Aimia Inc. · TSX:AIM
Aimia — Conference Presentation (February 2012)
45 slides from Aimia's conference presentation, Feb 29, 2012
Slide 1: Retailers With Wings: Can Retail and Travel Programmes Co-exist?
RETAILERS WITH WINGS: CAN RETAIL AND TRAVEL PROGRAMMES CO-EXIST? 29.02.12 Sandra Diem
Slide 2: Proprietary Statement
PROPRIETARY STATEMENT The information contained in this document is confidential and proprietary to Aimia. Aimia has shared this document with the understanding that it will be held in strict confidence, and will not be disclosed, duplicated or used in whole or part, without the prior knowledge and
Slide 3: Questions to Ponder
QUESTIONS TO PONDER • Are broad-based frequent flyer programmes attractive to retailers? • Can retail programmes help deliver incremental value to travel companies? • Are retail programmes a threat to travel programmes? • Can travel programmes learn anything from retail programmes in terms of data m
Slide 4: Aimia Update and Credentials
AIMIA UPDATE AND CREDENTIALS
Slide 5: A World Leader in Loyalty Management
A WORLD LEADER IN LOYALTY MANAGEMENT We design, build and operate some of the world’s best loyalty management solutions. We do this for ourselves and for some of the world’s top brands. 5
Slide 6: A Full Suite of Loyalty Management Services
A FULL SUITE OF LOYALTY MANAGEMENT SERVICES We are the only company offering a full suite of loyalty management services on a worldwide scale. PROPRIETARY LOYALTY COALITION LOYALTY ANALYTICS LOYALTY 6
Slide 7: Many of the World's Leading Brands Choose to Work With Us
MANY OF THE WORLD’S LEADING BRANDS CHOOSE TO WORK WITH US 7
Slide 8: Coalition Loyalty
COALITION LOYALTY LEVERAGES FULL SUITE OF LOYALTY SERVICES FOR COALITION PARTNERS WORD-CLASS, LAUNCHES GREENFIELD COALITIONS MULTI-PARTNER LOYALTY PROGRAMMES BUILDS VALUE FOR EXISTING PARTNERS WITH PROVEN ROI GUIDES LEGACY PROGRAMMES INTO STAND-ALONE BUSINESS UNITS AND COALITIONS 8
Slide 9: Are Broad-Based FFPs Attractive to Retailers?
ARE BROAD-BASED FFPS ATTRACTIVE TO RETAILERS?
Slide 10: Brand Association and High-Income Members Benefit Both Parties
BRAND ASSOCIATION AND HIGH-INCOME MEMBERS BENEFIT BOTH PARTIES • Retailers benefit from halo effect of the FFP brand • Top-tier members generally fall in HH income bracket and therefore are attractive to retailers in terms of average transaction frequency (ATF) and average transaction value (ATV) •
Slide 11: Programme Positioning Depends on the Target Audience
PROGRAMME POSITIONING DEPENDS ON THE TARGET AUDIENCE Best served by: Travel-based coalition programme • airlines Frequent travellers • hotel/car &/or high spenders • financial partners Travel or Retail based Less frequent coalition programme travellers and/or • airlines/hotel/car spenders • financia
Slide 12: The Frequent Flyer Core vs. Coalition Opportunity
THE FREQUENT FLYER CORE VS. COALITION OPPORTUNITY TRADITIONAL FFPS COALITION OPPORTUNITY • Product and marketing focused on • Increased engagement of infrequent high-value frequent flyer segment flyer base from: • Majority of members are infrequent • Increased earning opportunities to travellers or
Slide 13: Two Models to Leverage Benefits of a Coalition
TWO MODELS TO LEVERAGE BENEFITS OF A COALITION 1. FFP EXPANSION MODEL – AIR 2. CO-EXISTENCE MODEL – BA/AIR CANADA, QANTAS,TAM, MILES UK, IBERIA & TRAVEL AEROMEXICO CLUB, LUFTHANSA & PAYBACK • Evolve FFP to a coalition programme • FFP maintains focus on attracting and attracting & engaging more membe
Slide 14: Earn & Burn Partnership Maximizes the Value to an Airline
IN A CO-EXISTENCE MODEL HAVING AN EARN & BURN PARTNERSHIP MAXIMIZES THE VALUE TO AN AIRLINE • Access to a very large base of engaged 1 3 5 6 6 8 8 8 customers – Often representing Airline FFP Program PARTNERS 50%+ of households CURRENCY – Direct communication channels convert – Superiour data at cus
Slide 15: Qantas Frequent Flyer – Coalition Expansion Through Auto Conversion
QANTAS FREQUENT FLYER – COALITION EXPANSION THROUGH AUTO CONVERSION PROVIDES CUSTOMER CHOICE Earn miles on spend in Woolworths and other brands Over 3M cardholders have linked their Woolworths and Qantas Frequent Flyer accounts 15
Slide 16: Aeroplan Model – Coalition Expansion
AEROPLAN MODEL – COALITION EXPANSION TO PROVIDE MORE EARNING OPPORTUNITIES FOR TRAVELLERS & CC SPENDERS 16
Slide 17: Avios Model: Retail & FFP Co-existence With a Single Currency
AVIOS MODEL: RETAIL & FFP CO-EXISTENCE WITH A SINGLE CURRENCY Avios Retail Program ‘Combine my Avios’ 17
Slide 18: Multiplus Model – Expansion Through Conversion Partners
MULTIPLUS MODEL – EXPANSION BY LEVERAGING APPEAL OF AIR TRAVEL REWARDS TO A BROAD RANGE OF CONVERSION PARTNERS • Multiplus allows its members to accrue and redeem points in several different market segments • Today it consists of more than 160 commercial partners connecting approximately 9 million m
Slide 19: Example of a Retailer Benefiting From a Travel Based Coalition
EXAMPLE OF A RETAILER BENEFITING FROM A PARTNERHSHIP WITH A TRAVEL BASED COALITION Gas Market Share of Aeroplan Members Market research indicates an increase in Esso Esso revenue (millions of C$). 3 year CAGR: 28% share of Aeroplan customer petrol spend, at Members accumulating at Esso. 3 year CAGR:
Slide 20: Airlines Also Benefit From Tapping Into a New Market Segment
AIRLINES ALSO BENEFIT FROM BEING ABLE TO TAP INTO A NEW MARKET SEGMENT Higher leisure market share from Reward availability FFP infrequent flyers locks in leisure share AC Westjet Share gain from INCREASED Non-members 23% 50% 25% who would AIRLINE MARKET book on New members 39% 15.5% another airline
Slide 21: A Few Considerations in Developing Retail Partnerships
HOWEVER, A FEW CONSIDERATIONS IN DEVELOPING RETAIL PARTNERSHIPS • Cost/Value of FFP currency – With smaller margins retailers are often looking to provide .7% - 1.2% back to customers vs. typical 2% + of an FFP currency • Frequency of communications – Frequent (weekly) shopping behaviour requires th
Slide 22: Are Retail Programmes a Threat to Travel Programmes?
ARE RETAIL PROGRAMMES A THREAT TO TRAVEL PROGRAMMES? DO THEY HELP TRAVEL COMPANIES?
Slide 23: Are Retail Programmes a Threat to Travel Programmes and Companies?
ARE RETAIL PROGRAMMES A THREAT TO TRAVEL PROGRAMMES AND TRAVEL COMPANIES? • Serve a purpose and can be complimentary in nature • Provide access to a large database for acquisition and trial • Revenue generator for travel companies through redemption and conversion partnerships • Enable airlines and
Slide 24: Retail Programmes Provide a Revenue Opportunity for Airlines: easyJet
RETAIL PROGRAMMES PROVIDE A REVENUE OPPORTUNITY FOR AIRLINES: EASYJET EXAMPLE 24
Slide 25: Incremental Visibility Through Programme Communications: easyJet Launch
AS WELL AS INCREMENTAL VISIBILITY THROUGH PROGRAMME COMMUNICATIONS: EASYJET LAUNCH 25
Slide 26: Another Example of a Retail Programme Providing Revenue for Airlines
ANOTHER EXAMPLE OF A RETAIL PROGRAMME PROVIDING A REVENUE OPPORTUNITY FOR AIRLINES 26
Slide 27: Some Airlines Prefer a Conversion Relationship
SOME AIRLINES PREFER A CONVERSION RELATIONSHIP WITH RETAIL COALITION PROGRAM 27
Slide 28: Conversion Gives Retail Programs an Easy Mechanism for Aspirational Rewards
CONVERSION GIVES RETAIL PROGRAMS AN EASY MECHANISM TO OFFER ASPIRATIONAL REWARDS 28
Slide 29: Conversion Alone Does Not Maximize Benefits: Expedia
HOWEVER CONVERSION ALONE DOES NOT MAXIMIZE THE BENEFITS OF A RETAIL PROGRAM PARTNERSHIP: EXPEDIA RELATIONSHIP WITH NECTAR ILLUSTRATES POTENTIAL 29
Slide 30: Bookings From Almost a Quarter of Respondents Would Not Have Been Made Through Expedia
BOOKINGS FROM ALMOST A QUARTER OF RESPONDENTS WOULD NOT HAVE BEEN MADE THROUGH EXPEDIA IF NECTAR POINTS WERE NOT AVAILABLE Q14 Had you not been able to collect Nectar points, would you have still chosen to book through Expedia anyway, or would you have booked through another company? Almost a quarte
Slide 31: Nectar Shifts Customer to Higher Margin Products at Expedia
NECTAR SHIFTS CUSTOMER TO HIGHER MARGIN PRODUCTS AT EXPEDIA • Acquired Nectar collectors are more likely to book higher- margin products for first and repeat purchases • 50% of acquired Nectar customers have booked hotels versus 48% of Non-Nectar customers and 24% have booked packages versus 18% 31
Slide 32: Nectar Travel Becoming One of the Most Successful Nectar Channels
NECTAR TRAVEL IS NOW BECOMING ONE OF THE MOST SUCCESSFUL NECTAR CHANNELS FOR EXPEDIA Nectar Travel informs collectors of all the places they can collect and spend points on travel It is supported by 6 eNewsletters per year with open rates between 3 and 5 times greater than Expedia’s standard emails
Slide 33: In Summary
IN SUMMARY • Ability for retail and travel programmes to happily co-exist • Retailers gain perceived value from association with programmes targeting frequent flyers which can translate into higher margin sales, larger basket size and increased frequency • Travel companies can use retail programmes
Slide 34: What Can Travel Programmes Learn From Retail Programmes
WHAT CAN TRAVEL PROGRAMMES LEARN FROM RETAIL PROGRAMMES WHEN IT COMES TO DATA AND CRM? WHAT WILL THE FUTURE BRING?
Slide 35: Data Is the New Oil
DATA IS THE NEW OIL “Personal data is the new oil of the Internet and the new currency of the digital world.” Meglena Kuneva, European Consumer Commissioner 35
Slide 36: Some Perspective…
SOME PERSPECTIVE… 50 47 30 10 95 36
Slide 37: Connecting the Dots
CONNECTING THE DOTS • Foursquare: Knows where you are, but not what you like • Google: Knows what you want to do, but not what you’ve done • Facebook: Knows what you like, but not what you buy • Television: Knows what ads you see, but not what you buy 37
Slide 38: Loyalty Management – Today
LOYALTY MANAGEMENT – TODAY IDENTIFY UNDERSTAND INFLUENCE 38
Slide 39: Loyalty Management – Tomorrow
LOYALTY MANAGEMENT – TOMORROW EXTEND CONNECT DELIVER VALUE THE LOYALTY THE DOTS AND RELEVANCE CYCLE 39
Slide 40: Retailers Increasingly Understand & Use Interactions as Data Points
RETAILERS INCREASINGLY UNDERSTAND & USE INTERACTIONS AS DATA POINTS 40
Slide 41: The Loyalty Cycle – Yesterday
THE LOYALTY CYCLE – YESTERDAY 41
Slide 42: The Loyalty Cycle – Today
THE LOYALTY CYCLE - TODAY = PURCHASE ITEM REDEEM EARN POINTS POINTS COLLECT POINTS TENURE ADVOCACY AIMIA INSPIRING LOYALTY 42
Slide 43: The New Data Values
THE NEW DATA VALUES TRANSPARENCY ADDED VALUE CONTROL TRUST 43
Slide 44: Conclusions
CONCLUSIONS • Customer data is a renewable resource • Interactions are becoming as important as transactions • Connect the dots to keep building relationships • Deliver relevance, value and trust • Airlines can have a head start by capturing multiple customer interactions during the travel journey 4
Slide 45: Thank You
THANK YOU [email protected] [email protected]