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Corporate loyalty portals: Agile earn and burn for business travelers

Corporate loyalty portals: Agile earn and burn for business travelers

Understanding the stakeholder in a typical corporate travel transaction is a challenging task for an airline. A corporate customer's preferences may revolve around budget restrictions, predictability of expenses and additional services on offer, while the individual (employee) who will be travelling on the ticket may seek personal convenience and access to ancillary services even at an additional expense. Ultimately, the airline seeks to engage and satisfy both of them, thereby maximizing their own share of wallet as well as driving down the cost of future sales to the same customer.  

Corporate travel is an important segment for airlines, as I have explained in this blog post, and the indicators are strong that the market is waking up to the possibilities. Individuals – as travelers – lend themselves relatively easily to categorization, but the same cannot be said about businesses. Even within a company, there may be different kinds of preferences by job levels and roles, all of which would reflect upon a travel purchase. Another interesting point is the distribution by size in each geography. Demand in the US market is generated by large enterprises while in Latin American business travel is mostly an SME market. In short, a monolithic approach will not work – one size will not fit all.  

The corporate loyalty portal offers a corporate customer a consolidation of the key functions of corporate travel management in one platform. It combines the access to the relevant travel inventory with the capability to seamlessly utilize incentives and rewards. It can even extend to capture the corporate travel guidelines and traveler profiles to dynamically structure the offerings accordingly. A modular approach may be taken to ensure that the right sub-segments of corporate customers are targeted, so as to maximize profitability and relevance of the offering.

The prospective traveller is able to compare and settle on his/her choices strictly based on what matters to him/her, while staying within the scope of what his/her company (the corporate customer) has signed up for based on their own set of preferences. Decision making boundaries can be clearly marked and enforced, ensuring that both parties have their own reasons to maintain their loyalty to the airline brand. This helps airlines to streamline their loyalty program to target those potentially profitable sub-segments, which would otherwise be subjected to a sub-optimal experience along with the larger, undifferentiated customer base.

The unified platform enables the airline to acquire critical data from various phases of each transaction. This can help refine their offerings further, thus strengthening the loyalty proposition to each specific customer. Corporate customer priorities like pricing, credit requirements and long term budget controls can be understood and implemented in exchange for better predictability in their future demand – which, incidentally is the core purpose of a good loyalty program. Further, the quality of the partnership ecosystem - which can be enhanced through establishing a high level of agility - will act as key differentiator in the system.

Recognizing the customers' needs and opening up to their diversity is the first step towards effective loyalty management. The only question that could possibly remain is: Why is now the best time? All the key economies for the travel sector – especially the United States, China and India – are growing. Global business travel was a $1.2 trillion market in 2015 and it is expected to go up by around 33% to hit $1.6 trillion by 2020. "Slow and steady" would best describe it, because it is evident that there is no big boom expected over the next few years. This means there is some amount of additional revenue on the table, but it is going to go to those players who solve the complexities of the high potential corporate travel market. Moreover, it poses the fresh challenge of protecting your current revenue streams from the grasp of competitors who may be taking this approach. A compelling offer will certainly be driven by price and network, but the deciding factors may be superior services and technology.  

Click here for a refresher on why the corporate travel market is significant for loyalty management


Marcus Puffer is the Vice President of Global Loyalty Strategy at IBS Software and heads the Loyalty Line of Business. Prior to joining IBS, Marcus was General Manager of topbonus, which is airberlin's loyalty program and the second largest frequent flyer program in Germany. He successfully managed the corporatization of the program and its subsequent 70% sale to Etihad Airways. Prior to that, he spent a decade at Star Alliance in roles spanning Network and Membership Development. He started his career with Austrian Airlines with a focus on market research and long term network planning. Marcus holds a Masters degree in Social and Economic Sciences from the University of Vienna. He is based out of Graz, Austria.

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Sunday, 31 May 2020

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