Black Friday should be bonanza for travel, not only in the US

Research shows that many airline passengers are dissatisfied with the value their membership of airline loyalty programmes offers them.

So how can loyalty programme managers tap into global seasonal changes and events in order to drive increased redemption and shopping, thus boosting consumer goodwill?

NB: This is an analysis by James Berry, commercial product director at Collinson Latitude.

Not so many years ago, few people in Europe were familiar with the US concept of Black Friday – the Friday following Thanksgiving, which traditionally marks the start of the Christmas shopping season.

The reason behind the name is unclear: some suggest it is the day on which American retailers’ finances go “into the black”; others claim it is a reference to the traffic disruption and crowds of shoppers characteristic of city centres on the day after the holiday.

But whatever its derivation, one thing about Black Friday is certain: it shows as a significant spike on any chart of US loyalty programme redemption and spending patterns over the year, which is why it appears on the radar screen of loyalty programme managers.

Increasingly, though, that spike has begun to appear in programmes and member redemption patterns all round the world. The US phenomenon of Black Friday has, it appears, gone global – and so has its impact on airline passenger behaviour.

Black Friday is one of a number of seasonal events that have a marked influence on the rate at which millions of airline loyalty programme members redeem points they have accumulated.

Other key dates in the calendar include Christmas, unsurprisingly; Cyber Monday – the Monday after Thanksgiving; Father’s Day, Mother’s Day, Valentine’s Day – even Chinese New Year, which takes place in late January or early February.

Halloween is another on the list.

What it all means

All of these events have a quantifiable impact on loyalty programmes as airline programme members are prompted to see what their point balances can earn for them – be it free flights or consumer goods.

Our own data shows that in 2012, Black Friday and Cyber Monday triggered an uplift of 240% in spend by loyalty programme members across all categories in all markets.

But even this pales in comparison with the largest seasonal uplift we have experienced on our loyalty commerce platforms in the last two years: Father’s Day 2013, when sales in Asia rose by an unprecedented 3,600%.

With peaks of this magnitude, the seasonal factor is something loyalty programme managers have to take very seriously.

It is an effect that is not solely limited to specific dates: prolonged periods of sunny weather in regions of the world also work their magic on programme members.

The long days of the Nordic summer not only drive Scandinavians to paint their houses at 2am, they send them online to redeem sports and outdoor equipment. Dry, sunny summers in the normally rain-soaked UK have a similar effect.

The key for managers of travel loyalty commerce platforms is not just to be able to spot these blips; it is to be able to anticipate the customer behaviour that creates them and then utilise this behaviour for the benefit of the programme.

The fact is that seasonal factors influence e-commerce consumer behaviour and earn/redeem patterns mirror these. At these times of year, customers are looking to see what value they can extract from their programme membership.

Seasonal factors, therefore, create an opportunity to engage with programme members and encourage them to shop around themed campaigns based on tactical product selections.

Making it all practical

The purpose of a loyalty programme is, as the name makes clear, to engender loyalty. But a significant body of research, including studies conducted by Collinson Latitude, shows that many airline programme members are unable or unwilling to redeem accumulated loyalty currencies.

Narrow inventories and unattainable redemption levels leave members feeling dissatisfied and frustrated. Research we conducted showed that four-out-of-ten UK residents who collect air miles have never tried to redeem them while six-out-of-ten complain it takes too long to collect sufficient points to gain anything of value.

Loyalty schemes, it seems, have the capacity to produce entirely the opposite effect to the one intended.

Additionally, large balances of unspent points create accounting difficulties for airlines, who fall foul of accounting regulations.

So, the logic goes, if customers can be helped to redeem, then the degree of loyalty produced will increase and the accounting issues diminish – and this is where these major seasonal events fit into the picture.

During the run-up to a seasonal event such as Halloween or Black Friday, a good airline programme manager can fine tune the inventory of flights, goods and services available to programme members with the objective of encouraging redemption.

Another option available to programme mangers is the ability to send out emails to programme members containing marketing messages spotlighting specific products and services.

By identifying these seasonal redemption blips and then adjusting inventories and marketing messages ahead of them, the potential to generate a managed increase in redemption levels –above that which would be produced by the date in isolation – is perfectly feasible.

What makes this tactical marketing activity more significant is that opportunities to deploy it are growing. As mentioned early, the web has transformed Black Friday from a US-specific event to a global one: it has become a major international e-commerce event.

This means that redemption patterns across the world can be influenced by savvy programme managers, thus multiplying the desired effect many fold.

Getting it all right

The more attuned to customer behaviour a programme manager is, the greater the value that programme manager can add to the scheme by developing promotional tactics around these key dates.

Fundamentally, it is about tapping into e-commerce best practice and applying its lessons to these seasonal behaviours.

Rather than thinking about a loyalty programme in isolation, the real value is to be gained by understanding how people behave around these dates and responding accordingly.

Many programmes undersell the opportunity to maximise value for their members at a time when customers are minded to redeem and shop.

For a loyalty programme manager, the primary objectives are satisfied programme owners and satisfied programme members.

Intelligent marketing and inventory management focussed on key seasonal events and even weather patterns can have a significant role in achieving these objectives as globalisation and technology increase the connectivity between continents.

The stage is set for programme managers to take a more proactive role in the process of redemption.

NB: This is an analysis by James Berry, commercial product director at Collinson Latitude.

NB2: Black Friday airplane image via Shutterstock.

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About the Writer :: Viewpoints

A founding principle of tnooz was a diversity of viewpoints from across the spectrum. Viewpoints are articles by guest contributors from around the travel and hospitality industries. The views expressed are those of the author. and do not necessarily reflect those of the author's employer, or tnooz and its partners.



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