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Volume 7 Issue 1 | April 2012

Who’s following who?

America’s next top LCC? Revenue revamped Norwegian supersizes Belly bonus Loyalty Social security

Airlines are looking to social media to drive loyalty, but they need clearly defi ned social strategies to keep up with the fast-changing attitudes of today’s traveller, discovers Keith Mwanalushi

he social media evolution is creating that rewards customers with loyalty ‘TrueBlue’ will automatically deliver virtual badges and a buzz, judging by the large turnout points and special discounts. JetBlue kicked credit TrueBlue points without the need to T of attendees at the Loyalty 2012 off the programme with an offer for 25 download a separate mobile application. conference in Berlin in February. Participants TrueBlue points for each check-in made The airline indicates that unlike many apps, represented airlines from every corner via Facebook at an official JetBlue airport Go Places allows JetBlue customers to earn of the globe, including Germanwings, location. Customers who tag a friend they are rewards because it is directly tied to the Westjet, GOL and Air Uganda. The main travelling with unlock a special badge. TrueBlue loyalty programme. topics of discussion were the strategies Dave Canty, director of loyalty marketing While the JetBlue approach indicates that can be implemented to ensure loyalty at JetBlue, believes that in a world of real that social initiatives can work alongside a programmes are dynamic, fit-for-purpose time, there is greater need to engage more traditional frequent flyer programme and competitive. with customers on social platforms. “As (FFP), there is a need to be cautious, warns Increasingly, airlines are finding ways to far as fusing Facebook or any other social Ravindra Bhagwanani, managing director at drive loyalty through social media. JetBlue platform with earning and redemption Global Flight, the co-organiser of the Loyalty was one of the first airlines to harness the of TrueBlue points, our approach is on a 2012 conference. power of social interaction when it joined tactical and opportunistic basis. There may “Provided an airline has a holistic customer Twitter in May 2007. The airline now has be opportunities through partnerships for relations management approach, both can some 1.67 million followers on its account, more platform-based programmes, but as co-exist. With such an approach, social media followed closely by Southwest Airlines with the space is continually evolving, we like to can be seen as an additional communication around 1.21 million followers. be nimble enough to evoke and execute channel, which may be preferred by certain For just over a year, JetBlue has been with it,” he says. customer groups, including frequent flyers. running a social media loyalty programme Additionally, passengers can simply However, such considerations called ‘Go Places’ using Facebook. It was the check in with their mobile phone using the must always recognise first location-based social media application Facebook mobile application, and Go Places the realities.”

JetBlue was one of the first airlines to enter the social media space when it joined Twitter in 2007. It now has 1.67 million followers (photo: JetBlue)

16 Low Cost & Regional Airline Business www.lowcostandregional.com − April 2012

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Estonian Air’s social loyalty programme rewards customers and followers for being good online advocates or brand ambassadors (photo: Bombardier)

Bhagwanani refers to a recent poll 2011 the programme was awarded the ‘Best when, where they came from, and conducted by WebFlyer, an online resource Social Media Campaign’ prize at a recent measures the audience (friends and for frequent flyers, that showed that only loyalty and ancillary revenue conference in followers) and their interconnections – 4.3% of all complaints filed by customers Florida. The Tallinn-based carrier came out providing a wealth of information to were made through social media channels. on top, beating airline loyalty powerhouse the airlines. “Social media might not always be as relevant Southwest Airlines. The problem with airlines using to some frequent flyers as might be expected, “These awards confirm that Estonian Air’s Facebook and Twitter, notes Johnny Miller, considering, by definition, that they are the investment in social media prioritisation developer of the Bamboo technology, is airline’s most profitable customers. has proven correct,” said Gunnar Magi, that they never see any kind of return on “That’s why I would not go as far as saying marketing and development manager, investment from their marketing efforts. that social media changes the management Estonian Air. “Social media allows marketing Miller believes that airlines can monetise of FFPs. It might influence it, but anything efficiency and wide reach. It will continue to their social media activities. With Bamboo, else would overstate the realities – and that be the airline’s channel of choice for future airlines reach untapped audiences to is how it should be. There is no competition route launches and campaign distribution.” sell products and services, thus generating between social media and FFPs. They should So how are carriers such as Estonian a new incremental revenue stream while rather go hand in hand,” adds Bhagwanani. Air thriving on these social media sites? continuing to engage and drive sales Estonian Air is a good example. The The answer is quite simple – new social from their existing fan base. “This is why When conditions are at their worst, airline has a social loyalty programme called technologies have emerged. Estonian AirScore is beating airlines all over the AirScore, aimed at a particular demographic, for example, uses the Bamboo Social world,” Miller said. you’re at your best. but also gives the option for its more Rewards Platform. traditional EuroBonus FFP. AirScore is unique In its simplest form, Bamboo is a game in © 2012 Rockwell Collins. All rights reserved. in that it changes the idea of current loyalty which a company’s fans, or ambassadors, programmes by rewarding customers and earn and redeem points for creating more fans for being strong online advocates or awareness about them. Leveraging these How do you complete the next flight safely, even in rapidly changing conditions? At Rockwell Collins, ‘brand ambassadors’. core fans allows them to share all kinds of AirScore is a Facebook application that interactive messages with their friends on it starts by putting the vital information pilots need – Synthetic Vision, windshear, Traffic and Collision enables these brand ambassadors to earn Facebook and Twitter. The content ranges Avoidance System alerts and more – right in front of their eyes. Increased situational awareness and bonus points without having to fly. The from wall posts, invites, virtual gifts and bonus points earned can then be used when coupons, to real-time alerts, interactive operational benefits that allow for a better response to even the worst conditions. Resulting in fewer buying Estonian Air tickets or redeemed polls, videos, product information and the for prizes. Additional points are earned for latest news. delayed or cancelled flights. For more information, contact Rockwell Collins at +1 319.295.4085 sharing flight-related facts with friends. Bamboo records and measures every or visit our website at www.rockwellcollins.com. AirScore had more than 1.34 million wall impression, hit, visit, page view, click path, Canty: tactical and opportunistic (photo: JetBlue) posts in its first 10 days, and in November lead and sale. Equally, it records who did it,

18 Low Cost & Regional Airline Business www.lowcostandregional.com − April 2012

RC_HUD_LowCostRockwell_placed.indd Reg 1 Air Bus_April2012.indd 1 2/24/1228/02/2012 11:16 08:57 AM Loyalty

There is potential in utilising social media, but how that fits or will fit with frequent flyers is still too early to call. From a service aspect there are opportunities “ to enhance and add to communication channels Mustafa Ozalcin, Hitit ”

Whether social initiatives have a clearly number of active Twitter users that you defined strategy that is profit-oriented, follow, the sheer number of tweets that you Ozalcin: the jury’s out (photo: Hitit) rather than just publicity-focused, remains receive in an hour is tantamount to spam to be seen. Mustafa Ozalcin, director for to be honest, and after a point you just stop marketing and sales at Hitit, says the reading,” observes Ozalcin. industry is still defining such strategies. He believes that gaming platforms, such as nevertheless actively engages with the “Things are still very much in the testing those used by Estonian Air, are the connectors airline through social media. “There is an and evolution stage. There is potential in that will make social loyalty profitable for interesting potential to be exploited here utilising social media, but how that fits or will airlines, by providing opportunities for and only a few airlines have really started to fit with frequent flyers is still too early to call. reducing point liability on the balance sheet, look into that. There is something to think From a service aspect there are opportunities and generating revenue through the sale about here,” says Bhagwanani. to enhance and add to communication of points and benefits to members within a Ozalcin agrees: “This I think is the crux channels with members, particularly via gaming environment online. of the problem, and for loyalty system Twitter, and airlines like JetBlue make very Bhagwanani sees that some airlines providers like us, it creates a wealth of good use of this. But in terms of generating are attempting to monetise their social opportunity. There is no reason I can think of, revenues, which is a fundamental aim of activities, but as with any kind of activity apart from system constraints, why airlines loyalty programmes, I think the jury is still out.” aimed at the public, this contribution is cannot offer a choice of programmes to their Obviously Facebook and Twitter are hard to measure. “I don’t think that airlines members, with differing rules and benefits, being used to advertise promotions and should ultimately try to sell tickets through at the point of enrolment, if not afterwards.” campaigns, but Ozalcin notes that it’s social media channels or generate any The majority of airlines currently offer debatable whether these channels are other significant revenue from it, but they a one-size-fits-all programme, where the the relevant ‘places’ to do this from a should use it to sharpen their profile and to key differentiator is obviously the status marketing perspective. “Even though users improve their image in the market.” level. “That in itself takes time to acquire, voluntarily choose to ‘like’ particular pages, Bhagwanani adds that the closure of if at all,” comments Ozalcin. He adds that thus receiving updates from those airlines, Spanair demonstrates that there seems to social media platforms such as Facebook or messages can certainly be missed and lost be no correlation between creativity in the gaming platforms provide a new dimension, among numerous friend updates. social media arena and the financial success allowing loyalty programme members “From a Twitter aspect, this is even worse. of an airline. “It’s very unlike FFPs, where the different ways to gain value and enjoyment Unless you are a well-known celebrity, most profitable airlines tend to also have from their points and miles, irrespective of you will be following far more people than strong FFPs.” their tier status or account balance. will be following you. Depending on the JetBlue’s Canty states that the airline has “Airlines should look to offer a choice of not approached its social initiatives from a programmes to members and allow the profit-oriented or publicity mindset. “We have individual member to select the one which always approached these channels from a befits their own lifestyle,” says Ozalcin. customer service and informative perspective. We believe you have to earn your right to be respected in the space. Of course you I don’t think that airlines can monetise the channels, if those are the channels your customers are active in, but if should ultimately try you lose sight of the reason your customer to sell tickets through engaged with you the first time, then you may “ social media channels… see your followers drop or fans disengage.” It seems the biggest shift for airlines but they should use it to when building a social loyalty programme sharpen their profile Bhagwanani: social media potential is how to balance rewards for the traditional Ravindra Bhagwanani, Global Flight (photo: Global Flight) frequent flyer and the non-customer, who ”

20 Low Cost & Regional Airline Business www.lowcostandregional.com − April 2012