If you spend even few minutes on the Web you will notice almost every business asks its customers to become a fan on its Facebook page. It doesn’t stop here; most companies ask you to like partner sites to accumulate loyalty points. In the last couple years, this major shift in how businesses approach customer loyalty, from transactional to emotional, is changing the game. Gone are the days when you knew if you spent so many dollars you would be rewarded with a defined value to redeem in a set way. Customers prefer to be surprised with new, innovative ways of rewarding their loyalty. This is not a new science; it always existed in sports, in a different way though. Wonder why people become fans of a sporting team and remain lifelong supporters? It is because their team satisfies their desire to be included in a group they like and want to be a part of.
Businesses understand the need to take loyalty beyond transactional value to a level of emotional gratification where loyal members turn into fans. One of the surest ways is the experience provided to customers in a dynamic loyalty program that can offer benefits in real-time scenarios. An airline is often exposed to flight delays and cancellations, which customers undoubtedly dislike. What if the airline provides its frequent flyers with seats in the earliest possible flight, or a free upgrade, or permissible change in destination? The airline not only turns an unlikely event into a good experience, but also offers an emotional value to its loyal members motivating them to be fans of the airline. Since they cannot offer benefits to all their inconvenienced customers they can rank customers on their social media behavior, and not just on a traditional transactional basis.
Virgin America’s frequent-flyer population of 1.8 million is not just the industry’s fastest growing – climbing at over 40 percent a year – they are also the most engaged. Virgin America’s frequent flyers spend 25 percent more with the airline than non-members, while nearly half have been active within the past 12 months compared to the industry norm of 33 percent. The airline credits its loyalty program – a distinctive blend of art and science – for this extraordinary connection between Virgin America and its frequent flyers. The art is quintessential Virgin: exclusive offers to unique events, tickets to exciting in-flight premieres, and even a chance to score a seat on a Virgin Galactic sub-orbital space flight. The science is TIBCO’s real-time technology and cutting-edge suite of customer loyalty products at the heart of Elevate, the airline’s frequent-flyer program.
When a loyalty member changes from dollars to Elevate points, TIBCO instantly calculates the point price for each combination of product (e.g. day of week, load, cabin) and guest (e.g. lifetime value, recency) variables. This enables the airline to manage yield in real time. The airline can see Elevate members as they book and return customized pricing and other offers instantly, and connect information and offers to all guest touch-points. For all passenger profiles, TIBCO’s loyalty repository serves as Elevate’s “points bank” for both redemptions and accruals.
TIBCO’s loyalty scientists showed speed-to-market and a knack for continuous innovation in loyalty programs. Elevate is unique in its use of technology to acquire new members and nurture existing ones through a never-ending push to enhance the customer experience. Virgin America was the first airline to allow members to earn points with virtual check-ins on Facebook Places and Foursquare
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