Presentation on theme: "DBTA Conference January 25, 2012 Loyalty in the travel and conference industry More for more or more for less January 25, 20121."— Presentation transcript:
DBTA Conference January 25, 2012 Loyalty in the travel and conference industry More for more or more for less January 25, 20121
More for more or more for less 1. Why is loyalty important from an airline perspective? 2. Do airlines experience mutual loyalty, and how has customer loyalty evolved? 3. What expectations/demands do airlines have on increased loyalty from customers – More4More 4. Common future focus on loyalty and partnership 5. Summary and Takeaways January 25, 20122
3 a.Capital-intensive industry with a long time perspective b.Increases predictability c.Strengthens innovation and development of the commercial platform d.Enhances cost and travel efficiency 1.Why is loyalty important from an airline perspective?
January 25, alternatives a.Commodity provider – price really the only competitive parameter b.Create genuine differentiation and customer loyalty, which requires: - high quality - an aggressive and innovative commercial agenda on the customers terms - harmonized and recognizable concept - differentiation and transparency that are perceived as genuine and significant by the customers The real cooperation and partnership between customers and airlines will decide choice of alternative. Airlines will fight for alternative b. 1.Why is loyalty important from an airline perspective?
January 25, Loyalty is based on: - clear and comprehensible information -insight and ability to exert influence -innovation -genuine and measurable benefits (proof that loyalty is worth it) And thus creates -product/service development -efficiency (costs, time) -minimization of Total Travel Costs 1.Why is loyalty important from an airline perspective?
January 25, The macroeconomic trend and intensified competition reduce loyalty a.Many customers still optimize according to Total Travel Costs b.Several customers have changed their travel policy to cheapest available on the day c.Contracted business is still an important part of airlines revenue – but is under pressure 2.Do airlines experience mutual loyalty, and how has customer loyalty evolved? 2.Do airlines experience mutual loyalty, and how has customer loyalty evolved?
January 25, Many customers have changed their travel policy to cheapest available on the day a.No strategic or long-term partnership – solely price on the day b.Lacking qualitative understanding of what cheapest price actually means – and at what cost c.Several agreements are established with different airlines – which weakens the negotiating position d.Increased uncertainty about who the actual decision-maker in the company is – the travel manager or purchasing department In addition, a negative trend is perceived regarding: a.Insufficient mandate to implement signed agreements b.Deficient costing analysis of airline agreements, which provides no guarantee that the chosen policy/strategy is commercially optimal 2.How has customer loyality evolved?
January 25, Practical case Travel policy – cheapest by destination A.Consequences - lose access to product and service features - lose flexibility and possibility of integration solution - increase employees travel times BResults - expenses rise by 15% - 20% (corresponding to a double- figure million amount) 2.How has customer loyality evolved?
January 25, Airlines focus regarding loyalty 1.Segment loyalty 2.Product/service loyalty 3.Geographic loyalty 4.Share of total wallet 5.Share of total segment 3. What expectations/demands do airlines have regarding increased customer loyalty – More4More
January 25, Future major differences between loyal and non-loyal customers 1.Price level 2.Combination of price and flexibility 3.Access to products/services on ground/on board 4.Tailored solutions 3. What expectations/demands do airlines have regarding increased customer loyalty – More4More
January 25, Moving higher up in customers value chain as strategic partner a.Other industries proved long ago that mutual loyalty and partnerships create significant mutual business advantages b.Moving from price-driven selling toward selling of solutions * capitalize on the technical platform in a bid to increase innovation and the option of individual services * continued development of Integrated Solutions throughout the travel chain * attractive commercial terms & conditions that flexibly balance expenses and buyer/flyer requirements 4.Common future focus on loyalty and partnership
January 25, Intensified focus from airline on predictable contracting 2.Airlines will implement the principle of More4More to a far greater extent 3.Airlines will enhance focus on selling of solutions at the expense of price-driven selling 4.Invitation from airlines to customers to increase loyalty and partnership: - capitalize on the technological platform - increase integrated solutions throughout the travel chain - attractive commercial terms & conditions – including reduction of complexity in the business model 5.Summary & Takeaways