FFP Product Suite Helping Your Frequent Flyer Program Soar Sandra Diem, Vice President, Global Business Development Travel Evert de Boer, General Manager, Global Business Development Travel
1 / FFP Product Suite HELPING YOUR FREQUENT FLYER PROGRAM SOAR Aimia has developed a suite of 20 frequent flyer program (FFP) products designed around articulating your value proposition and improving the performance of your loyalty program. Each addresses a particular question or challenge relevant to today s business environment, including: > How can we engage non-frequent flyers? > What is the optimal point for breakage? > How can we improve the results from our partnerships? > What is the best way to price rewards? > How should we allocate award availability? > How do I construct a transfer pricing agreement with the airline? > Does it make sense to separate the program from the airline? > How do I calculate the value of the program? > What is the profit of the program and how do I maximize it? > What is the best miles expiry policy? > What elite qualification structure best recognizes high-value members?
FFP Product Suite / 2 four key categories of products member performance Rewards performance Partners performance program performance member performance Partners performance 1 Program Design and Refreshment 11 FFP Market Assessment 2 Member Segmentation and Analytics 12 Partner Optimization 3 Offer and Campaign Management program performance 4 Web Analytics Roadmap 13 Liability Management Health Check 5 Social Segmentation 14 Macro-Level Breakage Rewards performance 15 Micro-Level Breakage 6 Airline Reward Cost Analysis 16 Program Health Check and Benchmarking 7 Reward Transfer Pricing 17 Standalone Opportunity Assessment 8 Reward Pricing Optimization 18 Financial Performance Optimizer 9 Non-Air Reward Strategy 19 FFP Financial Reporting 10 Reward Display and Optimization 20 Employee Incentive Toolkit
3 / FFP Product Suite Member performance 1 2 3 4 5 PROGRAM DESIGN AND REFRESHMENT Whether you need a blueprint for a new frequent flyer program (FFP), or guidance in restructuring an existing program, Aimia can help airline management understand the demands of a contemporary FFP, devise an effective design, and manage the implementation. As part of our process, we evaluate and quantify different scenarios, including various types of accrual and redemption mechanisms. By building your business case around Aimia s economic model, you ll be sure to meet all stakeholder requirements. Our vast experience in FFP design and optimization will help programs launch faster, achieve greater returns, and avoid common pitfalls. MEMBER SEGMENTATION AND ANALYTICS Using data-driven insights to craft member experiences has become every smart marketer s goal. Aimia s sophisticated data models, which incorporate best practice analytic techniques from other industries, offer new insights into frequent flyer program members. Our data-driven recommendations facilitate your ability to maximize revenue by deploying tailored acquisition, migration, and retention strategies. We combine deep airline industry knowledge with leading-edge models to give marketers an edge in customer insight. OFFER AND CAMPAIGN MANAGEMENT Designing, executing, and measuring multiple campaigns can be a daunting task. Aimia has significant experience in designing and executing campaign management strategies, both for our coalition programs and on behalf of our clients. We ll assess your frequent flyer program s current performance, identify areas for improvement, and provide ready-to-implement recommendations that lift your bottom line and improve channel effectiveness. In addition, we can devise, implement, and manage a turnkey, end-to-end campaign management solution. Web Analytics Roadmap The abundance of web data coming from both the airline and the frequent flyer program makes getting the right insights in a timely fashion a complex task. Aimia s Web Analytics Roadmap helps you decipher and leverage existing web data to improve the user experience and conversion rates. We ll help you deliver positive outcomes, such as higher booking engine redemption rates and increased click-through rates. We ll work closely with your FFP and airline teams to develop and test tactics that offer your customers a coherent experience across all digital channels. Social Segmentation The rapid rise of social media has changed the face of customer interactions. Aimia s Social Segmentation module helps you craft a social media strategy based on a member segmentation structure that supports both airline and program objectives. Our social strategy encompasses both the active and reactive elements of your customer service and marketing initiatives that support your frequent flyer program objectives.
FFP Product Suite / 4 Rewards performance 6 7 Airline Reward Cost Analysis You bear the cost of every reward seat delivered through your frequent flyer program but every award seat can represent a different cost. Obtaining the appropriate consensus on reward seat cost is a key requirement of any successful FFP. Aimia s Airline Reward Cost Analysis methodology determines the actual cost of reward travel and can be used for purposes as varied as transfer pricing and recalibrating your rewards grid. By reviewing detailed inputs such as reward seat cost by route and month to establish the displacement component, we can help you generate an accurate cost analysis. Reward Transfer Pricing A comprehensive transfer pricing agreement lays the foundation for a long-term, sustainable relationship between the airline and the frequent flyer program. Aimia s Reward Transfer Pricing module helps you identify the main components and the underlying relationships for these agreements. Our guidance helps you structure a range of considerations, such as accrual and redemption elements. Access to inventory, pricing controls, and your decision-making process all play an important role. Our methodology incorporates inventory issues, pricing controls and your decision-making processes. 8 9 10 Reward Pricing Optimization Pricing participant rewards correctly is key to your program s profitability. Aimia s Reward Pricing Optimization module establishes the relationship between essential variables such as burn volumes, unit cost, and rewards issued. The resulting model allows you to set an optimized reward grid by charging the right price for any reward, thereby creating enhanced margin opportunities. The model s output helps you improve attainability, member engagement, and redemption growth. Non-Air Reward Strategy During the last few years, merchandise and experiential rewards have taken wing. Aimia s Non-Air Rewards Strategy module helps you design a non-flight-based reward strategy, including reward portfolio management, pricing, and communications. Our extensive customer analytics help you build the right non-air portfolio, backed by a performance measurement dashboard designed to help you analyze and optimize your rewards structure. Reward Display and Optimization Optimizing the display of reward travel search results may seem trivial, but it s a key component of the member experience. Aimia s Reward Display and Optimization module creates results in tangible improvement to reward display logic, including increased member satisfaction and lower unit costs. The approach integrates smoothly with your web content engine to fine-tune the user experience within your program website s booking functions. Partners performance 11 12 FFP Market Assessment Entering a new market, or enhancing your program s performance in an existing one, requires a deep understanding of market conditions. Aimia s FFP Market Assessment module uncovers key findings, reveals hidden implications, recommends both short- and long-term strategy, and provides sizing estimates all of which are filtered through the lens of our loyalty expertise. We ll help you review and evaluate loyalty market opportunities that give you a valuable edge in frequent flyer program development and rollout. Partner Optimization Frequent flyers are earning an increasing number of miles through non-travel partners which means that maintaining and optimizing partner relations has become critical to program success. Aimia s Partner Optimization module evaluates your current partners against their contribution to program value, and delivers insight to help you better leverage them to build member engagement. By analyzing member behavior, we ll help you quantify incremental partner value and uncover new partner opportunities.
5 / FFP Product Suite Program performance 13 14 15 16 17 18 19 20 Liability Management Health Check For many programs, outstanding miles liability represents the single largest financial metric on the books. Aimia s Liability Management Health Check provides you with a high-level assessment of your program s liability management performance. We ll help you identify strengths and weaknesses in your breakage methodology, and identify macro-member dynamics that exert a material impact on your program s strategic direction and profitability. Macro-Level Breakage Unredeemed miles can eventually turn into breakage. Aimia s Macro-Level Breakage module uses a variety of methodologies to establish your breakage rate, as well as help you identify the main drivers of breakage. Our experts will guide you on managing your breakage rate and long-term program profitability. You can even estimate the impact of planned program changes on breakage, as well as on key program elements such as margins, engagement, competitiveness, and value proposition. Micro-Level Breakage Understanding individual member behavior enhances your ability to articulate the right member strategy. This module zooms in on individual member behavior by focusing on more granular data than the macro-level module. This focus allows you to use liability management as a lever to assess and manage performance of highly dynamic member segments, partners, or business units. Program Health Check and Benchmarking Third-party validation of your program s performance offers valuable insights that help you garner support for investment. Aimia uses a range of proprietary metrics to assess your program s performance, as well as provide actionable advice on short-term program improvements. The health check reviews all major program components, including accrual and redemption, your partner network, your system infrastructure, and your data analytics capabilities. Standalone Opportunity Assessment Separating a frequent flyer program from its parent airline can help unlock tremendous program value. Aimia s Standalone Opportunity Assessment provides an arm s length validation of this strategy, including a valuation of the future company. We provide a detailed business case that outlines the economic rationale for or against pursuing a standalone strategy. If a spinoff seems right for your program, we ll provide a roadmap toward a standalone state that outlines necessary changes. Our unmatched experience in FFP separation provides you with unique insight into the strategic possibilities. Financial Performance Optimizer Many frequent flyer programs double as airline profit centers, which attract considerable attention from shareholders and management. Aimia s Financial Performance Optimizer module helps you assess and enhance your program s financial performance. You ll receive a long-term profit and loss forecast, including a what-if analysis. Our deep knowledge of FFPs guides you to the business levers necessary to achieve maximum program profitability. FFP Financial Reporting A standalone frequent flyer program has different reporting requirements from a legacy FFP. Aimia s FFP Financial Reporting module provides practical guidance on how to structure reporting for a standalone FFP. In addition, we ll recommend key financial and non-financial performance indicators. Having spearheaded the first FFP spinoff in 2005 with the Aeroplan program, we re uniquely positioned as the leaders in this field. Employee Incentive Toolkit Aimia can help you turn your frequent flyer program employees into your biggest asset. We ll design a tailor-made solution that recognizes and rewards employees for their contributions to the program s success. We ll help you develop a customized reward catalog that incorporates an effective incentive structure unique to your employees and corporate culture. We ll even guide you along the migration and implementation path
FFP Product Suite / 6 for more information contact: Sandra Diem, Vice President, Global Business Development Travel Sandra Diem leads Aimia s Global Business Development for travel. She has more than 25 years of experience developing travel loyalty programs. She began working for Aimia more than 15 years ago starting at Air Canada, as part of the small program team that created Aeroplan in 2005. During that time Sandra was a major contributor to the first commercial agreements between Aeroplan and Air Canada, in addition to starting Aeroplan s CRM, Rewards Management and Member Management departments. She has worked with many airlines around the world and has been a speaker at airline loyalty program conferences. She also led Aimia s investment in the Club Premier program in 2010. Sandra holds a Bachelor of Environmental Studies degree from the University of Waterloo and an MBA from the University of Western Ontario (Ivey School of Business). +1 514.205.7492, Sandra.Diem@aimia.com Evert de Boer, General Manager, Global Business Development Travel Evert de Boer supports Aimia s global business development efforts in travel. Having worked on both the client and agency side, and across industry verticals, Evert enjoys a unique view of the challenges airlines face today. Evert has more than 12 years of extensive experience in airline loyalty programs. After crossing from the airline client side to agency side in 2002, he continued to work on airline CRM solutions for a wide range of clients. He started his career at KLM Royal Dutch Airlines in the Netherlands. Evert has been a guest speaker at numerous events and institutions, including Cranfield s School of Aeronautics (United Kingdom) and Toulouse ESC s Aviation MBA (France). He has published a number of articles on frequent flyer programs and travel loyalty. His most recent article, on 30 years of frequent flyer programs, appeared in the June 2012 edition of the Journal of Air Transport Management. Evert earned a Master of Science degree in International Business Administration at the University of Maastricht, the Netherlands and Universidad Carlos III de Madrid, Spain. He is a graduate of the Berkeley-Nanyang Advanced Management Program from the Haas School of Business at University of California at Berkeley, and Nanyang Business School at Nanyang Technological University, Singapore. +1 514.205.6322, Evert.DeBoer@aimia.com About Aimia We are a global leader in loyalty management. Our unique capabilities include proven expertise in building proprietary loyalty strategies, launching and managing coalition loyalty programs, creating value through loyalty analytics, and driving innovation in the emerging digital and mobile spaces. We build and run loyalty programs for ourselves and for some of the world s best brands. Customer data is at the heart of everything we do. We are Aimia. We inspire customer loyalty. Visit us at aimia.com/airlineloyalty.
7 / FFP Product Suite YOUR BUSINESS RESULTS DELIVERED OUR INSIGHT aimia.com