Below are some key points from day 1 of the conference. For more info on speakers please see www.ftma.org

Day 1

1^st session – Panel – Paying with Miles

Key Points:

• Redemption transparency is key. Most members do not know the exact value of each mile or point so they are more inclined to use them when they see an offer that is of value to them.
• Innovative reward offers are now aspiration awards such as golden moments in Europe, vocation vacations such as ones that allow you to become a sports announcer for a day or brewmaster for a day, etc.
• Travel awards are more sought after and have a higher value. Other discount programs offer limited redemption options whereas frequent flyer programs offer many different redemption options as well as ways to earn miles such as through co-branded credit card purchases.
• Most retail programs make it easy to redeem even though there are less options. Keeping redemption easy will make it that much easier for the user, as opposed to having a complicated redemption matrix that requires an expert to figure out.
• People don’t often think of the value of miles when they are redeeming so it is not really thought of as a discount off flights, therefore the perceived value is higher when redeeming miles. For example, people would rather spend $1000 and get 1000 miles rather than spending $1000 and getting $10 cash back. Aspiration of travel is more enticing than getting money back or discounts.
• Other partnerships besides credit cards that can be used to make miles programs successful are gas and grocery cards and health industry or lifestyle transactions.
• Other innovative programs are ones that include trips to the moon for miles redemption, participating in an auction for miles where you bid for cool items such as art or meeting celebrities.

2^nd session – Social Media Strategies

Key Points:

• Main concern for FF program directors if someone badmouthing them on a forum or blog. Randy stressed that these forum/blog posters are the members of their FF programs and they are not Randy’s customers, so don’t try and sue him for something someone posted because you won’t win. Comments are property of the person who posted them and not of the site/person hosting the forum/blog.
• Social Media is not about protecting your brand. You cannot stop people from saying what they want to say on the Internet. The best you can do is try and solve their issue and turn them into a satisfied customer and usually they become great posters and advocates of your company and will tell others how well you treated them the same way they told them of any bad service or experience.
• The behavior of members has not changed just the environment has changed. Instead of the members just telling family and friends of their good or bad experience with you, now they can tell the whole world. If you use this to your advantage and simply provide great customer service online and offline then most of your members will be good advocates for you. Members will say what they want whether you are involved or not, so it is better to be involved and positively influence the situation.
• Where information is obtained for FF programs? 21% newsletters 10% word of mouth, 62% internet sites, 4% from online news, 2% from magazines with FF content.
• Which resource influences participation? 15% program newsletters, 23% newsletters, 53% internet sites, 5% online news, 2% magazines.
• Members measure you for lifetime value also.
• If you do not participate in social media you will be irrelevant. Before, if you did not participate online you became irrelevant, and later on if you did not participate in e-commerce you became irrelevant, the same will happen in you do not participate in social media.
• Social media enables co-creation of your brand, your members can become your biggest allies and brand advocates.
• As an example, Randy talked about how a poster of Flyertalk forum said that they were going to give 100% of their business to a company based on the customer service they received from an online rep. It would be impossible to run an advertising campaign to get 100% of the business from your members or potential members but through Social media and using it to provide the best service possible you can gain 100% of your members business, which is worth a lot, it is a great way to monetize your participation in social media.
• Social media is customer service uninterrupted. It is going straight to the customer instead of waiting for the customer to come to you with their issues and concerns. You should be helpful and not hypeful when communicating with your members online, especially on forums or blogs that you do not host.
• Forget about the long tail when confronting any customer and know when to diffuse a comment and when to just wait until the storm passes.
• There is great value in being authentic; the online truth detector is out. Encourage members to add or interrupt your conversation.

3^nd session – Hits & Misses

Key Points:

• Loyalty saturation is here. There are lots of programs in every vertical. Why do programs fail?
• Flaw #1, No bonusing, 85% of programs have a flat funding rate. No currency bonus to drive behavioral change. However, do not over bonus. Use tiers and targeted bonuses to differentiate. Require registration for bonus benefits vs rewarding cannibalizers.
• Flaw # 2, No soft benefits. Offer extra perks, vip status, etc. The average household signs up for 12 programs. 71% want extra perks, 15% feel they actually get perks.
• Flaw # 3, Single tender systems, fails to capture all transactions. Limits accrual velocity. When multiple payments were accepted large growth almost always happens in terms of higher enrollments and issue rates. Enroll the customer in a reward program then they have a vested interest and are more likely to apply for a co-branded credit card, not the other way around.
• Flaw #4, No dialogue, no surveys, auctions, or collection of data such as email addresses, contact info, etc. Collect preferences of members and listen to what they are saying, don’t just hear. Do not overbear customers with too much information at one time. Maybe ask one question at sign up, then another during a monthly newsletter, then another after yearly renewal to start building customer profile. Major error is not acting on the data you have already collected.
• Some bad reward programs (misses) include the following: A soft drink company required a large amount of points for a reward effectively making their customers having to buy tons of product in order to get prize, was not realistic. Another company had points or coupons on containers made to be thrown in the trash so the customer had to search in the trash, and a Canadian coffee company when they say their punch card reward system was not profitable they literally took the customers punch cards away and threw them in the trash in front of their best customers and did not offer them anything else.