Six weeks, five countries, four conferences and a pile of travel expense receipts that desperately needs to be sorted. That has been the reality here at Loyalty Truth as we have been on the go while making the most of the final business push of the year before the holiday season settles in and thoughts turn to 2012.

In the middle of the activity, I received a call from a conference organizer seeking my participation in an event being planned for 2012. As many of these conversations go, I initially felt complemented when hearing “You’ve been identified as a thought leader and someone we’d like to have as a key part of our event”.  But as the dialogue wore on, I realized that I was being pitched sponsorship rather than be recognized for thought leadership.

The questions I was asked were intended to help me rationalize writing that big check for sponsorship and included:

• Why do you attend conferences?
• What’s the value of the exposure if you present, exhibit, or sponsor?
• What is the value of just one project that results from contacts made at the event?

You can see where it was all headed. Yes, we attend industry events to learn, but probably the networking is most valued. I fully understand the model and realize that sponsorship dollars fund the event as well as generate a bottom line for organizers.

My revelation was that the conference business is increasingly becoming a game of haves and have-nots. Sponsoring organizations shell out significant dollars to sponsor events and key speaking slots on the agenda are allocated to them as part of the package. That is reasonable considering the investment made.

Suppliers, agencies, and consultants are another matter. I am fascinated by the message that suppliers or vendors are “bad” and can’t be trusted to present without pitching their wares.  Some ground rules are clear, that no presentation should be a sales pitch, veiled or otherwise. Adhering to this rule improves the content of the conference material and raises overall value for delegates. Anyone crossing the line too much or too often should not be invited back as there’s plenty of time for selling during the networking and break times.

On the other hand, there are some highly informed people working in the supplier community that can be of great interest to a delegate group. For example, find the people who are talking about subjects on gamification, location based marketing, mobile payments and NFC, social media measurement, or coalition loyalty. Through their focus and passion for their areas of speciality, they can bring great value to an event.

There are some things in life you can complain about and then there are the ones that we can actually hope to change. I am hoping that the conference business will shift ever so slightly. For example, I would like to see that at least one speaking spot in a morning and afternoon of a typical conference event be allocated based on merit, not money. That means that out of approximately 16 speakers, 4 would be invited based on their material, not just the size of their supporting organization.

This 25% concession would probably not impact the overall sponsorship fees received by organizers. They might even be able to increase revenues through higher registrations or a higher price point.

There’s a very good chance that the model will not change, mostly because it does not have to. Only a Wall Street style boycott would bring that level of change and, since most of us go to conferences for the networking, I don’t expect we’ll see much of an uprising.

At the same time, conference organizers should be on alert. Some brands are shifting attention to proprietary events, where stakeholders are brought together in high quality environments and an open exchange of valuable information takes place. As dollars in travel and marketing budgets stay tight, watch for these high quality privately organized events to become even more attractive.

Maybe that will create the impetus for the general conference industry to alter their approach to the business. We’ll see.

Attending the National Restaurant Association show recently, I solidified some perspectives on social couponing and collective buying schemes in a post here. The buzz from domestic restaurant marketers over how best to leverage collective buying sites such as Groupon, Living Social, Facebook Deals, and the myriad of copycats that have emerged over the past 3 years has been intensified with Groupon’s announcement of its IPO.

Commensurate with news of the IPO were published articles on the “checkered past” of Groupon’s Chairman, Eric Lefkofsky, and new articles documenting Groupon “merchant disasters”. For
restauranteurs and merchants alike, I thought it was time to share a brief guide aimed to optimize your social couponing efforts. If you’d like to learn more or talk in full depth on the subject, feel free to be in touch with myself or Hanifin Loyalty.

There are a series of work phases to engage in order to successfully execute a social couponing promotion:

1. Pre-Planning
2. Operational Considerations
3. Post-Event Evaluation
4. Communication & Next Steps

Pre-Planning
To properly evaluate and offer construct, consider the seasonal time-frame for the offer and build projections and financial models to support back-end evaluation of response profitability.

Include the following items in your consideration set as you build a financial projection for the promotion:

1. Projected number of responses across eligible time-frame
2. Average value of sale
3. Number of customers carried along with coupon event – buyer plus
4. Normal sales, traffic counts for time-frame
5. Gross, net margin
6. Incremental/complimentary sales – up-sell, cross-sell
7. Incremental expense – personnel, cost of goods, logistics, new systems, accommodations/concessions to satisfy customer experience

Operational Considerations
Once a promotion is evaluated and justified, the details of execution must be analyzed. Take these steps to meet with success in market execution:

1. Consider what it will take to support any spike in traffic and customer seating to deliver a consistent customer experience for all patrons. Both patrons whether redeeming a collective buying coupon and paying full price should be accommodated in a manner to complement your brand.
2. Inform your staff prior to the coupon going live so that they know what to expect. Good communications will ensure that your front-line associates are not only prepared for a possible new customer onslaught, but will greet customers with a smile.
3. Address any legal terms and conditions that you want to put into place to protect your return on investment, while maintaining the integrity of your customer service philosophy. Don’t comprise customer friendly and easy/fast/fun just for the sake of running the promotion.
4. Include your suppliers in pre-promotion planning and tactical execution plans to ensure you have sufficient provisions and inventory to meet customer demand. You certainly don’t want to run short on product supply, putting yourself in position to create backorders and issue “make-goods”. Remember this is an opportunity to gain new customers, so be certain you will be able to delight them, in turn encouraging return visit. Do this well and you will hopefully create an army of brand advocates through reviews and referrals via FourSquare and fans/likes on Facebook.

Post-Event Evaluation
No direct or loyalty marketer is worth their skin unless they measure results and know how to do better next time.

Let’s assume you survived what felt like an enormous volume of traffic and that your wait staff reported lots of new faces making a store visit. By all reports, the promotion registered positive results.

Now what? Specifically, what do you measure to gain confidence for the next time?

1. Was there any buzz in the form of reviews or Likes on Facebook?
2. Were there any negative comments on blogs during the redemption time-frame that related to the offer?
3. How much was redeemed and what was the breakage rate?
4. What tender was used for payment?  This helps for future promotional tie-ins with credit card issuers.
5. Can you tell who redeemed, how many customers were new, how many have returned for second visit?
6. Did you meet or exceed your financial projections?  Was it a positive return on investment?

Communications & Next Steps
The cardinal sin in social couponing is to be “one and done”. To build sustainable impact for the business, you must commit to doing this more than once.  What did you learn from your first dive into the deep end of the pool and, assuming you didn’t drown, what’s next?

1. Leverage insight on those who redeemed and adapt or personalize your e-mail communications to take advantage of what you learned. Make all communications as relevant as economically possible and as your data permits to improve open rates, click-thru in order to see new profitable transactions.
2. Are any new customers acquired having a birthday soon? Any new customers acquired having an anniversary or special event (graduation, etc.)? What will you do to create a stronger relationship with these folks?
3. Adjust the timing of the redemption window to best suit your seasonal traffic patterns
4. Gain new insight by incorporating a link to a survey page so you can learn more about your customers and other members of their household
5. Support franchisees with personalized communications custom to their location
6. Consider incorporating community events into your next wave of digital couponing. Choose from events unique to your location, whether music, promotional giveaways tied to beverage partners, or something else.
7. Adapt learnings from the coupon event to test/learn on new offers. Consider changing the threshold offer spend or offer something free. In either case, base your numbers on what was observed in the last transaction

Beyond good execution of your collective buying experiment, think about how you can use the platform to create additional offers that will strengthen customer engagement and build longer term customer loyalty. For restaurants, you might consider offering a complimentary benefit for dining with you again, or create a package offer with music or entertainment partners in the area.

Collective buying isn’t a strategy, it’s a tactic that, when solidly executed, can yield good results for a business. Following these steps in planning and execution will improve the chances of success and create a foundation for future promotional enhancements.

From the Editor: Loyalty Truth values its select group of guest contributors and is proud to share thoughts from this week’s National Restaurant Association (NRA) show from David Slavick. David is a long time colleague, and has worked with several national retail brands to develop complex marketing and 1:1 customer initiatives over recent years.

Attending the show this week, David participated in discussions about how restaurants can best leverage collective buying sites (a/k/a Deal of the Day) such as: Groupon, Living Social, Facebook Deals, Scoutmob and the myriad of copycats that have recently emerged.

Here’s his take:

A top priority focus for restaurant operators from the small café owner to the CMO at a national restaurant chain and all in between is to fight for every customer, generate repeat traffic, and do it all profitably. Every business day these professionals work hard to optimize square footage between front and back of house, improve food prep efficiency while reducing waste, and apply technology to manage customer relationships.

It’s a big challenge.

These were all key themes at the NRA, but what really intrigues both the sophisticated as well as the neophyte marketer in the consumer restaurant category is to evaluate the role virtual coupons should play in their plans for 2011, and to determine a logical approach to leverage the collective buying sites mentioned. If you plan to dive into the pool of collective buying, you better be prepared to swim in the deep end, because the risk – reward equation is decidedly high.

Even in a business environment where new customer acquisition costs are on the increase, few firms are willing to give away $50 in sales for a $25 purchase in the name of “experience”. The adoption of “deal of the day” offers has been over simplified in the press, mostly due to the pervasive adoption of the tactic by restaurants and other retailers.

To properly evaluate “deal of the day” for your business, it takes pre-planning discipline, operational coordination, a vision for what you hope to accomplish, plus the tools in place to evaluate and sustain the momentum, post-campaign. It is commonly accepted by those who have learned to swim in these waters that your restaurant or hospitality operation must jump out of the starting blocks smartly and be able to answer the following questions in the affirmative, and without hesitation:

1. Can we afford to take a loss, even a big-time loss in order to gain new customers?
2. Do we have the capacity to handle the volume that an offer, even with limitations, may generate – including being able to staff optimally, take reservations, and accommodate surprise “drop-ins” with equal grace and warm smiles?
3. Are there other services we can sell during the redemption event, or which are complimentary to the customer experience that will generate incremental revenue?
4. Do we have seasonal peaks and valleys in our business, and are we willing to fulfill on an offer over an extended time period – up to 3 months – knowing that there may be overlap with the high season?
5. If fulfillment does cross into a peak season, how will we handle operational pressure and accommodate customers, including satisfying the offer post-expiration?
6. Do we have the systems in place to leverage on-boarding of new customers – either through the “old fashioned way” with personal information captured on a comment card, or through sign-up in a rewards program already in place?
7. Are we willing to support a double-dip, i.e. redemption of a deep discount coupon, while funding rewards per program rules of our existing loyalty program?
8. Do we have the capability to execute campaigns post-coupon event to thank the customer for their visit and encourage repeat business?
9. Are we willing to accept the risk of “Hit N’ Run” customers – those who redeem and never return, for the benefit of acquiring new ones?

From the list of questions above, it’s clear that the foundational considerations for the restaurant or hospitality marketer to consider before moving forward with collective couponing campaigns are anything but simple. Importantly, the vendors who facilitate delivery of the offer should be providing the client (your brand) with both planning and post-campaign services.

To date, these providers seem to talk a good game about measurement, but don’t go much further than offering upfront metrics for tracking coupon views and on-page advertising impressions delivered to the interested browser. Site/page metrics, broad customer demographics, and customer tracking through reservations systems like OpenTable help, but still don’t provide an adequate picture for the brand.

In a white paper to be published by the WiseMarketer shortly and thereafter by Hanifin Loyalty, I’ll provide a more comprehensive guide to optimize your social couponing efforts. If you just can’t wait, give Hanifin Loyalty a call to get the “rest of the story”.

Conferences and events seem to come in bunches and there are several taking place over the next few weeks where we will be in attendance.

Consider this your invitation to reach out in advance of the events you will be attending and let’s make an effort to connect face to face.

Face to face? I know it’s a quaint, old school notion, but it still can’t be beat.

23rd Card Forum & Expo / April 27 – 29, 2011  / Miami Beach, Florida

3rd Customer Experience Summit / May 23-25, 2011 / Miami Beach, Florida

Customer Relationship Management Conference / June 8-10, 2011 / Chicago, Illinois

Look for conference reports published after each event in The Wise Marketer.

Hope to see you soon!

Here in Orlando, enjoying the best Loyalty Expo to date, I can tell that change is in the wind. Today’s sessions covered future visions of how loyalty is evolving to drive results for brands across vertical industries. Loyalty 360’s chief, Mark Johnson provided a keynote documenting  changes in consumer behaviors that are compelling loyalty marketers to adopt new perspectives on program execution.

Barry Kirk, Maritz led a panel of practitioners from Gamestop, SAP and others who talked about the holes in current loyalty models and predicted that cross channel marketing and better use of data collected on loyalty program members will lead to breakthroughs in loyalty ROI.

Jonathan Silver, Affinity Solutions shared how Sony is using an innovative approach to retain viewership and support advertising revenues for Wheel of Fortune, America’s most watched game show.

Peter Oxley, RewardStream and Kiwi Collection shared insights into how referral and recommendation marketing leverages human behavior to create loyalty without a formal program construct.

Tomorrow, BJ Emerson, Tasti D Lite, will talk about the frozen desert chain’s use of passive check-in to accelerate the rewards earned by members of its Tasti Rewards program. More great content is sure to complete Day Two in Orlando.

Meanwhile, I received notice from Mike Atkin, a well regarded UK based loyalty consultant, that he was featured on New Zealand TV to share his views on the state of the industry in that country with comparisons drawn  to leading UK programs including Tescos. You can watch the video here.

In 2005, Mike Atkin and I founded the Customer Strategy Network as a global association of independent loyalty marketing practitioners. At that time, we were surprised that the 25 year old relationship and loyalty marketing industry did not have a professional organization where ideas and best practice could be exchanged in a non-competitive environment. That simple observation led to the establishment of this group, signifying a new model of cross-border collaboration among leading marketing experts.

CSN was founded on the pillars of solution independence and cross-border understanding, and its members deliver strategies for clients worldwide. CSN will have a new web site available shortly, so please watch this space for announcements.

It seems that Loyalty Marketing is truly entering a new phase of development. I’ve been encouraged by new ideas shared by delegates at Loyalty Expo and Mike’s appearance on NZ TV tells me that Loyalty never sleeps!

If you want to get a sniff of where Location Based Marketing is headed, you have to go where the leaders are and listen. A good friend of Loyalty Truth, Ron Stack attended the Location Based Marketing Summit held recently in New York. Ron is CEO of Zavee.com, a social shopping network based in Boca Raton, Florida. This report was filed by Loyalty Truth with Ron’s help and published first in The Wise Marketer this week.

The conference blended strategic and tactical insights about location-based marketing techniques, and most of the speakers observed that location based marketing is still in its earliest stages, and getting consumers to ‘check in’ digitally is only the beginning of this emerging marketing technique’s possibilities.

The principal strategic focus of the conference, however, was on consumer engagement and how to increase it. Several speakers referred to Forrester’s recent finding that regular use of the ‘check in’ model was still in single-digit percentages, and that consumer awareness of these services wasn’t much higher – a report that has however been disputed at least once.

Either way, with estimates of more than 12 million people playing what consumers will initially consider “the location game”, smartphone penetration reaching 9% of the handset market, and SMS usage covering 95% of all wireless customers, it is clear that almost all consumers can be reached with marketing messages via a mobile handset.

Ian Schafer, CEO for Deep Focus, discussed ways in which marketers could use the technique for more effective marketing, suggesting that it can grow customer loyalty, increase relevance, and provide useful data and insights. He considers the smartphone to be “the next generation loyalty card”, with targeted deals and discounts being available upon check-in (or perhaps even without a digital check-in). By way of example, he highlighted ShopKick, which has a hardware platform that pushes reward currency to the consumer as soon as they enter the merchant’s store (without the consumer even having to check-in or make a purchase).

Overall, it was agreed that location-based applications can at least provide:

• People – other users who might have something in common with the user;
• Content – messages or offers based on what the user likes that is at/near her location;
• Time and Place – targeted, timely messages or offers based on where the user is right now;
• Context – communications based on prior behaviour, as tracked by the location-based device.

The potential of location-based data is that it can drive better business decisions by adding additional dimensions (i.e. time and place, captured over time in real-time) to what is otherwise known about each consumer’s behaviour. One great example cited was the Microsoft Bing ‘Home Turf Finder’ for the World Cup, which identified certain bars in New York City as “home turf” for fans of a particular team. The determinations were based in part on editorial sources such as Thrillist, but were mostly derived from ‘heat maps’ of consumers who had checked in or tweeted their support as well as their location.

Several speakers also noted Google’s recent announcement that 30% of mobile searches and 20% of all internet searches have local intent, and said that all of the major players (e.g. Facebook, Google, and even wireless carriers) were already focusing on local information.

There was also considerable discussion of Groupon, although some panellists expressed doubts that the “deep discount, deal of the day” model provides sustainable customer growth. Speakers agreed, however, that geo-targeting adds value by increasing both relevance and personalisation.

Overall, panellists agreed that there is great demand for marketers to engage with consumers at “the right place and the right time, all the time”. Mobile couponing, despite being a fragmented space, seems to have taken hold. As a result, one area in which technological developments are anticipated is indoor navigation, where GPS signals are sometimes degraded and are not designed to be accurate enough for navigation within a store.

Finally, the issue of consumer privacy arose in almost every session. John Nicholson of law firm Pillsbury Winthrop Shaw Pittman concluded that “the more value a marketer delivers, the more information a consumer is likely to share”, and that an application that seems to exist only for marketing purposes is unlikely to gain the consumer’s trust.

Editor’s note: My thanks to Ron Stack for filing this report and for pushing the envelope on customer loyatly, bringing local merchants into the game with Zavee.com.

Listening to execs sharing insights into key airline marketing and business issues at The Mega Event 2010, I put together an airline loyalty marketing  IQ test just for you.

The questions were raised and answered through a compilation of remarks from the following companies including, but not limited to: Aeroplan, American Express, Emirates Airways, Kobie Marketing, Millenium Aviation, Peppers & Rogers, Qantas, Sapient Nitro.

Here’s a Mega Quiz for you:

1. Name a line of business in the airline industry that is barely 2 years old and now accounts for $14Billion annually.
2. Name one aspect of air travel that is getting more attention from the Department of Transportation than helmet on helmet hits are getting from the NFL?
3. Name the second air carrier in the world to spin off its frequent flyer program (FFP) after Air Canada spun off Aeroplan?
4. Name the two most significant sources of profit for Qantas, the largest airline in Australia and the second oldest in the world?
5. According to Google Chief Economist Hal Varian, what will be the sexiest  corporate job over the next 10 years?
6. We have Twitterati, Datarati, and soon will have Loyalarati. Who are these people?
7. What percentage of Twitter conversations will be handled through automated means by corporate tweeters in the next 2 years?
8. What are 3 synonyms for loyalty program “liability”?
9. How important will Privacy issues be to business in the next 10 years?
10. What is considered to be the growth industry of the next decade?

Answers:

1. Ancillary Revenue a/k/a a conscious un-bundling of the air travel experience that generates profits but has potential to undermine customer satisfaction
2. Ancillary Revenue (The DOT is considering implementing new standards for fee disclosures as part of a broad rule-making proceeding)
3. TAM, the Brazilian carrier
4. Profit from its FFP and operation of its low-cost carrier JetStar
5. Statistician
6. Datarati are those companies who make a commitment to using their hard fought customer data to drive business results, while the emerging Loyalarati will be those enterprises which deliver their respective brand promise with a unwavering commitment to customer engagement and enterprise loyalty which honors customers, vendors, shareholders, and partners to create unshakable competitive advantage.
7. 20% minimum
8. a) Deferred discounts (they only get cashed in when points/miles are redeemed); b) Current Asset (If the company has reserved cash to account for some or all of the value of unredeemed points/miles, there should be a stockpile of cash that can be used to drive innovation and business results); c) A “darn good thing” because liability is an outcome of customer purchase behavior and an indicator of the health of customer engagement across the business.
9. What’s privacy? That dies just a little more each day as Millennials share more information and leading social networks leak personal data
10. Loyalty Marketing!

The Mega Event wrapped up last week in Montreal with the first annual presentation of the Mega Awards honoring the best in airline frequent flyer programs (FFP) and a second day of presentations that covered social media, coalition marketing, and a keynote which unveiled the term “Trustability” from Don Peppers.

Mega Awards were conceived to recognize marketing campaign and product development excellence in the airline industry covering Loyalty, Social Media, and Ancillary Revenue.Freddie Laker hosted the awards evening. A founder of Sapient Nitro and son of legendary airline innovator Sir Freddie Laker, he was so entertaining that an ESPY hosting gig might be in his future.

You’ll have to visit the Mega Awards web site for all the details, but here are three highlights that stood out for me:

Best Merchandising Product
Wessco International won top honors here for creating a co-branded offer that bundled a $10 off $30 coupon for Bed Bath and Beyond with a blanket and neck pillow package sold on board American Airlines. With airlines fracturing the flight experience and turning each piece into a revenue opportunity, passengers need a little incentive to play the game. American Airlines trialed the BBB coupon on its flights and sold over 200,000 units in 6 months, creating ancillary revenue for AA while giving travelers more coupon value than the cost of the blanket and neck pillow kit.

Best in Airline Social Media
Air New Zealand created its AirPoints Fairy as a flighty persona that listens to customers and often grant their wishes – all through the AirPoint Fairy’s Twitter account. There was lots of innovation in this category with Lufthansa’s MySkyStatus allowing people to stay connected within their networks during travel and Volaris and airBaltic using Facebook pages to deliver messages about special fares and generate big chunks of incremental revenue. ANZ leveraged its program to set it apart from competition and illustrated how social media could be used to drive tangible results.

Best in Airline Loyalty
A tough category to judge with many worthy entrants, Velocity, the loyalty program of Virgin Blue, came out a winner. Locked in a dog-fight with rival Qantas, Virgin Blue had 60 days to create and execute a campaign to protect its frequent flyer base in light of market changes impacting how banks would allow consumers to use their credit card rewards points.

The promotion was multi-faceted and included an immediate 25% bonus point award to transfer points to Velocity as well as the chance to win 25 million points – the biggest rewards based prize ever offered in Australia. 25 million points equated to a chance to go into space on the highly publicised Virgin Galactic space ship.

Using the creative premise that Velocity was offering ‘average Joes’ the chance to go into space the campaign told the story from the “civilian” side and that of a disgruntled astronaut. The fictitious astronaut, Sgt Major Scott Petersen, protested in a YouTube video that “space is not for amateurs” and circulated petitions via Facebook pleading for support against “this crazy Velocity promotion that will let mere amateurs go into space”.

The promotion achieved the overall goal of shifting a key segment of bank card point collectors to the Velocity program and notched a 1605% increase in points transfers compared to a non-campaign period.  Points transferred per day increased by over 850% compared to a non-campaign period and approximately 400,000 visitors were attracted to the micro-website.

All costs accounted for, the promotion returned an outstanding 10:1 ROI, enough maybe to even pacify that angry astronaut.

I don’t usually include conference reports as posts in Loyalty Truth, but the quality of content shared by key persons in the airline / banking / loyalty industries during the first day of the Mega Event was so strong that I make an exception.

Rupert Duchesne, President Groupe Aeroplan kicked off the day by talking about – what else ? – The Future of Loyalty.  He noted 3 key trends that in his opinion, will define the business going forward:

1. Duchesne borrowed from an article written earlier this year by Google Chief Economist Hal Varian and stated that the Rise of the “Datarati” would define the winners among operators of frequent flyer programs (FFP). In simple terms, he made clear that the companies which use the data they have collected effectively to drive marketing efforts will come out on top. We agree here in Loyalty Truth.
2. Credit card rewards programs will continue to be under pressure. With the passage of CardAct 2009, the Code of Conduct in Canada, and the looming Durbin Amendment, life as a credit card marketer will continue to be challenging in 2011 and beyond.
3. There will be an Evolution of how Best Customers are defined. Companies will go beyond the typical Recency, Frequency, Monetary Value equation and add Social Influence (using things like a Klout score). Duchesne cited ShopKick and Social Rewards as examples of outfits that are bringing this idea to market.

Lance Blockley, Managing Director Edgar Dunn & Company contrasted Co-branded credit card offers linking “direct” to FFP programs and those credit card offers that consolidate multiple travel awards rather than linking with just one airline, offering up some insightful distinctions between the two models.

The panel discussing “Lessons from the recession” was a pleasure for me to moderate as we had 4 stellar panelists with Air Jamaica and Virgin America represented. Dr. Ricardo Pilon explained how airlines need to refocus their objectives and think about the holistic nature of customer loyalty to meet future challenges. Brett Billick, Virgin America emphasized that airlines should keep the focus on the product, not on the loyalty program itself. Angela Brissett-Martin, Air Jamaica offered a great case study of how the airline reached out to their highest tier flyers to make sure they stayed “on board” during the recent merger with Caribbean Air. Jef Harris added that airlines have to balance their ancillary revenue strategies with overall loyalty strategy.

A panel discussing the new IFRIC 13 standards for managing liability from FFP’s brought new perspective to a subject many would prefer to avoid. Instead of thinking of the value of unredeemed mileage as “liability”, Mikund Srinivasan from Emirates / Skywards suggested that we consider the money socked away to be a current asset that can be used to fund program improvements. Mike Hemsey, President Kobie Marketing, preferred the term “deferred revenue” and reminded delegates that high redemption equates to strong engagement and strong incremental revenue growth.

The day wrapped up with Simon Hickey, CEO Qantas FFP, who talked about how the airline formed its coalition style program and the results it has generated. Earlier in the day, Duchesne had stated that Loyalty was important as Qantas had registered all of its profit last year from two sources: its FFP and low cost carrier, so you knew that Hickey’s story would be a good one.

During the presentation, Hickey announced the airline’s new iPhone app and emphasized that Customer Engagement was key to future success. He wrapped up by predicting that Loyalty would be “the growth industry of the next decade”.

I think I have to agree!

Gearing up for the Mega Event 2010 next month, I’ve been thinking hard about where frequent flyer programs have gone astray and whether they still register with consumers as the Gold Standard of Loyalty Marketing.

I’ve assembled links here to a few posts on Loyalty Truth addressing the shortcomings and opportunities for FFP’s and invite your opinions.

My Miles Aren’t Worth Anything

Headwinds for Frequent Flyer Miles

Airlines Take Flight Without Data

How to Fix Frequent Flyer Programs in One Blog Post

Draw your own conclusions, but my opinion is that there is plenty of low hanging fruit for the airlines to pluck to create stronger relationships with their better customers. It would not take that much effort to deliver more relevant communications and meaningful offers to FFP members and in turn offset some of the anger currently directed towards the declining cabin experience on many airlines.

To me, the future of frequent flyer programs is in the hands of the airlines themselves and is a matter of will.

• There is plenty of data available, but “will” it be used?
• There are plenty of options to drive mileage redemption, but “will” some sacred cows be sacrificed?

Enjoy the read and let me know your thoughts. Hope to see you in Montreal.