Revenue Management 101 for Loyalty Executives - Part Three

How can RM and loyalty use data to work closer together?

If you ever want to find out what information British Airways hold about you it is easily done – if you click here and select “view and manage my personal information” they will send you a nifty PDF of everything they know. I filled out the form and frankly I was a bit disappointed.

When the file arrived I saw that it listed the flights I had taken, my e-mail and my passport number. That was it. No detailed insights into when I booked, the channel I used, how I paid for my ticket, what I liked to eat and drink aboard the plane, whether I board first or last, my seat preferences or anything else you might imagine they capture.

I was surprised the insights were not available because I would have thought they could have been aligned through my Executive Club number. It seems that BA, like other airlines, are unable to evaluate their bookings and ticket sales in the context of loyalty data. This article, the third in a series about how revenue management (RM) and loyalty specialists can work effectively together, considers the data that both teams use.

This is the final article of three that I will be writing on this topic:

Click here for part one, explaining what loyalty and RM need to know about each other

Click here for part two, addressing how loyalty can get more seats from RM

Click here to see the webinar I did with AI Events inspiring the series

What data do RM use?

RM uses four types of data:

·      Historical revenue accounting data, covering all the tickets that were sold in the past and used to create a demand forecast about what will happen next year based on what happened in previous years

·      Advance booking and cancellation data, showing how many people are taking seats on flights and used to show whether or not history is likely to be repeated, so that forecasts can be adjusted and prices pushed up if demand is high and down if demand is low

·      “MIDT” (Market Information Data Tape) data showing how much demand is being captured by other airlines

·      Insights from the sales field covering things that will impact demand, like special events that will be held in a certain city and local school holidays.

What data do loyalty use?

Loyalty also uses four types of data:

·      All the flights taken by individuals, linked through their frequent flyer programme number, captured for the award of miles and status

·      An individual’s travel preferences for special meals and other services, captured to facilitate the order process

·      The mileage currency people have acquired and redeemed through flying and other means, their status in the programme and how it has changed over time

·      Insights into a consumer’s credit card spend shared by a co-branded card provider

How can RM and loyalty use data to work closer together?

There are many ways to combine the RM and loyalty data sets to generate revenue. Some of the quick wins include:

·      Offering more redemption seats at times in the booking cycle when people are less likely to book– if busines travellers tend to book between two and four weeks ahead for example, a redemption seat can safely be offered two months ahead provided it closes out when businesses start to get interested

·      Generating special fares for certain types of passenger designed to reward their loyalty with cash discounts rather than mileage redemptions – cheaper business class fares to holiday destinations for people who normally fly business for work but take their family on holiday in economy, distributed through a closed user group, are a good example

·      Capturing market share through loyalty incentives like miles-earning bonuses rather than cash incentives at times in the booking window when leisure travellers are making bookings, to preserve cash flow and avoid price wars with competitors

·      Offering status match and similar promotions only at times of the year when people who normally achieve status organically are less likely to be buying tickets.

Please get in touch if you would like any further insight into how these can be achieved.

oliver AT ransonpricing DOT com