Thursday, December 27, 2007

Insider - Trading Frequent Flyer Points

Pssst, wanna trade frequent flyer miles?


Posted December 20, 2007 at 4:09 pm ET by Tim Winship


Most
(all?) frequent flyers feel they should be able to do whatever they
wish with their airline miles. "Sell them, give them away, barter them,
trade them—whatever, I earned them so they're mine to do with as
I choose." That's the prevailing attitude.



The airlines feel very differently, and have formalized their
objections to the free exchange of miles, explicitly prohibiting the
sale, purchase, or barter of miles in their program rules.


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Of course the airlines do permit miles to be bought and sold under
very specific circumstances, particularly when the transactions are
under the control of the airlines, at prices of their choosing, and
with revenues ultimately ending up in their coffers.



So most airlines operate nice, and nicely profitable, side
businesses, selling significant quantities of miles for around three
cents each. In the great majority of cases, those transactions are
handled by Points.com, which has developed the shopping cart software
widely used by airlines to handle mileage sales.



Always on the lookout for new ways to work the mileage exchange angle, Points.com has launched the beta version of its Global Points Exchange
(GPX), allowing Points.com members to trade miles and points of
participating programs. So far, the list of participating programs is
limited to American, Aeroplan, Alaska, Frontier, and Icelandair. But
more airlines, and hotel chains as well, will almost certainly elect to
participate in the future.



The exchange facilitates the trading of miles. So, for example, an
AAdvantage member might need 5,000 miles to top off her account, and
also have miles in an inactive Alaska Mileage Plan account. She could
offer to trade 5,000 Alaska miles for 5,000 American miles. And someone
else, in need of Alaska miles and with an excess of American miles,
might agree to the terms of the trade.



Members are free to propose any exchange rate they choose, but for
airline miles, trades are likely to be one-for-one, at least initially.
Members can either post a trade request, specifying what type of miles
they want to give and receive, or browse the offers of other would-be
traders.



Naturally, trading miles is not free. Traders pay a fee comprised of
two parts, a $6.95 "processing fee" for Points.com, which is waived for
the time being, plus trading fees imposed by the airline program. To
trade American AAdvantage miles, for example, the trading fees would be
$80 for between 1,000 and 5,000 miles, $130 for 6,000 - 10,000 miles,
and $180 for 11,000 - 15,000 miles.



It's a nifty idea, but one that is undermined by a weak value
proposition. As is the case with purchasing miles from the airlines,
the fees are too high to justify the flexibility and convenience,
except perhaps in emergencies and when very small quantities of miles
are involved.



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FlyerGuide.com (FFP Wiki)

http://flyerguide.com/wiki/index.php/Main_Page

FlyerGuide is the ultimate resource for those who travel A LOT, or who would like to travel A LOT. Created and continually updated by frequent travelers, FlyerGuide is a collaborative effort where all are invited to share what they know about making travel more comfortable, relaxing and rewarding.


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Cool Cartoons on Frequent Flyer

Funnies

Frequent Flyer Funnies - Frequent Flyer Insurance


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Web Flyer... good help for frequent flyers



Frequent Flyer Funnies - Taxing MilesPowered by ScribeFire.

Economics of Loyalty

Licensing loyalty


Started as a way to keep passengers coming back again and again,
airline loyalty programs have grown into significant cash generators.


Airlines make money off
the programs by selling miles to other companies that want to offer
these miles as a marketing lure. Netflix Inc. (NFLX:
Netflix, Inc, for instance, advertises that new customers earn 1,500 miles for use in
Delta's SkyMiles program when they sign up for the video-rental
service. Netflix pays Delta for those miles; in return, Delta makes a
certain number of seats available for frequent-flier use.


The cash value of these
miles likely is 1 to 2 cents a mile, according to Henry Harteveldt,
Forrester Research airline analyst.


Particularly attractive
to investors are the high margins. One reason for these margins is that
some passengers never redeem their miles -- about 17% in Aeroplan's
case.


That means some of the
mileage sold to third parties are 100% profit. If a passenger does use
those miles to take a flight, the carrier makes a profit on the
difference between what it earned from selling the miles and the price
of a ticket for that seat -- if it were able to sell one.


Aeroplan, for instance,
sells miles to Air Canada, credit card companies and retailers for
about 1.17 Canadian cents each a mile. When customers redeem them, that
costs Aeroplan around 89 Canadian cents a mile.


That cash generation
also makes the units attractive for their airline parents, which
increase cash flow as they sell miles to marketers. In general, most of
a carrier's frequent-flier miles go to third parties rather than as
rewards to customers.


Plus, the programs
provide the carrier with an incentive program to make sure its most
loyal customers come back for more. Losing the ability to manage those
customer relationships is a big risk for carriers considering
separating their loyalty programs.


"The best customer for
American Airlines may not necessarily be the best customer for the
frequent-flier company," said Tom Horton, AMR's chief financial officer.


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Loyalty Spin-off

Wednesday, December 26, 2007

Eight Ways to Build Customer Loyalty, Retention and Referrals

By David Taylor
Dental Economics


12/13/07 4:00 AM PT

CRM News: Customer Retention: Eight Ways to Build Customer Loyalty, Retention and Referrals


Lesson 1: Early Bonding Buys Boo-Boos



Did you know that a new customer can withstand up to eight negative
interactions with a business, as long as he or she has one positive
interaction first? Now, we recommend not going for the eight negative
interactions.


However, when prospective patients call for the first time, visit
for the first time, and receive your first follow-up calls, are you
doing anything special to really bond with them and turn the
interaction extremely positive in their minds?



Lesson 2: One Size Does Not Fit All


Customers are delighted -- and loyal -- when we understand and
respond to their specific needs. The same things are not important to
all patients. Some personality types value relationships and want to
feel deeply appreciated and known on a personal level. Some are very
business focused, and just want the bottom line in terms of cost and
time; others value comfort and avoiding pain and nothing else really
matters. Still others value dialogue and want to be consulted as a peer
in their care and have everything explained to them.


How long does it take you to learn each patient's specific needs -
and how many gaffes are team members committing in the meantime? Can
you survey or interview new patients during their very first visit to
find out what makes them tick?



Lesson 3: You Must Convey Value


Customers continue to exchange their money for products or services
as long as they feel they're receiving sufficient value. What is your
practice's unique value proposition? A value proposition answers the
following questions:


  • What are my patients really "buying" from me?
  • Why are they buying it from me and not from someone else?

In answering these questions, push yourself. The answers are not
always apparent or simple. Once your value proposition is internalized
by team members, you must convey (communicate) that value to patients
at every opportunity.



Lesson 4: Communicate Effectively


Customers love communication, as long as it comes in the format they
like, is brief, and contains information they want. Sounds simple,
right? So, how are you communicating with your patients? How are you
educating them? Do you know the type of communication they want and do
you provide the information they're looking for? Do you provide various
ways for them to communicate with you -- including valuable feedback on
your services?


Even if you consider yourself a "people person," effective two-way
communication isn't easy, but you can learn it with the right tools.



Lesson 5: Know Why Customers Leave


Successful businesses know why customers leave, and they work hard
to understand -- and fix -- the problems in their organizations,
systems, products and services that are causing those departures. Did
you know that the main reason patients change practices is the attitude
or indifference of the staff or doctor? What are you doing to address
that problem in your practice?


As you work hard to gather -- and listen to -- patient feedback (and
ex-patient feedback), look at your systems and processes to determine
the root cause of the problem. Fix the root cause and they will stop
leaving you for that reason.



Lesson 6: Measure!


If you want something to improve, measure it. If you want loyalty,
retention, and referrals to increase, measure them. What should you
measure? Consider the following metrics:


  • The number of patients in your database who you see at least once a year
  • Patient recall success percentages
  • The number of new patients who found you because they were referred by someone
  • The number of patients seen per month as a percentage of total active patients in the database
  • Patient satisfaction ratings gathered via surveys. You are doing surveys, right?




Lesson 7: Ask for Referrals



At the right moment during patient visits, are you asking for
referrals? Are you offering an incentive or reward to existing patients
for referrals that result in new patients, or are you leaving it up to
them to just refer on their own?


Sure, you'll have to prompt them a little. Ask them if they know
anyone who is new to the area, or anyone who isn't completely happy
with their oral health, or if anyone they know has said, "Gosh, I wish
my teeth looked like yours!"



Lesson 8: It's a Team Sport



Great companies realize that customer loyalty, retention and referrals are the responsibility of every team member.


If one person lets down, the company suffers. Have you unified your
team around the goals of loyalty, retention, and referrals? Do you
reward your team around the goals of loyalty, retention, and referrals?
Are you carefully selecting the right team members and removing the
wrong team members?


Hear that? Opportunity is knocking!




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Oracle CRM Strategy VP Mike Betzer boolish on Loyalty in 2008

What can we expect to see from Oracle next year, in terms of CRM that is?

.... Also, loyalty is another focus area
for us. Up until recently most in the industry have gotten loyalty
wrong -- they think of it only as a marketing E-Mail Marketing Software - Free Trial. Click Here.
campaign. But it is not so one dimensional -- you have to leverage
sales and service as well, just like the airlines have done with their
loyalty campaigns. Airline miles, in fact, is one of the greatest
loyalty campaign examples of all time. We want to apply those lessons
in other areas now.


Read full interview:
CRM News: Trends: Oracle VP Mike Betzer: The Mainstream Is Waking Up to CRM

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CRM Buyer!!! One stop shop for CRM system buyers

CRM Buyer

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FrequentFlyer.com one stop shop for Airline Loylaty

Welcome to FrequentFlier.com - the Internet's premier site for frequent flyer program information and advice.MilePort
Home News & Analysis Strategic & Tactics FrequentFlier Forum Programs Airport Links About the Site

Take a tour!

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Tuesday, December 25, 2007

Know your Fare Class / Travel Classbetter

Fare class


Within each travel class there are often different fare classes, relating to ticket or reservation restrictions and used to enhance opportunities for price discrimination.
Passengers within the same travel class receive the same quality of
accommodation and may indeed sit next to each other; however, the price
or restrictions they face for that accommodation will vary depending on
the fare class. Fare classes may also vary by how far ahead the ticket
must be purchased, or how long the length of stay is. For example, full
fare economy class passengers (booking code Y) are usually able to make
changes to their reservation, while discount economy class passengers
in the lowest booking code usually have tickets that are
non-refundable, non-upgradeable, non-transferable, or non-changeable
without a hefty fee.


Airline fare classes are commonly indicated by letter codes, but the
exact hierarchy and terms of these booking codes vary greatly from
carrier to carrier.



First class codes


  • F, A, P, R

On domestic flights, F commonly indicates first class on a two-cabin
plane. If a three-cabin aircraft is used, P (for "premium") may be used
to distinguish the higher level of service in first class. The R code
indicated
supersonic transport and was no longer used after the retirement of the Concorde, however with the introduction of the new Airbus A380, Singapore Airlines
has re-introduced the R class to distinguish their "Singapore First
Suites" as a higher class than regular First Class. The A and Z codes
may indicate a first class ticket whose fare is reduced due to
restrictions on refunds, advance reservation requirements, or other
terms.


The codes in short:


  • F = Full-Fare First Class
  • P = First Class
  • A = First Class Discounted
  • R = First Class Suites (currently only Singapore Airlines), and formerly Supersonic (Concorde),

  • (a lowercase "n" after any class code indicates Night Service)


Business class codes


  • C, J, D, I, Z

On many airlines, C or J indicate full fare business class, whereas
discounted and thus restricted and typically non-upgradeable fares are
represented by I or Z.


The codes in short:


  • C, J, D = Full-fare Business Class,
  • I, Z = Business Class Discounted,
  • (a lowercase "n" after any class code indicates Night Service)


Economy class codes


  • Full fare: Y, B
  • Standard fare: M, H, N
  • Special or discount fares: G, I, K, L, Q, R, S, T, U, V, W, X

On most airlines, unrestricted economy ticket is booked as a Y fare.
Full fare tickets with restrictions on travel dates, refunds, or
advance reservations are commonly classed as B, H, or M, although some
airlines may use S, W, or others. Heavily discounted fares, commonly T
or W, will not permit cabin upgrades, refunds, or reservation changes,
may restrict
frequent flyer program
eligibility, and/or impose other restrictions. Other fare codes such as
X are restricted for use by consolidators, group charters, or travel
industry professionals.


Most low-cost carriers have greatly simplified the fare classes they
use to a handful of cases, unlike the dozens employed by a traditional
airline. While some traditional carriers have followed, others continue
to prefer price discrimination over commoditization.


The codes in short:


  • B = Economy/Coach Discounted
  • E = Shuttle Service (No reservation allowed), or Economy/Coach Discounted
  • G = Conditional Reservation
  • H = Economy/Coach Discounted
  • K = Economy/Coach Discounted
  • L = Economy/Coach Discounted
  • M = Economy/Coach Discounted
  • N = Economy/Coach Discounted
  • Q = Economy/Coach Discounted
  • R = Economy/Coach Heavily discounted
  • S = Economy/Coach
  • T = Economy/Coach Discounted, or Premium
  • U = Shuttle Service (No res. needed/Seat guaranteed)
  • V = Economy/Coach Discounted
  • W = Economy/Coach Premium
  • Y = Economy/Coach
  • (a lowercase "n" after any class code indicates Night Service)

Travel class - Wikipedia, the free encyclopedia

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Sunday, December 23, 2007

Loyalty Program Effectiveness

Innovation and creativity are among the key factors that define a successful customer loyalty program, particularly in the retail sector.

The primary objective of the retailer is to keep the high-potential customer from straying by offering a loyalty program that is unique and exciting. That said, some underlying elements set apart the world’s most successful retail loyalty programs from the also-rans.

  • Clear and specific objectives
  • Thorough research and analysis
  • The feel-good factor
  • Smart rewards
  • Technology
  • Data mining
  • Ongoing communication
  • Organizational commitment

Read the detailed article here

7 points to ponder about Retail Loyalty


Retail Loyalty Programs: seven points to ponderDirect Marketing News

1. The shape shifter :



Lawrence of Arabia didn't always ride a camel!


Customer knowledge is the single most powerful pay-off of a Loyalty
program. There's a load of analytical approaches beyond RFM for
retailers wishing to leverage customer knowledge. Not all of these
appear to be easy to adopt and marketers shun analytics more out of a
lack of understanding of what it can do for them. Get the experts in,
listen to them – you'll find that there's ROI in it for you.


2. The Painter



To paint yourself into the Customer's picture, you need a strong concept


Building a loyalty program concept requires not just sound strategic
thinking, but loads of rigor. The success lies in being able to detail
out solutions to over 100 decision points that a loyalty program
concept needs to cover. You cannot be reacting to situations as they
happen!


3. The Magician :



Loyalty programs are more than a Card trick!


The loyalty card is the most familiar face of a loyalty program.
There are many options here from Mag Stripe to RFID, stand alone to
coalition, but the key point is that launching a card does not a
loyalty program make. This space is littered with failed programs that
were launched as a card and little else.


4. The Neuromancer :



Technology and marketing need to work together for success


The software on which your program depends needs to be designed
carefully, and should handle all aspects of your program. Retail POS
solutions often offer a basic loyalty module – these are usually
inadequate! The point: Don't design your program to fit the software.


5. The Band :



The Band needs to work together, and needs superhuman skills


The team that drives the program internally needs to be composed of
skills that are difficult to find in any market. Direct marketing, CRM
and Loyalty skills need to be nurtured and the team needs top
management support. Importantly, you will need to rely on the right
partners to come in with specific skills.


6. The Campaigner :



Good campaign management yields results


Campaign management practices are better established amongst the
banks than retailers, but here is where the real pay-off is. Leverage
campaign management tools as they will allow you to run hundreds of
targeted campaigns which really do pay off, as compared to a few
festival offers and generic promotions.


7. The Timekeeper :



The payoff comes with patience


Set expectations right. To launch a program AND expect a jump in
sales within 6 months is pushing it. Building up a quality member base
(no mass enrolments), setting up the back end, campaign management
– these all take time and effort, and the metrics to measure
success take time to show the returns.




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Good Articles on Loyalty Marketing






































1. Loyalty programmes have far reaching consequences - make ... 28-November-2007
2. Direct marketing opportunities for the Indian travel industry 29-October-2007
3. Retail Loyalty Programs: seven points to ponder 26-September-2007
4. Acquisitions & Retention – the two sides of the same coin 26-September-2007
5. Rewards planning for channel loyalty programs 27-August-2007
6. Three things that will impact Direct Marketing by 2010 25-July-2007
7. What do the world's best retail loyalty programs have... 05-June-2007
8. Pain points in a loyalty program design 05-June-2007
9. Are you into the 5th Generation of Loyalty Programs? 05-June-2007

Retail Loyalty: 57% shoppers globally are influenced by Loyalty Cards

UK shoppers are also less influenced by deals offered to loyalty card
holders. This was cited as a major factor by just 42%, against 57%
globally.

Source: http://www.talkingretail.com/news/7806/UK-shoppers-will-travel-furthe.ehtml


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Friday, December 21, 2007

Using Loyalty Cards in Retail Customer Understanding

How Do I Count Thee? Let Me Love the Ways


A July 2007 online survey of 180 senior retail executives reveals
that 40 percent of businesses surveyed use purchase history tracked by
using loyalty cards as their primary source of customer understanding.
Other primary listening mechanisms:



Loyalty Marketing, Reward Programs and Customer Loyalty: COLLOQUY

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Thursday, December 20, 2007

Trading Customer Loyalty (Business of Points Exchange)

Article by: Yogendra Joshi

About the article: I am writing this article to catch some trends in "Points Trading" business and its overall effect on Customer Loyalty for the participating programs...

homeTrade on GPX


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Wednesday, December 19, 2007

Loyalty in Services Indusry... Are customers loyal to the Firm or its employees ?

Here is a typical example from the customized-personalized service market:

A woman who goes to a hair salon may describe herself as very loyal to that salon. But if her stylist leaves, she'll immediately switch to the new salon. Her loyalty was to the individual, not the company.

Companies often confuse loyalty to their employees with loyalty to the firm. So while they invest in increasing the Loyalty they need to be careful that the same loyal customer is not taken-away by your leaving staff to your competitor along with the "same loyalty"

read to Original Post by Harvey Schachter: Defining customer loyalty

Nova + : Loyalty Solutions by Pine Labs

Monday, December 17, 2007

Customer Loyalty 2.0, Articles by Bob E. Haye: Good Read

Here are 3 great articles by Bob E. Hayes on Customer Loyalty in the current world
Useful stuff copied from these articles:

Whats Customer Loyalty 2.0?

While the quality of the customer loyalty survey process has seen a
great deal of improvement in business settings, the quality of the
measurement and meaning of customer loyalty has not kept pace. Our
latest research on customer loyalty, however, tries to narrow this gap.
Customer Loyalty 2.0 represents this advancement in the measurement and meaning of customer loyalty.

Objective measures of customer loyalty:
  • Number of referrals:
  • Word of mouth/Word of mouse
  • Purchase again
  • Purchase different products
  • Increase purchase size
  • Customer retention/defection rates
Commonly used customer loyalty survey questions include the following items:
  • Overall satisfaction
  • Likelihood to choose again for the first time
  • Likelihood to recommend
  • Likelihood to continue purchasing same products/services
  • Likelihood to purchase different products/services
  • Likelihood to increase frequency of purchasing
  • Likelihood to switch to a different provider
Key Factors to consider for loyalty scores:
1) Satisfaction
2) Recommendation
3) Purchase again

Loyalty Indices
  • Advocacy Loyalty Index (ALI): The ALI measures the extent to which customers are advocates of the company. This index is calculated by averaging the responses to the following questions: Overall Satisfaction, Choose Again, Recommend, Purchase Same.
  • Purchasing Loyalty Index (PLI): The PLI measures the extent to which customers are likely to increase their purchasing behavior. This index is calculated by averaging the responses to the following questions: Purchase Different, Purchase Increase, Purchase Frequency (only for PC Study).
  • Defection Loyalty Index: The DLI measures the degree to which customers are likely to defect. This index is the score from the single item: Likelihood to switch to another provider.


Aeroplan to acquire Nectar : Deal Complete!!

Aeroplan to acquire Nectar Program Operator, LMG,to create the global leader in loyalty management

+
Aeroplan Income Fund "Aeroplan" (TSX: AER.UN), Canada's premier loyalty
marketing company, announced on December 3, 2007 that it has entered into a
definitive agreement to acquire privately-held LMG for a purchase price
of £350 million (Cdn$717.5 million) plus working capital
adjustments of £18 million (Cdn$36.9 million) for total
consideration of £368 million (Cdn$754.4 million).

The purchase
price is subject to a holdback in the amount of £31.6 million
(Cdn$64.8 million), the future payment of which is subject to the
outcome of the company's outstanding Value Added Tax (VAT) litigation.
This transaction is expected to close by the end of the year. LMG is
being acquired from Sir Keith Mills (Chairman of LMG), global private
equity investor Warburg Pincus and the management team.

For more, read this

In a recent news, its announced that the deal is completed.. Read more

Good Article: Do low-cost carriers have low-class mileage programs?

Do low-cost carriers have low-class mileage programs?

Very Good Article by Tim Winship on
smartertravel.com

Here is the last para of conclusion.. but would suggest to read the original article too :)

Overall, programs like American's are significantly more generous and
more flexible than programs like Southwest's. So while LCCs have
one-upped the mainline carriers on several fronts, in the area of
frequent flyer programs, the legacy airlines have managed to maintain a
competitive advantage over their lower-cost rivals.



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Priority Club gets ‘Program of the Year’ award

PRIORITY CLUB
Priority Club® Rewards was voted ‘Program of the Year’ for the 2nd year in a row!

With over 439,000 frequent travelers voting for their favorite rewards
programs, the Freddie Awards are the most prestigious
consumer-generated awards in the industry. For the second consecutive
year, Priority Club Rewards was named ‘Program of the Year’! In
addition, Priority Club Rewards was also awarded top honors with
Freddie Awards in the following categories:

Arrow
Best Web Site
Make your reservation online now and you’ll see why we won
Arrow
Best Bonus Promotion
Check out our current hotel and partner offers
Arrow
Best Member Communications
To receive our latest news and offers, be sure your profile is up to date



Global Traveler


Priority Club Rewards has been named the "Best Hotel Rewards Program In The World"
for the second year in a row by Global Traveler magazine. More than
13,000 Global Traveler readers recognized Priority Club Rewards for its
ease-of-use and out-of-the-box approach to loyalty, including having
the widest variety of redemption options, offering the fastest way to
Elite Status, and giving members the ability to redeem points at any
hotel in the world, regardless of affiliation.