London, November 28, 2011: A new survey from Collinson Latitude, a global provider of incremental revenue and membership products, reveals many travel industry businesses anticipate a change in ancillary revenue strategies next year, with more emphasis on up-selling and cross-selling.

Nearly half of respondents (49%) believe cross-selling and up-selling through the booking process will be the fastest-growing area of ancillary revenues for travel businesses in 2012.  Furthermore, 30% of respondents predict that non-travel related product sales will play a pivotal role in the future of ancillary revenues.

Collinson Latitude director Janet Titterton says: “We surveyed loyalty and ancillary revenue managers, particularly across the airline industry, and the results encouragingly prove the industry is seeking to maximise the benefits of customer data insight. With travel companies holding so much knowledge about their customers, cross-selling and up-selling strategies can be tailored to match benefits and promotions to customers’ wider profiles. This targeting can increase the attractiveness, perceived value and ultimate success of ancillary revenue programmes.”

At the same time, however, the survey indicates conventional travel-related offers will remain important in ancillary revenue programmes. Among respondents, 19% predict greater cross-selling and up-selling of travel-related products through the booking process, while 21% predict an increase in on-board ancillary revenues for airlines.

Titterton continues: “Traditional travel-related ancillary revenues will clearly remain important. For example, 22% of survey respondents currently implement ancillary revenues by unbundling previously packaged products and services. However, this process needs to be handled carefully: although ancillary revenues can bring costs down for customers – as unwanted services are no longer paid for – the perception is often very different. As services previously viewed as ‘free’ become billed separately, the travel industry needs to demonstrate to customers that such services really do provide choice and value for money.”

The results of the survey will be revealed at ‘Mega Event 2011’ (November 29-30) in Miami. Collinson Latitude will be sponsoring and exhibiting at the event alongside sister company ICLP.

Travel industry loyalty reward programmes have seen a 31% decline in active participation since 2007*. On average, only a third of loyalty programme members regularly redeem their loyalty currency, leaving many customers cold to their brand’s programme.

Collinson Latitude’s latest trend report, ‘Making your loyalty currency irresistibly valuable everyday’, responds to these findings, claiming airlines and hotels need to differentiate their programmes from competitors through providing engaging loyalty programmes which offer relevant, everyday rewards.

Janet Titterton, director at Collinson Latitude, says: “Hotels and airlines need to encourage more frequent interactions by offering rewards and benefits that are obtainable for every customer, not just the more frequent flyers or business travellers with high levels of loyalty currency. The elite customers are always going to be important, of course, but focusing on them to the exclusion of others reduces the optimal gain that could be achieved from a wider base.

“As the more forward-thinking airlines and hotel chains have realised, by including cash plus points purchases (where the customer makes up the difference in cash) as part of their redemption proposition, they can broaden their offering to appeal to more members. With an ever-rising number of retail partners signed up to web shopping portals, members are increasingly able to use their points and airmiles for everyday items that hold value to them, from the more traditional kettle and toaster options through to experiences and digital downloads. If the redemption offering is broad and appealing members will, naturally, be more inclined to redeem their loyalty currency.”

The report also cites emerging technologies as a key area in which customer engagement can be improved across the travel loyalty industry. With new technologies ranging from ‘automated communications’, such as confirmation emails after every purchase, to ‘pending transaction’ communications, containing personal and targeted brand messaging, new technologies can provide a myriad of opportunities.

Titterton continues: “There is significant scope for both hotels and airlines to be much more innovative with evolving technologies. The best loyalty platforms need to fit with clients’ existing platforms whilst also being able to respond to – and grow with – further technological advances.

“The widespread adoption of smartphones, tablets and mobile purchasing – also known as m-commerce – dramatically opens up opportunities for tailored communication from travel loyalty companies, especially when members are ‘on the move’. Although such activity is still in its infancy, the use of personal data to drive targeted up-sell and cross-sell when people are travelling is increasing.

“The Amazon model, for example, has demonstrated to great effect that consumers respond exceptionally well to tailored product recommendations. ‘Other people who bought this product also viewed these items…’ is a very simple and powerful technique. With the assistance of emerging technologies, airlines and hotels should employ similar tactics.”

In the long-term, the adoption of new technologies can increase redemption and boost revenue for travel loyalty companies. This fact is especially important when companies consider the wider implications of the IFRIC 13 standards.

Titterton concludes: “The need to encourage redemption of currency has garnered even greater significance following the introduction of the IFRIC 13 standards. Now that programme owners can no longer ‘write off’ unspent currency and must account for all currency in the market on their balance sheets, it is in their best interest to offer broad reward options to increase the utility of the loyalty currency.”

Copies of the report can be requested from: www.latitudeignite.com.

* Colloquy.

“Customer-centric e-tailers like Amazon have, for example, introduced many customer relationship techniques that demonstrate the power of suggestion. The proven success of recommending purchases and activities, based on previous interactions, shows how easily the customer experience can be personalised to encourage loyalty. Equally, brands need to embrace the complex, interconnected benefits of the evolving social media world. Customers already love and include online social communities in their everyday lives. Brands that understand how they can play a more significant role within their customers’ social communities can create greater emotional connections. Brands must find innovative ways to add even greater value in these channels to increase their customers’ loyalty.

“From airline frequent flyer programmes through to B2B reseller programmes, many loyalty strategies have not progressed from outdated legacy business models. If brands fail to innovate consistently, and fail to find ways to differentiate their customer relationships from competitor offerings, they risk losing vital customers.”

Stuart Evans, general manager of ICLP UK, adds: “The frustration is that many companies, from financial services organisations, supermarkets and utilities providers through to airlines and hotels, already hold a vast amount of data and information on their customers. But they are not making the creative leap from insight to innovation. Fuel and air alone do not make a fire; to create unique customer value, you also need a spark.

“Listening to customers is a starting point, of course, but not always enough. Henry Ford once commented that had he asked his customers what they wanted, they would have just said a faster horse. Loyalty and marketing professionals in all industries need to show Ford’s foresight in understanding what the customer wants and then exceed those expectations with an innovative new proposition. In fact, the e-tailer ‘recommendation’ technique perfectly illustrates the point, highlighting to customers products that they might want but just not be aware of yet.”

Buckingham concludes: “We’re practising what we preach at ICLP, which includes revamping our website – relaunched today (www.iclployalty.com) – to include much more of the detailed and informative content for which the market and our customers have been asking. As well as the improved look and feel, we have also listened to the loyalty and marketing community and used this insight to evolve our thinking and ensure the website delivers a global hub of loyalty intelligence.”

A high-resolution photo of Mignon Buckingham may be downloaded from Flickr here.

1.            Taking on the Chancellor

On Budget Day, we made private jet operator London Executive Aviation the focus of a high profile article in the Financial Times, attacking the Chancellor’s reported plan for a new tax on private air travel. In a nice case study of reactive PR, having heard about the ‘Learjet levy’ plan early the previous morning, we worked with LEA to turn around a rapid critique of the proposal. By alerting the FT to the story opportunity and providing newsworthy written quotes from LEA to fire a debate, we positioned our client as an authoritative speaker for its industry. Many potential charter customers read about LEA in the FT and the Chancellor abandoned his tax plan later that day (although our claiming credit for the latter might be overdoing a little!).

2.            Crisis? What crisis?

Sometimes PR is about keeping out of the newspapers, rather than being in them. Over the summer, we helped another aviation company manage a financial crisis in Germany, where its subsidiary was heading for administration.  To ensure the facts around the insolvency were reported correctly, we worked with the parent company’s top management and lawyers, and brought in our German affiliate agency, to manage a controlled release of information via selected media in Germany and the UK. As a result, the event was accurately reported as an isolated, unavoidable incident with no implications for the financial health of the parent company. What could have been a bonfire of rumour and speculation ended up a non-story. Job done.

3.            Getting into the Sunday Times, the 80:20 way

Every UK company wants to be profiled in the Sunday Times’ business section, but if you are privately owned and your turnover doesn’t run into the billions, that goal can be a tall order. Award-winning luxury travel operator Scott Dunn gave us precisely that brief, so it could promote its bespoke holiday expertise to the paper’s affluent business news readers. Our secret sauce involved finding a macroeconomic topic on which Scott Dunn could comment, turning our pitch from a story about a holiday operator into one about the UK economy. Business editor Dominic O’Connell liked our angle about Britain’s two-speed economic recovery, evidenced by luxury travel firms roaring ahead of mainstream travel companies, and – hey presto – Scott Dunn was profiled in the paper. Definitely one of our highlights!

4.            Indian media relations? Most certainly!

India, with its fast-growing, resilient economy, is one of the most exciting markets for business jet sales. Throughout 2011, we have been working with Indian media to promote Cessna’s world-leading aircraft to India’s affluent classes and business leaders. Through opinion piece articles, tailored press releases and editorial briefings, we have repeatedly secured coverage in media such as trade title SP’s Aviation, New Delhi’s Business Standard newspaper and top luxury magazine Robb Report India. Who says you need a global PR agency to communicate globally?

5.            Educating five industries at once

In this sluggish economy, businesses need all the income they can get. Collinson Latitude offers clever technologies and services that help airlines, hotels, payment cards, utilities and telecom providers increase their incremental and ancillary revenues. Our challenge has been to educate all five markets about the innovative way Collinson Latitude does this. Our multifaceted programme has used a large element of thought leadership, educating B2B customers through opinion piece articles explaining the revenue opportunities before them. Collinson Latitude’s expertise has been widely showcased in trade titles such as Marketing Week, Travolution, Caterer & Hotelkeeper and Modern Utility Management. We also secured coverage in Dubai’s Gulf Marketing Review and Khaleej Times newspaper to support our client’s marketing in the Middle East. And, with our cloud-based press coverage evaluation system, our client can check how things are going at any time.

6.            Communicating a fatality

Any death is a tragedy, but when it happens on a business trip it can also impact the employer’s reputation. In September, we were called into another crisis, when a client’s employee was killed outside a nightclub in France. Because the victim was a former British soldier and Afghanistan veteran, and was attacked outside a lap-dancing bar in Cannes, the story had ‘tabloid sensation’ written all over it. And sure enough, the national press were immediately onto the news: within a couple of hours we had fielded calls from a range of newspapers, including The Sun, Daily Mail, The Times and The Guardian. By clearly communicating the facts around the event, we ensured press coverage was accurate, false rumours were stifled and our client’s reputation was protected.

7.            Launching a start-up in three European countries

We work with growing businesses as well as multinationals. This year, we helped aviation flight planning start-up RocketRoute get its exciting technology talked about in the UK, France and Germany. Working on a tight budget over a three-month period, we organised a series of press releases that promoted RocketRoute’s early success in a newsworthy manner, which we distributed to our pan-European aviation media database.  We also engaged in active media relations, and the odd bit of arm-twisting, to make RocketRoute the subject of positive product reviews in top aviation magazines, including the UK’s Pilot, France’s Aviation et Pilote and Germany’s Pilot und Flugzeug.

8.            Announcing a major product launch

This year, we helped French travel technology firm KDS launch an important suite of travel and expense management tools. We helped plan and execute a major launch conference in Paris, taking particular responsibility for sourcing a keynote speaker (high-profile travel commentator Simon Calder) and ensuring a solid media attendance. Both before and during the event, we helped KDS explain the full significance of its products in a newsworthy manner. And, in addition to handling on-site media relations on the day, we kept our thumbs busy by running a live Twitter narrative as events unfolded. Online and off, we made sure the corporate travel industry heard the news.

9.            Creating a social media strategy

Many businesses approach social media without clear objectives. London Executive Aviation wanted to ensure a good return on its invested time and money, so engaged us to advise on their social media strategy. We started with an audit of LEA’s online activity and that of peer group companies. We then mapped this behaviour against best practice from other industries to recommend areas for improvement. We outlined a series of measures and ideas to increase LEA’s interaction with online followers, and recommended a wide range of individuals and organisations for LEA to follow online, so as to expand its own audience. Lastly, we suggested a number of tools and an approach to time management, enabling LEA to increase its social media success in an efficient manner. In the words of our client, the document was “excellent” and “very useful”.

10.          Building authority from the ground up

If you are a management consultancy, your core commodity is your expertise. We worked with Maddox Consulting, a strategic consultancy specialising in transportation, to help build its profile as an expert in travel and aviation.  We used thought leadership to build Maddox’s profile and perceived authority, creating a series of expert articles that were published in top trade titles Airports International and Tnooz. We also arranged a media briefing with the Financial Times about a strategy for London’s airports, and had a senior consultant appointment reported prominently in Flight International.

All of that, and there are still two months of 2011 to run! If you would like to discuss how we can help your business, contact Marc Cornelius on:  +44 20 7664 6310 or mcornelius@8020comms.com.

A global provider of incremental revenue products, Collinson Latitude believes airlines and hotels need to think more innovatively to improve their customer engagement and retention.

Janet Titterton, director at Collinson Latitude, says: “There are many rapid, low-cost ways to maintain the loyalty of the customers you hold, but the travel industry has not yet realised the potential of these opportunities. Superior customer service and relevant customer experiences remain key, but you can also increase your customers’ engagement with your brand by providing them with value for money or passing back value derived from your brand buying power. This ‘value exchange’ will enable differentiation and keep your brand top of mind. A long-term, profitable relationship will follow.

“The flexibility of travel loyalty programmes is also key to their success. The market is constantly evolving, so airlines and hotels need adaptive strategies to offer programme flexibility that meets changing market dynamics and customer needs.

“Furthermore, travel companies can apply the best e-commerce thinking to increase the value of their loyalty currency. Take Amazon.com, for example. The company is well-known for providing recommendations based on a previous purchase. Such targeting can be matched by airlines and hotels providing multiple redemption offers – tailored to customer behaviour – to provide customers with ‘everyday benefit’ for their engagement.

“Collinson Latitude is today launching a campaign www.latitudeignite.com to advise travel organisations how to achieve more active, loyal and profitable customers for life. In the past, traditional reward programmes have often been expensive to set up and run, so travel companies are now looking for the kind of flexible, sustainable and cost-effective options we offer.

“From an airline or hotel operator’s perspective, improving the quality and consistency of engagement with customers is a priority. Intelligent airlines, for example, offer frequent flyer programmes (FFPs) with lifestyle rewards far beyond traditional air travel redemptions. Indeed, even the means of earning miles is no longer limited to air travel, and can be achieved through non-travel-related products and services, increasing the opportunity to earn loyalty currency for everyday behaviour. However, the ability to redeem this currency is often restricted by low availability, demanding that loyalty programmes need to offer customers more choice in how they can realise their rewards.

“Airlines are also eager to see customers redeem miles for financial reasons, because complex accountancy auditing guidelines mean unexpired miles represent deferred revenue, which the airline can only release once the miles are redeemed. Alongside the benefit of building customer relationships, FFP managers therefore have a high financial incentive to encourage customers to exploit the full range of redemption opportunities.

“The end result is that customers enjoy regular benefits across many aspects of their lives while the airline or hotel operator enjoys increased financial gain.”

Collinson Latitude’s multi-channel products can be seamlessly integrated into an existing airline or hotel loyalty programme. Capitalising on the proven and growing popularity of online shopping is a particularly strong route to customer retention. ‘RewardAll’, for example, is a merchant-funded online shopping and rewards programme that brings together thousands of diverse online merchants globally, so that each time a customer makes a purchase through the ‘Reward All’ portal, they can earn hotel loyalty points or airline miles. To complement loyalty programmes, ‘iRedeem’ is an online redemption solution that allows loyalty programme members to redeem their loyalty currency across a catalogue of diverse travel, lifestyle and leisure rewards.

Collinson Latitude’s parent company, The Collinson Group, has over 20 years’ experience in loyalty, marketing and membership. The Collinson Group also includes the world’s leading global loyalty agency, ICLP, who partner with global airline and hotel brands to build loyalty and customer relationship programmes.