©2

00

9 S

atis

fly

Ltd

Huntington Beach, CAOctober 23rd 2009Airline Information Mega Event

Sergio MelloCEO

customer intel l igence has i ts place

MEGA EVENT 2009

Better Managing Your Loyalty Program

Improving your member experience:the pros and cons of using Social Media

©2

00

9 S

atis

fly

Ltd

customer intel l igence has i ts place

MEGA EVENT 2009

Better Managing Your Loyalty Program

Improving your member experience:the pros and cons of using Social Media

FFP today

Social Media

Conclusion

SATISFLY

MEGA EVENT 2009

The missing part of the experience: the seat neighbour

Airlines invest to enhance every aspect of the customer experience, but the seat neighbour has never been controllable.SATISFLY provides a unique and complete solution to fill this gap.

MEGA EVENT 2009

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

ABC

DEF

Social NetworkingWork Alone Business NetworkingRelax Alone

& INTELLIGENT SEATING

SATISFLY provides a patent-pending Intelligent Seating service to maximize compatibility among seat neighbours, by catering to each passenger’s behaviour preference and neighbour profile.

MEGA EVENT 2009

1. IntelligentSeating

2. Social Shopping

FFPDatabase3. Real time

updates

& SOCIAL MEDIA

INTELL

IGENC

E

INTELLIGENCE

INTELLIGENCE

SATISFLY leverages Social Media to collect Customer Intelligence for two purposes: 1. Improve the Intelligent Seating effectiveness; 2. Stimulate demand through Social Shopping; 3. Update customer data in the airline FFP and CRM.

©2

00

9 S

atis

fly

Ltd

customer intel l igence has i ts place

MEGA EVENT 2009

Better Managing Your Loyalty Program

Improving your member experience:the pros and cons of using Social Media

FFP today

Social Media

Conclusion

SATISFLY

MEGA EVENT 2009

• Points & miles• Tier benefits• Rewards

• Experience consistency• Engaging staff• Brand enthusiasm

RETENTION LOYALTY

Frequent Flyer Programs

Material drivers Intangible drivers

SO

CIA

LM

ED

IA

SO

CIA

LM

ED

IA

FFPs today achieve results by using two types of drivers: Material and Intangible. Material Drivers aim to improve customer retention while Intangible Drivers foster loyalty.In this sense, Social Media is NOT a ready-to-use product; instead it is a communication channel which must be handled with care in order to improve both retention and loyalty.

MEGA EVENT 2009

THE DOG

• Man’s best friend• A loyal companion

In order to draw a simplified example of the FFPs’ retention dynamics, we chose an actor known for his fidelity to represent the customer: the dog.

MEGA EVENT 2009

Retention basic principle

You fly me, I give you a

bone

A

DO UT DES

The dog sticks to the same owner because he receives food.In the airline business, the customer receives incentives and material benefits for choosing airline A.As the Romans used to say: “Do ut des”. This relationship is based on this principle: “Give in order to receive”.

MEGA EVENT 2009

I fly for bones

The dog becomes a constant presence at the owner’s household.And the frequent traveller is eager to receive benefits and rewards.

MEGA EVENT 2009

New factor: competition

You fly me, I give you two

bones

B

AN EXPENSIVE GAME

What happens when many dog owners adopt the same strategy to feed the dog? The dog decides to show affection to the owner who feeds most.In the same way, airline customers are inclined to choose airline B, which provides more rewards than airline A.As a consequence, airlines enter into a competition that leads to an expensive game, with higher cost and smaller results.

MEGA EVENT 2009

I’m a frequent flyer

In this game, the winner is the dog, turned into a spoiled domestic pet. For the airline, this is when the customer becomes accustomed to higher standards of service and continually raise their expectations.

MEGA EVENT 2009

New factor: transparency You fly me, I give you three bones

A

B

C

AN UNSUSTAINABLE GAME

The internet has introduced many benefits to the airline industry, but transparency is definitely not one of them.The Airline customer faces a variety of options and in a snapshot can base his choice on reviews, benefits and price comparison.In this unsustainable game, the airlines have less control of a customer's purchasing behaviour.

MEGA EVENT 2009

I’m atech-savvy flyer

The control in now in the hands of the consumer, who knows what he wants and how to achieve it.

MEGA EVENT 2009

New factor: downturn Sorry,no more bones

A

B

C

A BAD EXPERIENCE

Eventually economic cycles lead to a downturn. This is the moment when all airlines fail to meet customers’ expectations because they can no longer afford the costly game of the benefits. The dog is disappointed by the bad experience and will feel abandoned. 

MEGA EVENT 2009

Where are my bones?

THE CUSTOMER IS NOT YOUR FRIEND

The efforts airlines put into feeding the dog bones are revealed to have been in vain when the food supply cannot be sustained.Airline customers do not forgive as easily as dogs when their expectations have not been met, so it is dangerous to continue to repeatedly compete by constantly increasing benefits. Reward programs provide short term benefits and sound ancillary revenue models, but cannot cater to the deep-hearted, enduring customer loyalty. Airlines must remember that the customer is not your friend and Social Media cannot turn the paradigm around. But it can enhance communication and ultimately boost loyalty and retention.

©2

00

9 S

atis

fly

Ltd

customer intel l igence has i ts place

MEGA EVENT 2009

Better Managing Your Loyalty Program

Improving your member experience:the pros and cons of using Social Media

FFP today

Social Media

Conclusion

SATISFLY

MEGA EVENT 2009

Social Media

Social Media is no longer a future trend. It is becoming the most important commercial communication channel.To give you an idea of its adoption rate, in October, the Facebook user base reached the size of the US population.

MEGA EVENT 2009

US fastest growing demographic:Gen X and Baby Boomers

Slowest growing region:China

Social Media

The world of Social Media is composed of various platforms catering to different user segments conquering every demographic. However, for a global business such as the airlines, we must note that political factors play a major role in its development. For example P.R. China only allows domestic social networking platforms to thrive, while some conservative countries still restrict access to the most popular sites. As such, the use of Social Media must be tuned regionally.

MEGA EVENT 2009

Purchasing behaviour

SOCIAL SHOPPING

Advocates

Word-of-mouth marketing, trend-setters and advocates always existed, but today Social Media empowers them with an unseen influencing potential.Every sector of an airline’s marketing strategy must take into account and leverage Social Media to maximize the Social Shopping phenomenon.

MEGA EVENT 2009

“Democracy is the dictatorship of the minorities”Dr. A. Stanchi, economist

Democratization of media

HIGH RISK

Social Media allows everyone to be heard. The democratization of the media brings the advantage of empowering advocates’ influence, but the conversation is not moderated. When the tone becomes sour, Social Media turns itself into a double edged sword. In other words, when democracy is stretched to the extreme by empowering every minority, even one voice can veto the decisional system.

It is a game that cannot be avoided, because the consumers' voices are already in play. The airlines must be strategic and join the game wisely, aware of the high risks involved.

MEGA EVENT 2009

Social Sentiment Analysis

REAL TIME TRENDS

Baby born onboard AirAsia flight

This one is for the analysts, Social Media consists of a constant stream of information. It is essential to turn this feature into the airline’s benefit by implementing real-time analysis. The four graphs above represent the quantity and nature of these keywords on Twitter: SouthWestAir, SAS, AirAsia and JetBlue.

MEGA EVENT 2009

Gross National Happiness

QUANTITATIVE METRICS

After playing a major role in the modernization of the kingdom of Buthan, Gross National Happiness is now measurable on Facebook. New quantitative metrics become available from day to day. They enable airline analysts to discover previously unknown customer insights. The airline's duty is to use such insights to enhance marketing campaigns.

MEGA EVENT 2009

CTR & ETR

KPI

Insights

Page content that appears in users’ news feeds

measures click-through rates (CTRs) and engagement rates (”ETRs”)

Now that Facebook offers features for measuring pages’ activity and user engagement, any airline has the tools to set basic Social Media campaign targets.

MEGA EVENT 2009

Old segmentation

Until today market segmentation has played a key role in FFPs. However, the amount of segments were limited by a shallow, obsolete customer knowledge and primitive technology.

MEGA EVENT 2009

Deeper segmentation

ONE-TO-ONE

Today, technological barriers have been overcome and Social Media allows you to know your customers in a deeper more relevant way. Just by engaging and listening, one can gather enough customer intelligence to abandon the old segmentation marketing model in favour of a one-to-one system, where every customer is different from the other.Such in-depth knowledge allows unprecedented customization of service, recognition and proposition tailoring.

MEGA EVENT 2009

Engagement

What does the customer want?

60 MillionMonthly Active Users

FarmVille is the most popular Facebook game

Online engagement can be created with a relevant and useful application or by means of pure entertainment. This is why video content spreads virally and why a no-brainer game like FarmVille achieves incredible levels of engagement. The airlines who undertake Social Media projects shall bear in mind that their product must be either useful or entertaining, otherwise it will not succeed.

MEGA EVENT 2009

Airlines on Social Media?

AIRLINES ?

Pizza Hut offers a an application to order pizza without leaving Facebook

Some airlines have pioneered Social Media with microsites and communities, but like everywhere else in business, simplicity wins: Pizza Hut developed a Facebook application to order pizza. Facebook is already the most established Social Media platform and allows third parties to provide applications and pages at no charge. The benefits of using these platforms are that the users are already there and they trust the environment.Why require customers to start a new journey on a new platform? Why not ride the existing wave of Social Media? Developing a Facebook application has a very low initial cost, yet no airline has integrated booking features in Facebook - yet.

©2

00

9 S

atis

fly

Ltd

customer intel l igence has i ts place

MEGA EVENT 2009

Better Managing Your Loyalty Program

Improving your member experience:the pros and cons of using Social Media

FFP today

Social Media

Conclusion

SATISFLY

MEGA EVENT 2009

Leverage advocates

Customers are NOT your friends

Conclusion

In conclusion, Social Media is not a standalone application. Airlines need to embrace Social Media as a communication channel and master its use to enhance the customer experience within an overall marketing strategy. Be aware that customers are NOT your friends; material drivers only help FFPs in the short term, whereas real loyalty is achieved by intangible means. Even though Social Media can influence purchasing behaviour and sustain retention and loyalty by means of engagement, its ultimate role is to provide fresh customer intelligence.

MEGA EVENT 2009

Leverage advocates

Evolve to one-to-one & real time marketing

Customers are NOT your friends

Conclusion

Innovate

Social Media is a fast-changing game, where first comers get most of the benefits. Results can be achieved by selling what a customer wants, when he wants, where he wants.  Current FFPs must open their doors to new streams of member profile data updates and predictive intelligence in order to implement this sort of real time, one-to-one marketing.Recognition will be enhanced by the airline’s degree of individual customer knowledge, as compared to merely including him in a group. Considering the low entry barriers, not investing in innovation is an opportunity cost.Social Media is a fast-changing game, where first comers get most of the benefits. Considering the low entry barriers, not investing in innovation is indeed an opportunity cost.

MEGA EVENT 2009

Prepare plan B

Leverage advocates

Develop a sustainable strategy

Evolve to one-to-one & real time marketing

Customers are NOT your friends

Conclusion

Innovate

Due to the highly viral nature of Social Media campaigns, operations may need to scale up quickly. Using Social Media as a standalone product may prove detrimental when the size of the operation inflates the costs.Social Media is meant to be a communication tool only, and when used sustainability must be the first concern. Like everywhere else in business, airlines must have an alternative in mind, shall their Social Media strategy fail.

©2

00

9 S

atis

fly

Ltd

sergio.mello@satisfly.com

Thank you

customer intel l igence has i ts place

MEGA EVENT 2009