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
Product
Unbundling
Baggage fees
Seat / room selection
Booking fees
Product
Enhancement
WiFi
Lounge access
Priority security
Extended check-out
Repackage /
Re-bundle
Entertainment package
Business traveller package
Luxury package
Customer
focused
initiatives

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
47 airlines
€15.11 billion
($21.46 billion)
Results posted by
47 airlines
€10.95 billion
($13.47 billion)
Results posted by
35 airlines
€7.68 billion
($10.25 billion)
Results posted by
23 airlines
€1.72 billion
($2.45 billion)

13. Top five reporting ancillary revenue
Airline
Ancillary revenue
(Euros)
Reporting ancillary
revenues
United Continental
€3,530,000,000
Not known due to recent
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 $
$510 mio.
46 mio.
$8.250 mio.
278 mio.
13 mio.
20 mio.
$100 mio. $325 mio.
43 mio.
$150 mio.
Total Members of Frequent Flyer
Programmes (FFPs)
N
W
N
E
S
W
© ICLP Research 2010
Total Annual Revenues generated by FFPs
through the sale of miles
(estimate)
E
S
© ICLP Research 2010

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

24. Benefits of “rewarding” your customer
Increased VALUE
of loyalty currency
Reduced
LIABILITY
Redemption
Stronger
AWARENESS
of program
Additional
ENGAGEMENT
with 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 accrual (revenues)
Points Swinger
8,000
Points Shepherd
Golden
Moment
X 1.5
6,000
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
Year 1 Accrual Pace
(miles earned)
Points Shepherd
Year 2
(avg. miles earned)
1-20.000
4.505
4.095
X1.1
20-40.000
24.292
17.597
X1.4
40.000+
54.147
46.909
X1.2
Accrued
10-38%
more miles
in Y2

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
o
Redemption – more choice, incl. points + cash
Real time offers
Airline and hotel Sees:
•
FFP / FGP
Core
Product
•
Opportunity to engage customers, even
when they are not booking with your
brand
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 have a choice of
cash or points to
purchase with”
“I want to earn
or redeem on a
transaction –
let me decide”
“I got real
value out of that
engagement – I
won”

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

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

37. Some examples...

38. Asia Miles and Velocity

39. In summary
Relevance
Choice
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