Presented: 2009-10-23 Airline Information Mega Event @ Huntington Beach

1. ©2009SatisflyLtd
Huntington Beach, CA
October 23rd 2009
Airline Information Mega Event
Sergio Mello
CEO
customer intelligence has its place
MEGA EVENT 2009
Better Managing Your Loyalty Program
Improving your member experience:
the pros and cons of using Social Media

2. ©2009SatisflyLtd
customer intelligence has its place
MEGA EVENT 2009
Better Managing Your Loyalty Program
Improving your member experience:
the pros and cons of using Social Media
FFP today
Social Media
Conclusion
SATISFLY

3. MEGA EVENT 2009
The missing part of the experience:
the seat neighbour
Airlines invest to enhance every aspect of the customer experience, but the seat neighbour
has never been controllable.
SATISFLY provides a unique and complete solution to fill this gap.

4. MEGA EVENT 2009
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
A
B
C
D
E
F
Social NetworkingWork Alone Business NetworkingRelax Alone
& INTELLIGENT SEATING
SATISFLY provides a patent-pending Intelligent Seating service to maximize
compatibility among seat neighbours, by catering to each passenger’s behaviour preference
and neighbour profile.

5. MEGA EVENT 2009
1.
Intelligent
Seating
2.
Social
Shopping
FFP
Database
3.
Real time
updates
& SOCIAL MEDIA
INTELLIGENCE
INTELLIGENCE
INTELLIGENCE
SATISFLY leverages Social Media to collect Customer Intelligence for two purposes:
1. Improve the Intelligent Seating effectiveness;
2. Stimulate demand through Social Shopping;
3. Update customer data in the airline FFP and CRM.

6. ©2009SatisflyLtd
customer intelligence has its place
MEGA EVENT 2009
Better Managing Your Loyalty Program
Improving your member experience:
the pros and cons of using Social Media
FFP today
Social Media
Conclusion
SATISFLY

7. MEGA EVENT 2009
• Points & miles
• Tier benefits
• Rewards
• Experience consistency
• Engaging staff
• Brand enthusiasm
RETENTION LOYALTY
Frequent Flyer Programs
Material drivers Intangible drivers
SOCIAL
MEDIA
SOCIAL
MEDIA
FFPs today achieve results by using two types of drivers: Material and Intangible. Material
Drivers aim to improve customer retention while Intangible Drivers foster loyalty.
In this sense, Social Media is NOT a ready-to-use product; instead it is a
communication channel which must be handled with care in order to improve both retention
and loyalty.

8. MEGA EVENT 2009
THE DOG
• Man’s best friend
• A loyal companion
In order to draw a simplified example of the FFPs’ retention dynamics, we chose an actor
known for his fidelity to represent the customer: the dog.

9. MEGA EVENT 2009
Retention basic principle
You fly me,
I give you a
bone
A
DO UT DES
The dog sticks to the same owner because he receives food.
In the airline business, the customer receives incentives and material benefits for choosing
airline A.
As the Romans used to say: “Do ut des”. This relationship is based on this principle: “Give in
order to receive”.

10. MEGA EVENT 2009
I fly for bones
The dog becomes a constant presence at the owner’s household.
And the frequent traveller is eager to receive benefits and rewards.

11. MEGA EVENT 2009
New factor: competition
You fly me,
I give you two
bones
B
AN EXPENSIVE GAME
What happens when many dog owners adopt the same strategy to feed the dog? The dog
decides to show affection to the owner who feeds most.
In the same way, airline customers are inclined to choose airline B, which provides more
rewards than airline A.
As a consequence, airlines enter into a competition that leads to an expensive game, with
higher cost and smaller results.

12. MEGA EVENT 2009
I’m a
frequent flyer
In this game, the winner is the dog, turned into a spoiled domestic pet.
For the airline, this is when the customer becomes accustomed to higher standards of service
and continually raise their expectations.

13. MEGA EVENT 2009
New factor: transparency You fly me, I give
you three bones
A
B
C
AN UNSUSTAINABLE GAME
The internet has introduced many benefits to the airline industry, but transparency is
definitely not one of them.
The Airline customer faces a variety of options and in a snapshot can base his choice on
reviews, benefits and price comparison.
In this unsustainable game, the airlines have less control of a customer's purchasing
behaviour.

14. MEGA EVENT 2009
I’m a
tech-savvy flyer
The control in now in the hands of the consumer, who knows what he wants and how to
achieve it.

15. MEGA EVENT 2009
New factor: downturn Sorry,
no more bones
A
B
C
A BAD EXPERIENCE
Eventually economic cycles lead to a downturn. This is the moment when all airlines fail
to meet customers’ expectations because they can no longer afford the costly game of the
benefits.
The dog is disappointed by the bad experience and will feel abandoned.

16. MEGA EVENT 2009
Where are my
bones?
THE CUSTOMER IS NOT YOUR FRIEND
The efforts airlines put into feeding the dog bones are revealed to have been in vain when the
food supply cannot be sustained.
Airline customers do not forgive as easily as dogs when their expectations have not been
met, so it is dangerous to continue to repeatedly compete by constantly increasing benefits.
Reward programs provide short term benefits and sound ancillary revenue models, but
cannot cater to the deep-hearted, enduring customer loyalty.
Airlines must remember that the customer is not your friend and Social Media cannot turn the
paradigm around. But it can enhance communication and ultimately boost loyalty and
retention.

17. ©2009SatisflyLtd
customer intelligence has its place
MEGA EVENT 2009
Better Managing Your Loyalty Program
Improving your member experience:
the pros and cons of using Social Media
FFP today
Social Media
Conclusion
SATISFLY

18. MEGA EVENT 2009
Social Media
Social Media is no longer a future trend. It is becoming the most important commercial
communication channel.
To give you an idea of its adoption rate, in October, the Facebook user base reached the size
of the US population.

19. MEGA EVENT 2009
US fastest growing demographic:
Gen X and Baby Boomers
Slowest growing region:
China
Social Media
The world of Social Media is composed of various platforms catering to different user
segments conquering every demographic.
However, for a global business such as the airlines, we must note that political factors play a
major role in its development. For example P.R. China only allows domestic social
networking platforms to thrive, while some conservative countries still restrict access to the
most popular sites.
As such, the use of Social Media must be tuned regionally.

20. MEGA EVENT 2009
Purchasing behaviour
SOCIAL
SHOPPING
Advocates
Word-of-mouth marketing, trend-setters and advocates always existed, but today Social
Media empowers them with an unseen influencing potential.
Every sector of an airline’s marketing strategy must take into account and leverage Social
Media to maximize the Social Shopping phenomenon.

21. MEGA EVENT 2009
“Democracy is the dictatorship of the minorities”
Dr. A. Stanchi, economist
Democratization of media
HIGH RISK
Social Media allows everyone to be heard.
The democratization of the media brings the advantage of empowering advocates’ influence,
but the conversation is not moderated.
When the tone becomes sour, Social Media turns itself into a double edged sword. In other
words, when democracy is stretched to the extreme by empowering every minority, even one
voice can veto the decisional system.
It is a game that cannot be avoided, because the consumers' voices are already in play. The
airlines must be strategic and join the game wisely, aware of the high risks involved.

22. MEGA EVENT 2009
Social Sentiment Analysis
REAL TIME TRENDS
Baby born onboard AirAsia flight
This one is for the analysts, Social Media consists of a constant stream of information. It
is essential to turn this feature into the airline’s benefit by implementing real-time analysis.
The four graphs above represent the quantity and nature of these keywords on Twitter:
SouthWestAir, SAS, AirAsia and JetBlue.

23. MEGA EVENT 2009
Gross National Happiness
QUANTITATIVE METRICS
After playing a major role in the modernization of the kingdom of Buthan, Gross
National Happiness is now measurable on Facebook.
New quantitative metrics become available from day to day. They enable airline analysts to
discover previously unknown customer insights.
The airline's duty is to use such insights to enhance marketing campaigns.

24. MEGA EVENT 2009
CTR & ETR
KPI
Insights
Page content that appears in users’ news feeds
measures click-through rates (CTRs)
and engagement rates (”ETRs”)
Now that Facebook offers features for measuring pages’ activity and user engagement, any
airline has the tools to set basic Social Media campaign targets.

25. MEGA EVENT 2009
Old segmentation
Until today market segmentation has played a key role in FFPs. However, the amount of
segments were limited by a shallow, obsolete customer knowledge and primitive technology.

26. MEGA EVENT 2009
Deeper segmentation
ONE-TO-ONE
Today, technological barriers have been overcome and Social Media allows you to know your
customers in a deeper more relevant way. Just by engaging and listening, one can gather
enough customer intelligence to abandon the old segmentation marketing model in favour of
a one-to-one system, where every customer is different from the other.
Such in-depth knowledge allows unprecedented customization of service, recognition and
proposition tailoring.

27. MEGA EVENT 2009
Engagement
What does the customer want?
60 Million
Monthly Active Users
FarmVille is the most popular Facebook game
Online engagement can be created with a relevant and useful application or by means of pure
entertainment.
This is why video content spreads virally and why a no-brainer game like FarmVille achieves
incredible levels of engagement. The airlines who undertake Social Media projects shall bear
in mind that their product must be either useful or entertaining, otherwise it will not succeed.

28. MEGA EVENT 2009
Airlines on Social Media?
AIRLINES ?
Pizza Hut offers a an
application to order pizza
without leaving Facebook
Some airlines have pioneered Social Media with microsites and communities, but like
everywhere else in business, simplicity wins: Pizza Hut developed a Facebook application to
order pizza.
Facebook is already the most established Social Media platform and allows third parties to
provide applications and pages at no charge. The benefits of using these platforms are that
the users are already there and they trust the environment.
Why require customers to start a new journey on a new platform?
Why not ride the existing wave of Social Media? Developing a Facebook application has a very
low initial cost, yet no airline has integrated booking features in Facebook - yet.

29. ©2009SatisflyLtd
customer intelligence has its place
MEGA EVENT 2009
Better Managing Your Loyalty Program
Improving your member experience:
the pros and cons of using Social Media
FFP today
Social Media
Conclusion
SATISFLY

30. MEGA EVENT 2009
Leverage advocates
Customers are NOT your friends
Conclusion
In conclusion, Social Media is not a standalone application. Airlines need to embrace Social
Media as a communication channel and master its use to enhance the customer experience
within an overall marketing strategy.
Be aware that customers are NOT your friends; material drivers only help FFPs in the short
term, whereas real loyalty is achieved by intangible means.
Even though Social Media can influence purchasing behaviour and sustain retention and
loyalty by means of engagement, its ultimate role is to provide fresh customer intelligence.

31. MEGA EVENT 2009
Leverage advocates
Evolve to one-to-one & real time marketing
Customers are NOT your friends
Conclusion
Innovate
Social Media is a fast-changing game, where first comers get most of the benefits. Results
can be achieved by selling what a customer wants, when he wants, where he wants.
Current FFPs must open their doors to new streams of member profile data updates and
predictive intelligence in order to implement this sort of real time, one-to-one marketing.
Recognition will be enhanced by the airline’s degree of individual customer knowledge, as
compared to merely including him in a group.
Considering the low entry barriers, not investing in innovation is an opportunity cost.Social
Media is a fast-changing game, where first comers get most of the benefits. Considering the
low entry barriers, not investing in innovation is indeed an opportunity cost.

32. MEGA EVENT 2009
Prepare plan B
Leverage advocates
Develop a sustainable strategy
Evolve to one-to-one & real time marketing
Customers are NOT your friends
Conclusion
Innovate
Due to the highly viral nature of Social Media campaigns, operations may need to scale
up quickly. Using Social Media as a standalone product may prove detrimental when the size
of the operation inflates the costs.
Social Media is meant to be a communication tool only, and when used sustainability must be
the first concern.
Like everywhere else in business, airlines must have an alternative in mind, shall their
Social Media strategy fail.

33. ©2009SatisflyLtd
sergio.mello@satisfly.com
Thank you
customer intelligence has its place
MEGA EVENT 2009