Miles Ahead: 15 Years of AIR MILES in Canada Doug Dolan Viva Dolan Communications and Design Inc. Toronto, Ontario, Canada

Transcription

1 Miles Ahead: 15 Years of AIR MILES in Canada Doug Dolan Viva Dolan Communications and Design Inc. Toronto, Ontario, Canada NEED/OPPORTUNITY / The AIR MILES Reward Program is one of the great success stories in consumer marketing in Canada and worldwide. Launched in March 1992, it is a customer loyalty program built on the coalition model: Instead of being restricted to a single retailer, it is supported by an alliance of sponsor companies, all of which issue reward miles that can be redeemed for an array of products and services. Created by the founders of a pioneering U.K. program focused on airline travel, the Canadian AIR MILES program has been widely acclaimed and imitated as the first loyalty program that truly realized the potential of a coalition. Today nearly 70 percent of Canadian households are enrolled as AIR MILES collectors, earning reward miles on purchases from more than 100 brand-name retailers and service providers. The unique rewards currency is issued through thousands of retail locations, as well as via the airmilesshops.ca web site. Many of the program s nine million or so active collector accounts earn even more by shopping with branded AIR MILES credit cards from American Express or BMO Bank of Montreal Mosaik MasterCard. Once they ve tallied up enough reward miles, collectors can choose from among some 800 redemption possibilities from movie and amusement park passes to hotel stays, car rentals, home electronics, gift certificates and, of course, airline flights around the globe. As the AIR MILES Reward Program approached its 15th anniversary, there was a concern that its remarkable history might be fading from the coalition s collective memory. Key players at sponsor companies had moved on to other roles or retired; those who remained, while aware of the AIR MILES legacy, often didn t know all the nuances by which it had evolved. In an increasingly competitive loyalty marketplace, with many retailers looking at alternatives or considering homegrown programs, it was vital that the unique value and proven power of the AIR MILES model be clearly understood. The same need to document a decade and a half of rapid change was felt within the AIR MILES organization. The company had grown dramatically in recent years to nearly 1,300 employees. With such a high proportion of relative newcomers, it was essential that everyone understand the roots of the corporate culture and embrace the cumulative knowledge and wisdom of the many talented people who had helped make it a success. The decision was made to mark the 15th anniversary milestone by producing a book that would tell the story of the program s rapid rise from three young entrepreneurs in a hotel room trying to drum up business to a widely admired company that each year helps millions of Canadians collect billions of reward miles and redeem them for millions of rewards. At the same time, this book would include the perspectives of coalition sponsors, rewards suppliers and other stakeholders and, of course, individual collectors whose loyalty is the lifeblood of the program. In the spirit of the coalition, the book would reflect a community of voices and perspectives. And in the entrepreneurial spirit that still drives the program, it would have to happen very, very quickly: from first concept to a large-format, visually rich, 136-page book presented to key stakeholders at a high-profile launch in less than six months. 455

2 GOALS AND OBJECTIVES/INTENDED AUDIENCES / The AIR MILES anniversary book targeted a wide range of audiences, setting unique, albeit overlapping objectives for each: For existing coalition sponsors in the banking, automotive, grocery and other retail sectors, the goal was to showcase a unique enterprise and the role their organizations have played in making it a success. Senior executives, especially those who may not have been involved in the original decision to join the program, would be prompted to reflect on the measurable advantages of sponsorship. Moreover, the book would be an effective tool for reinforcing those advantages with colleagues. Prospective sponsors, particularly in sectors not yet represented in the AIR MILES program, would likewise see the benefits of membership i.e., improved sales, customer loyalty and insights into consumer behavior. Similarly, current and potential rewards partners, who provide services and merchandise to be redeemed by collectors, would see the program s value as an alternative sales channel. For current AIR MILES employees, the book would provide vital historical context and reinforce core values. It would also be a very effective orientation piece for new hires and a recruiting tool for prospective employees. At Alliance Data, the program s parent company, many were not familiar with the AIR MILES legacy particularly executives whose companies had joined the corporate fold more recently through acquisition. In reading about the loyalty coalition s origins and business successes, Alliance Data employees would gain a clearer grasp of its role in the overall organization and recognize opportunities for improved synergy and joint initiatives. Within the broader business community, the anniversary book would serve as a powerful calling card, providing context and establishing credibility with potential partners across Canada and the world. Finally, the book would be a valuable communication tool for enhancing the public profile of the AIR MILES program not directly to consumers, but through stories in the media, via industry associations, within the academic and consulting community, and in dealings with government and other regulatory authorities that take an interest in consumer marketing. SOLUTION OVERVIEW / The original concept for Miles Ahead: 15 Years of AIR MILES in Canada evolved in response to several factors: research into the history of the business; prioritizing of topics to be covered and individuals/organizations to be profiled; availability of key interviewees; format constraints determined by the design/production process; and, of course, budget. By mid-january 2007, when interviewing and writing began in earnest, the contents were mapped out largely as they appear in the finished book: A welcome from CEO Bryan Pearson sets the stage for the book and sounds several key themes for the future. 456

3 An opening section, The History, traces the dramatic growth of the AIR MILES program from its modest beginnings, through its highly successful launch and rapid growth, to its maturity as an industry leader. Focusing on the first half-dozen years, this section documents evolving efforts to improve collectors experience and expand the array of reward possibilities; to deepen sponsor relationships and develop new ones; and to gain insights into consumer behavior that can help sponsors market more strategically and in turn bring AIR MILES collectors attractive new offers. Also covered are the program s 1998 acquisition by Texas-based Alliance Data and the program s influence on other loyalty enterprises around the globe. A second major section, The Business, provides an overview of the program s day-to-day operations, from negotiations with rewards suppliers (such as airlines) to developing multi-sponsor promotional campaigns, from analyzing data to gain insights into consumer choices to helping collectors redeem reward miles for family vacations. This section also showcases the program s leadership role in safeguarding consumer privacy, as well as various corporate charitable initiatives. The book s third section, The Coalition, presents a series of stories showcasing some of the AIR MILES program s key sponsors and rewards partners. Based on in-depth interviews with CEOs and senior executives, these profiles were carefully chosen to reflect the overall coalition. Some, such as Safeway and BMO Bank of Montreal, were vital contributors to the original success of the program. Others are representative of geographical regions, retail sectors or specialized areas of the business for example, web-based retailers offering reward miles to online shoppers. In a final section, The Future, senior executives map out their vision of where the AIR MILES program is headed next. Highlights of recent initiatives show how the first 15 years of growth have created a foundation for future developments. Many other narrative elements add further dimensions to the book and help make a mass of information more digestible: Snapshots profile leading AIR MILES program executives, past and present, each with a keynote quote. Sidebars focus on related topics for example, the program s origins in the U.K. Brief résumés of interviewees are accompanied by fact sheets on their organizations. Perspective sidebars highlight expert commentators on loyalty marketing. Where Are They Now? features introduce notable AIR MILES alumni. Did You Know? boxes highlight interesting and amusing facts about the program. Collector s Notes display representative letters from reward miles collectors. Milestones historical highpoints punctuate the book chronologically. 457

4 IMPLEMENTATION AND CHALLENGES / The development and writing of Miles Ahead: 15 Years of AIR MILES in Canada involved a great many logistical, administrative, diplomatic and creative challenges. The project required close collaboration with the senior AIR MILES team to balance communication priorities, identify sensitive issues and articulate the company s future vision. An even greater challenge was one that lies at the heart of the loyalty coalition model: the need to balance sensitivities and competing interests among diverse organizations and individuals. AIR MILES sponsors are major players in their respective categories that have exclusivity in some regions but may compete in others. Likewise, some rewards partners may have rivals among other AIR MILES suppliers and/or relationships with other loyalty programs. Senior alumni may now work for corporations with alternative approaches to customer loyalty or may express points of view that differ from the current management perspective. Industry experts are concerned that they be perceived as independent commentators. Within the company, each team is naturally keen that its particular efforts be duly noted. And across the coalition there are the inevitably varied perspectives of high-profile organizations, each with its own history and approach to public communications. The need to get all of these factors in balance shaped the crafting of every page in the book. In addition, there were a great many project milestones to be identified and managed in a very short time span, including: Arranging and conducting more than 70 interviews with a diverse group of individuals: the program s founders, the current executive team and a broad sampling of employees; CEOs and senior executives of various sponsors and rewards partners; the chairman and senior executives of the program s U.S. parent; AIR MILES alumni in senior roles at other organizations; industry consultants with expertise in loyalty-based marketing; key players with programs in international markets; suppliers of direct marketing and distribution services; and the heads of charitable organizations supported by the AIR MILES program. Traveling to on-site interviews in Montreal, Calgary, Vancouver, and at various locations in and around Toronto. Arranging long-distance interviews in the U.S., the U.K., Germany, Mexico, New Zealand and elsewhere. Extensively researching the AIR MILES story and loyalty programs generally, including a thorough review of the company s comprehensive (uncatalogued) 15-year media archive. Researching 25 companies profiled in The Coalition section, preparing questions and thumbnail facts for each organization. Selecting and editing AIR MILES collector letters from across Canada and choosing the best representative examples. Writing all other features, captions, headlines, decks, pull-quotes, lists plus all copy editing and proofing through multiple rounds. In short, it was a demanding and sometimes tricky project that required more than 100 consecutive days 458

5 of research, writing, editing, multiple rounds of internal and external approvals, and a lot of eye-straining, hair-pulling editorial scrutiny. By some miracle (and a great team effort) it was delivered on time to the printer and launched at a gala event on 15 May MEASUREMENT/EVALUATION / Mitchell Merowitz, vice president, corporate affairs, with the AIR MILES Reward Program, offers his perspective. While a nonprofit initiative is difficult to measure (i.e., in the absence of sales figures), the success of the 15th anniversary book was gauged initially in relation to several benchmarks: Overall accuracy of reporting, particularly in both factual and anecdotal accounts of the program s history. Accurate reflection of the perceptions and positions of key stakeholders, past and current. Clear and transparent representation of the people who created and continue to contribute to the business. Candid points of view from collectors, sponsors and suppliers, reflecting both corporate and personal commitments to the coalition, delivered through the passionate storytelling of a third-party writer. And, finally, the book s success in providing current and potential stakeholders with a realistic sense of the organization s future. More specifically, the book was judged to be successful in meeting all of the objectives outlined for the target audiences. Existing coalition sponsors: The book provided the opportunity for representative sponsors to express and detail their own business cases for participating in the program, which had a positive impact on all coalition sponsors. Prospective sponsors, as well as current and prospective rewards partners: The book is used to demonstrate to potential program partners the successes of like-minded companies and to show, through third-party testimonials, the multiple ways companies can leverage the program to achieve growth-focused business goals. Employees, new hires and recruits: The book has been used extensively to educate current employees about the program s past, the organization s approach to business and people, and its future vision. It is also a foundation piece within the on-board program for new employees, ensuring everyone, regardless of department or level, gains a sense of history and immediate engagement. Alliance Data: The program s corporate parent now has an additional information vehicle to educate the market and other stakeholders about a key asset, including the program s brand and historical equity. 459

6 Broader public audiences: In communicating with the media, industry associations, the consulting community and the general business community, as well as government and other regulatory authorities, the book is used extensively as a platform to define what the AIR MILES Reward Program is and what it stands for. The direct feedback from both past and current stakeholders, as well as the number of requests for additional copies, is a testament to the success of the project. Moreover, the inclusion of Miles Ahead as a core communication vehicle for the company s new business development opportunities, as well as international outreach strategy, further underlines the importance of this project to the business, reputation and growth strategy. Finally, because the book is often cited as required reading by third-party analysts and commentators, it has quickly become a staple in any loyalty industry resource library. It is a primary source for any individual, academic or organization seeking to gain insight into one of Canada s most successful business initiatives, as well as the many similar and like-minded coalition loyalty programs it has inspired worldwide. 460