The revenue connection between mobile booking and loyalty
Two factors make the mobile channel unique during travel: intimacy and necessity.
For many passengers, a smartphone or mobile device is often their primary connection to the rest of the world as they travel - immediately available for online searches, communication, notifications, last-minute information and status updates about what's happening.
For travel companies, the mobile channel is the most intimate and flexible way to interact with today's customers and passengers, and in some countries, it is becoming the primary channel for those interactions. Sixty percent of 2017 gross travel bookings in China will be made on mobile devices, according to Phocuswright, and mobile-first commerce growth is occurring in India, Scandinavia and elsewhere.
Smartphones and other mobile devices can serve as powerful channels for building customer loyalty, whether through delivering the exact information a passenger needs at the exact minute he/she needs it, or by delivering a personalized offer at just the right time for just the right purpose.
From information provided at sign-up and through ongoing interactions with a frequent-flyer or loyalty program, carriers are able to fine-tune and personalize the loyalty experience in the mobile channel. They can also capture revenues throughout the passenger journey – predicting, planning, booking, checking in, boarding, on board, at the destination and post-trip. Through loyalty offerings, airlines can convert "lookers into bookers" – and then convert the bookers into loyal customers.
Reshape travel loyalty programs for mobile commerce and revenues
Here's another statistic: 71 percent of travelers would like to book flights and hotel rooms on their smartphones. Given that the bar has already been raised, carriers can re-think loyalty and frequent flyer miles from a mobile point of view.
- Build loyalty around mobile, not vice versa:It's time to turn loyalty strategies on their head. Loyalty programs should be built for the mobile ecosystem (not adapted to it), allowing airlines to phase out a host of legacy loyalty patterns and practices, such as plastic membership cards. New members can enter and be authenticated into loyalty programs from the mobile channel first. Embedding loyalty into the mobile device also makes transactions, sales and interactions intimate, seamless and satisfying.
- Personalize the mobile experience:Create mobile apps that work for program members. Loyalty program apps should store members' program details, contact information, preferences, travel habits, and purchase and behavioral histories. For members, the app should be a tangible sign that the airline exists to serve, and not just to sell.
- Invest in a mobile-first platform:Access to the robust and always-evolving mobile marketplace is a must, and airlines need mobile-first infrastructures that can help them adapt, integrate and change with the market and with ongoing innovation. Needed components include easy integration to the mobile environment, personalization capabilities and predictive data analytics.
- Leverage loyalty to address capacity: With an average of four new aircraft entering the market each day, and with airline load factors at a record-high 80 percent in 2016, according to the International Air Transit Association (IATA), airlines face the challenge of filling new seats. Aircraft manufacturer Boeing estimates that the number of single-body and wide-body craft in the skies will double in the next 10 years as part of airline replacement plans. The mobile channel, combined with mobile-centric loyalty programs, can help customers book their tickets directly from the airlines – which they prefer to do – and can help airlines capture revenues and fill seats. Last-minute offerings and geo-location services in the mobile channel can help airlines increase yields and drive more revenues by making it as easy as possible for passengers to find, book and pay for their flights directly from their smartphones.
Now that travel operators are beginning to embrace the need to generate new revenues by enabling mobile payments for their passengers, market demographics and market innovation demand that they move much more quickly and comprehensively to embed mobility throughout airline operations and the entire passenger journey.
Kristian Gjerding / Kristian Gjerding CEO of CellPoint Mobile, a payment solutions provider for airlines. Gjerding has helped shape the digital payments environment through his work with best-practice standards groups at airline organizations globally.