You are on page 1of 35

Driving Consumer Engagement

Paul Smitton Group General Manager Loyalty Marketing

ADMA Forum June 2008

Presentation Topics
1. 2. 3. 4. 5. Background Our Approach Key Learnings Our Future Summary

1. Background

FFP Industry • • • • • Began in 1981 with American Airlines 120 million people enrolled* Over 14 trillion miles accumulated* Valued at more than US$700 billion* High perceived value of points v’s cash * Source: Economist magazine. ‘Funny Money’ Dec 2005 .

000 new members every business day – High penetration of top income households More than 1 in 10 seats flown on Qantas are Award seats 350+ partners • • .Qantas Frequent Flyer • • Launched over 20 years ago – Objective: drive customer retention Largest active member base in Australia – 5 million+ members – 1.

Member DNA Total Male 58% Female 42% .

more often with partners than non-members * Source: Economist magazine.Qantas Frequent Flyers are Australia’s most valuable customers • Qantas Frequent Flyer members buy more. ‘Funny Money’ Dec 2005 .

350+ Earn Partners .

350+ Earn Partners .

travel packages and car hire Telecommunica tions Hotels Health insurance Car purchasing Alcohol Household goods & services Personal care Housing Clothing Miscellaneous Food Transport Leisure Health Miscellaneous Personal care .35% of Consumer Spend 19% 17% 16% 12% 11% 4% footware 4% 5% 2% 9% Other Meat and Fish products Petrol 80% Power Other health services Household services Tobacco Medications Car insurance 60% Rates Food and non-alcoholic beverages Car servicing and consumables 40% Mortgage Household furnshings Other recreation goods and services Clothing 20% Rent Restaurants and other meals Air fares.

Our Approach .2.

Building Customer Advocacy • • • • High behaviourally loyal base Emotional loyalty – the holy grail Positive word of mouth: when experience exceeds expectation Personalised communication .

Better Targeting .

Printed • Up to monthly (depending on tiers) .Statements .

online • 2.7 million Frequent Flyers opted in for online statements .Statements .

5 million Frequent Flyer’s Opened by 40 to 50% Click throughs 15 – 25% Unsubscribes <0.eDM • • • • • Monthly Frequent Flyer eNewsletter Sent monthly to 1.05% .

qantas.com • • One of Australia’s most popular websites Over 5 million visitors per month .

Printed • • Sent to Tier Frequent Flyer’s quarterly 160.Frequent Flyer Newsletter .000 members .

Direct Mail • • A popular channel with Partners Excellent cut-through for well targeted communications .

Driving Positive Behaviours Business Requirement Acquisition Device Retention Device Cash Flow Improvement Staff Incentives Staff Recognition Increase Overall Sales Feature Product Focus Customer Proposition Examples Become a customer and earn 5.000 points Top sales performer per month receives 10.000 points Sales over xxx receive additional 5.000 points On every account anniversary receive 1.000 points in appreciation Pay account within 7 days and receive additional 1.000 points Purchase/sell more than $x and receive 5.000 points .000 points Buy/sell 2 or more of x product and receive 5.

KPI Driven Organisation .

3. Key Learnings .

QFFP plays a significant role in increasing Qantas margins 1 Key driver of Qantas yield premium1 % responses My preferred airline Most convenient time/ routing Cheapest 1 Responses to ‘What justifies Qantas’ price premium?’ Source: Upgrades Survey (n=483). Eureka Strategic Research .

Share Shift with Qantas Frequent Flyer Points Source: Qantas Research June 07 .

Share Shift in Practise Partner A loses Ansett relationship 40% Partner A engages in heavy price discounting Partner A joins Qantas ends price discounting Partner A •Market Share Partner B 20% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Source: Qantas in-house data-mining .

LAX (Average QFF Member) 113 100 Non-affiliated bank program 91 80 Years 60 5 times faster 40 15 3 0 Discount economy Business First 6 9 20 Source: Qantas in-house research .Members benefit through a coalition of partnerships 13 times faster 120 QFF Loyalty redemption Years to earn SYD .

Our Future .4.

Jetstar and Qantas Store) .The Model Program Members (customers) Qantas Frequent Flyer (market place) Participating Companies (point issuing) Reward Providers (Qantas.

Great Rewards .

Currency as Enabler .

Coming Enhancements • • 3 million+ reward seats today – Classic remains cornerstone of proposition More options tomorrow – new Qantas and Jetstar Any Seat Awards – Greatly improved online store – Points + pay introduced • Better rewards = more member engagement = more earn options .

Relaunch Campaign .

Summary .5.

Preferred by Members and Partners • • • • • • • High perceived value of a Qantas Frequent Flyer point Large range of point earning Great rewards Simplicity of one loyalty account Targeted communications = relevancy The best incentive for partners Qantas Frequent Flyer is the only loyalty program a customer needs .

Thank You .