The 60-minute session will give attendees a better understand of how using data more effectively can build on customer loyalty through positive interaction and engagement. Panelists are: Janet Titterton, Collinson Latitude, business planning director Alexander Meili, ICLP, European planning director James Berry, The Collinson Group, director product and planning Moderator: Kevin May, Tnooz editor and co-founder

1. Ancillary services or customer loyalty:
where should the focus be?
20 October 2011

2. Kevin May,
Editor

3. Poll no. 1

4. Ancillary services or customer loyalty :
where should the focus be?
The following is intended to outline our general product direction and is intended for information purposes only.
The development, release, and timing of any features described for Latitude’s products remains at the sole discretion of Latitude.

5. Janet Titterton
Business Planning Director
Collinson Latitude

6. Ancillary services or customer loyalty : where should the focus be?
Webinar content overview:
1. Next generation ancillary revenue
2. FFP / FGP - ‘The Golden Moment’
3. Driving program engagement

7. Ancillary services or customer loyalty
– where should the focus be?

8. Poll no. 2

9. The evolution of ancillary revenues
Ancillary revenues have transformed the Airline and
Hotel industries
Type Sample Products
Baggage fees
Product
Seat / room selection
Unbundling Booking fees
WiFi
Product Lounge access
Enhancement Priority security Customer
Extended check-out focused
initiatives
Entertainment package
Repackage /
Business traveller package
Re-bundle Luxury package

10. Next generation ancillary revenues:
a renewed emphasis on the
customer

11. What is value creation? How can brands add value?
Adding value around the core product – through best
practise e-commerce (up-selling, cross-selling) and
memberships
FFP / FGP
Core
Product
Core

12. How do FFP’s/FGP’s fit into ancillary revenue reporting?
Reporting of Ancillary Revenues not standardised:
Annual Financial Disclosures of Ancillary Revenue - 2010
2010 2009 2008 2007
Results posted by Results posted by Results posted by Results posted by
47 airlines 47 airlines 35 airlines 23 airlines
€15.11 billion €10.95 billion €7.68 billion €1.72 billion
($21.46 billion) ($13.47 billion) ($10.25 billion) ($2.45 billion)

13. Top five reporting ancillary revenue
Ancillary revenue Reporting ancillary
Airline
(Euros) revenues
Not known due to recent
United Continental €3,530,000,000
merger
Delta €2,612,200,000 Other revenue
American €1,379,524,000 Other revenue
Qantas €1,087,268,000 Separate business
US Airways €834,492,000 Not known

14. Some examples...

15. BMI & Air Canada

16. United Airlines & Jetstar

17. Premier Inn & IHG

18. HotelTonight

19. Trainline – web loyalty

20. Alexander Meili
European Planning Director - ICLP

21. Poll no. 3

22. The strongest ancillary revenue driver: FFPs
9.3
billion $
46 mio. $510 mio.
278 mio. $8.250 mio.
13 mio. 43 mio. $100 mio. $325 mio.
20 mio. $150 mio.
Total Members of Frequent Flyer Total Annual Revenues generated by FFPs
Programmes (FFPs) through the sale of miles
N N
(estimate)
W E W E
S S
© ICLP Research 2010 © ICLP Research 2010

23. Is there still room for growth?
Yes, but…..
The challenge: The answer:
“I can’t get my rewards” Redemption is
“My miles are not King
worth anything”

24. Benefits of “rewarding” your customer
Increased VALUE
of loyalty currency
Additional
Reduced Redemption ENGAGEMENT
LIABILITY
with program
Stronger
AWARENESS
of program

25. ‘The Golden Moment’
A simple principle
Members are not fully
engaged with a loyalty
program until they have
redeemed their points or
miles – at least once and
after a reasonable short
period of time
(7-15 months)!

26. The Golden Moment – or - Who is the better client?
Points Swinger Points Shepherd
Golden
Points accrual (revenues)
8,000
Moment
6,000 X 1.5
4,000
2,000
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Months

27. Case study
Points Swinger
‘Golden
Moment’
11 months Points Shepherd
Year 1 Accrual Pace Year 2
(miles earned) (avg. miles earned)
Accrued
1-20.000 4.505 4.095 X1.1
10-38%
X1.4
more miles
20-40.000 24.292 17.597
in Y2
40.000+ 54.147 46.909 X1.2

28. Similar Logic: American Express Membership Rewards
“Ease of redemption is critical to the perceived value of
rewards. This is a nice addition to the American Express
program”
Colloquy Awards Jury – September 2011

29. Consequently, actions to best leverage
the power of the Golden Moment…

30. James Berry
Director, Product and Planning
The Collinson Group

31. Poll no. 4

32. What is value creation? How can brands add value?
o Redemption – more choice, incl. points + cash
o Real time offers
Airline and hotel Sees:
• Opportunity to engage customers, even
when they are not booking with your
FFP / FGP brand
Core
Product
• Makes proposition clearer / easier to sell
Core
Customer Sees:
• “This brand knows me and has everything
I need”
• “This is helping me get better value from
the loyalty points currency”

33. Convergence of travel, retail, technology
Travel
Technology Retail

34. Loyalty points as a valuable currency
“I want to earn
“I have a choice of or redeem on a
cash or points to transaction –
purchase with” let me decide”
“I got real
value out of that
engagement – I
won”

35. o Connected when I need it
o Relevance and choice
o Aspirational
o Fun and interactive
o Global and local

36. Technology enabling multiple touch points
Mobile /
tablet Online
On
board
Global /
Cross-
In the border
airport
At In store
check-in

37. Some examples...

38. Asia Miles and Velocity

39. In summary
Choice Relevance
Value
Creation
Connected

40. Q&A

41. Thank You!
Archive copy of today’s webinar will appear on
www.tnooz.com within a few days
Send questions and comments to Kevin May,
kevin@tnooz.com