting Social Customer Care First. Retrieved on October 2, 2016 from https://www.socialbakers.com/blog/2374-klm-putting-social-customer-care-first

Mapping and valuing airline customers

Going on a trip starts by coming up with ideas for the destination, fantasizing about all the things you will experience during your travels. After you start searching for accommodation and transportation, deciding what to book and which company you want to spend your money on. This process is called ‘the customer journey’, they are all the steps a customer takes in building their relationship with a particular brand (DJS Research, 2012).

Especially for airline customers the complete experience of travelling by airplane matters as much as the final destination. Every touchpoint with the airline should be at least satisfactory, otherwise the chances of the customer returning are very small. 91% of customers who have a bad experience with an airline, in any step of the customer journey, will opt for another airline next time they are flying and no less than 12 positive experiences are needed to forget about a bad one.

Something that could help airlines improve these touchpoints is to adopt the customer journey mapping strategy. It helps to clarify what each individual customer expects at each touchpoint and what the fitting service or product is the airline could offer to fulfill these expectations. The idea of customer journey mapping is to focus on the responses customers have while reaching each touchpoint. To separate the customers, airlines should formulate personas. These personas should represent the primary groups of travelers who fly with the airline. After this has been established and the entire customer journey has been mapped, each customer should be treated differently based on their needs and wants.

By taking these steps airlines will also be able to determine the value of each persona to the company. They will probably discover that some groups bring more value than others, and that the value will also differentiate per touchpoint (Dent, n.d.). In the past businesses used to determine the value of each customer solely based on the transactions they made with their firm, but this is not sufficient anymore. Instead, a Customer’s Engagement Value (CEV) should be valued, this is essential to avoid over- or undervaluation of customers.

A customer’s CEV is comprised of four separate elements:

  1. Customer Lifetime Value (purchase behavior);
  2. Customer Referral Value (tendency to refer new clients);
  3. Customer Influencer Value (how does the customer influence other customers, current and future, by word of mouth etc.);
  4. Customer Knowledge Value (added value by providing feedback).

When CEV is implemented in the right way it can create a setting where customers are highly engaged with the airline, which will, in the long run, drive higher profits. CEV is a relatively new concept, but has already proven to build more efficient and effective marketing strategies to keep, gain and target customers. (Kumar et al, 2010)

Author: Eva Manrique

Sources:
Dent, J. (n.d.). Customer Journey Mapping: A Walk In Customer’s Shoes. Retrieved September 26, 2016 from http://www.ascendforairlines.com/sites/default/files/article_0.pdf
Kumar et al. 2010. Undervalued or Overvalued Customers: Capturing Total Customer Engagement Value. Retrieved September 26, 2016 from http://jsr.sagepub.com.proxy1.dom1.nhtv.nl/content/13/3/297.full.pdf+html
What is the Customer Journey? (n.d.). Retrieved September 26, 2016, from http://marketresearchworld.net/content/view/3684/78/

Social Seating: Customer Engagement Gone Too Far

pexels-photo-1Every frequent flyer knows how annoying other passengers can be, so being able to choose who you sit next to on your upcoming 12 hour flight might sound like a dream. But what if you had to share all your personal information in return? And what if that one annoying Facebook friend then asks to sit next to you, do you say ‘yes’ and hope for a normal conversation or do you say ‘no’ and maybe come across as rude?

A number of airlines have experimented, or are experimenting, with ‘social seating’, a concept that gives passengers the freedom to choose who they sit next to based on similar interests. The concept links to one of the five Principles of Engagement Marketing from Marketo (n.d.): engaging people based on what they do. This means that companies do not engage clients by their demographics, but by what they are actually interested in. There is no better way to find out what that is than to use their social media data and linking that to others.

Opinions on ‘social seating’ are divided, even some psychologists weighed in on the discussion. Pelle Guldborg Hansen, a Danish behavioural scientist, fears our society will become a victim of “a social colonisation of what used to be private.” A professor at the MIT School of Management, Lotte Bailyn takes it one step further and states that the concept of ‘social seating’ “makes us rigid and incapable of […] out-of-the-box thinking.”  Of course there also those who are completely on board with the idea. One of them is Nick Martin, the founder of a startup company called Planely, which strived to connect travelers with other travelers on the same flight. Nick said: “What people don’t like is meeting and talking to people they don’t have anything in common with. What they love is spending time with someone who is like-minded.”

Planely was founded in 2010, together with a few other companies that had the same goal. During that and the following year the media went crazy over the idea, but how many of us have actually used this option up until now? Planely, SeatID and Satisfly, three companies purely focused on social seating, either do not exist anymore or changed their business model. Not only those companies but also Malaysia Airlines, Iberia, AirBaltic and Finnair adopted and then abandoned the social seating concept in the last couple of years, travelers were simply not into it.

The only major airline that still offers this option is KLM. Their Meet & Seat service has been used by 65,000 passengers since its launch, and by 30,000 in 2014. This might sound like a big number, but it is nothing if you compare it to the 26 million travelers KLM carries per year (Moskvitch, 2016).

Author: Eva Manrique

SOURCES

  1. Marketo. (n.d.). The 5 Principles of Engagement Marketing. Retrieved September 18, 2016, from  
    https://www.marketo.com/ebooks/elements-of-engagement-marketing/

  2. Moskvitch, K. (2016, January 29). Now you can pick the perfect plane seatmate. Retrieved September 18, 2016, from http://www.bbc.com/future/story/20160128-now-you-can-pick-the-perfect-plane-seatmate