Last week, the Direct Marketing Association named United Airlines and Macy’s joint marketers of the year. Initially, the United nod had me scratching my head. But after reading a bit more of the background and realizing how different and specialized the email are that I receive now post-merger, I pretty much agree. They still have a lot of customer service issues to tackle, but on the pure marketing side, they’ve achieved many successes.
First, here’s the blurb from DMA’s press release about United:
With the merger of United and Continental Airlines, United Continental Holdings has become the world’s largest airline, and now operates the biggest loyalty program of its kind, MileagePlus. This merger required combining 90 million accounts and 30 years of transactional history into a single database. But United’s Managing Director, Loyalty Marketing & Analytics Mark Krolick and his team took the data initiative even further by launching a massive marketing and Customer Relationship Marketing (CRM) campaign. This process included launching a highly complex series of communications to guide members of the two pre-merger programs through the combination of the airline operations and the launch of the newly revamped MileagePlus loyalty program. As a result, United gained an unprecedented understanding of its customers (both inside and outside its loyalty program), and the ability to leverage that data to drive revenue and change the customer experience.
United’s partner in helping combine the separate databases was Acxiom, who published a case study including some interesting nuggets of information. Here’s the Acxiom release, which has the link to the full PDF case study. Some of the highlights:
- Active flyers enrolled in the loyalty program spend, on average, significantly more than non-member passengers annually (no surprise, really).
- Having a valid email address on file for non-members makes them 60% more likely to convert to a member.
- United has more than 1 million valid email addresses for non-members.
- Richer non-member data helped convert 4% to members – more than ever before – for “tens of millions in additional revenue.”
But what I found even more interesting from the report were the following statements (all bolding mine).
Given the untapped revenue opportunity within the airline’s large universe of non-member passengers, United is now heavily focused on growing MileagePlus. To do so, the group must identify millions of non-members, understand them better and be able to reach them.
This sort of confirms the rumors I read about on Flyertalk and heard elsewhere where United executives were mentioning they’d rather have a someone who hasn’t flown in first class before get an upgrade over elites as their experience might convert them into long-term United fliers. While some think the “tens of dollars” upgrade issue has been resolved (where all elites on the upgrade list clear before reduced price upgrades are sold at check-in), I think it’s still alive and well.
Another statement from the report:
On the marketing side, United is adding dimension to member records with demographics and other segmentation data, enabling personalized offers not possible before.
Hence, the emails we all receive now after booking a trip mentioning things such as “how about a hotel in (destination)?” But also, I have a feeling we mileage runners are now more closely being monitored and given a particular ‘segmentation’ flag.
The following blurb from the study is pretty cool – has it happened to you?
At several test airports, United identified all MileagePlus members traveling each day that would hit a program milestone, such as reaching the Premier Silver, Gold or Platinum level or 1K level. Agents were given thank-you notes and instructions so they could congratulate passengers during the boarding process. Not only does this change a routine process for customers but for agents as well.
The next bit of info adds support to the fact United is aggressively favoring the high-spend traveler, regardless of MileagePlus membership, furthering the focus on transactional loyalty vs. long-term patronage:
“For so long, the norm in our industry has been, ‘Your frequent flyer data is your customer database,’” added Michelle Brown, director of strategy & analytics, MileagePlus. “For the first time, we have true analytics on the number of people flying with United, flying United repeatedly, and buying our best products. That’s changed the mindset in the company when it comes to customer data.”
Finally, under the “looking ahead” section, the report says:
United is now expanding its CRM efforts to more airports and customer segments. It’s also putting in place methods of collecting more data from non-members and applying behavioral information from Acxiom to understand more about non-members. Customer intelligence will fuel decisions on everything from routes to aircraft types to the menu for onboard food. And critically, it will also allow the airline to recognize missed opportunities and make a point of acknowledging them. The ultimate goal: give every United team member who touches customers the information they need to serve customers better.
I’d also have to guess the behavioral information is being captured and applies to MileagePlus members, too, of course.
Perhaps most interesting is the fact United itself didn’t issue a press release announcing its achievement with the DMA. I’d think they’d want to promote every positive post-merger success given their recent struggles. Do they want to hide something?