Who wants to be a millionaire? Lots of Virgin Atlantic Airways' passengers it seems, if the phenomenal success of the company's Internet-centric campaign Global Miles Million Air, is anything to go by.
The Internet-based membership acquisition drive by the airline set-up by Richard Branson with the "come to bed" TV adverts attracted thousands more fans of Virgin's frequent flyer loyalty scheme, Flying Club, than traditional, paper-based advertising and marketing had done, and at a fraction of the cost. The incentive to passengers was the chance to win one million free Flying Club miles.
The campaign was carried out across Virgin Atlantic's six regions (US and the Caribbean, China, Japan, South Africa, UK and Europe) incorporating direct mail, a microsite and online advertising. Its impact was immediately visible and provided more than a significant return on investment.
"It was a huge, brave step for us to implement a truly global online campaign," says Seema Kotecha, direct marketing manager at Virgin Atlantic.
"It was the first Internet-centric campaign Virgin Atlantic had launched and the results prove that it was the most successful we have ever run. Between 5 and 24 July 2000 more than 13,000 new members enrolled through the Internet, immediately activating their accounts and 10% of existing members also activated their online accounts.
The cost of acquisition [per person] through banners was a company record with an average response rate of 3.72%. The cost per acquisition for all online members from the Global Miles Million Air campaign was £2.74 - a company and maybe even a European record."
The success of the campaign made it a worthy winner of Computer Weekly's E-business Excellence Marketing Award 2000, sponsored by Shopcreator.
Virgin Atlantic had clear business objectives for its Internet marketing initiative. It set out to collect e-mail addresses from existing and prospective Flying Club members, migrate more of its offline members to an online relationship with the airline and clean-up the company's existing e-mail database.
"As we develop our online communications plan as part of our overall customer relationship management strategy, it is paramount that we maximise opportunities to collate the e-mail addresses of our existing Flying Club members and prospects," says Breda Bubear, head of advertising and e-commerce at Virgin Atlantic.
"With the increase in Internet service providers, customers hop from one service provider to the other searching for the best deal and in doing so change their e-mail addresses. This poses a huge threat to our digital communications strategy. It is vital that we ensure our database of e-mail addresses is kept clean," Bubear explains.
But most importantly, Virgin wanted to lock existing Flying Club members into its programme by targeting them with more personalised and individualised communications and special offers relating to their buying habits, interests and requirements.
It also wanted to acquire and develop a database of online prospects with whom it could nurture an ongoing relationship through targeted leisure fare offers. And, in achieving these two main goals, Virgin Atlantic had a third but vitally important objective in mind: to combat competitor activity.
"Competition for loyal travellers is extremely intense and Virgin Atlantic is constantly looking for innovative and effective ways to recruit new members to the Flying Club," says Kotecha.
Last summer only 3.5% of members in Virgin's Flying Club database who had been active in the previous 18 months had also registered on the airline's Web site to activate their online accounts.
Once an online account has been activated, the customer gets instant access to their personal account details wherever they happen to be in the world. They also receive updates on product and service information and special offers via an online newsletter. It all makes for a closer relationship with Virgin Atlantic, says Kotecha.
Competition between the airlines for the hearts and minds of frequent and lucrative business travellers, who accumulate the most air miles, has never been hotter. Multiple airlines share popular routes and passengers are becoming more demanding, expectations heightened by the cheap flights offered at the economy and tourist end of the market by Easyjet, Ryanair, Buzz and Go.
Adding value to a flight ticket in terms of comfort and service quality, and loyalty awards in the form of discounts on goods and services and free flights, have become vital choice differentiators. But with every airline offering attractive extras, it is hard for any one of them to stand out from the rest even if their deal is the best on the market.
Virgin Atlantic turned to the Internet to get noticed, running the Global Miles Million Air with support from offline marketing. Since then it has also embarked on a programme of development to radically enhance the existing benefits of registration for both new and existing members.
The Internet offered the ideal opportunity to create a more direct and personalised channel of communication with Virgin's existing online Flying Club passengers and prospects. Throw in the chance to win a million free Flying Club miles and the combination was bound to be a winning ticket.
All people had to do was to register online to earn 1,000 bonus Flying Club miles and to be entered into the global draw to win the million miles. The draw was to celebrate the 10th anniversary of Virgin's frequent flyer programme.
The airline's Global Miles Million Air campaign was only open to existing and new Flying Club members who had Internet access and e-mail addresses. E-mails were sent out to members who had registered online but may not have activated their accounts, telling them of the campaign.
Flying Club members who had not registered online in response to the campaign were sent a postcard telling them that their 1,000 bonus Flying Club miles were theirs to collect as soon as they registered online. Some of this last group had registered once before - for an earlier free tickets offer. In case they thought they did not need to again, they were sent another e-mail. Cold prospects were acquired through banner ads and Virgin ground staff signing up new members as people checked in.
The mechanics of this ambitious and pioneering Internet campaign were not finalised until very late in the day. "We already knew the mechanics of the online enrolment form, so we prepared that functionality in advance," Kotecha adds.
"However, creative design and construction of the microsite and banners could not commence until 3 July, leaving us two and a half days to develop, test, sign off and launch!"
The postcards were mailed out on 4 July. The next day the e-mails were sent out to various groups, airport activity commenced and the Global Miles Million Air microsite was launched in the UK.
The microsite went live for the US and Caribbean, Japan, Hong Kong and China, Greece and South Africa on 7 July.
In addition, Virgin Atlantic ran animated banner ads on travel, business and lifestyle Web sites, including Escape-routes, Bargainholidays, Yahoo!, Excite and Ask Jeeves.
To measure the success of the operation, all registration forms were both media- and campaign-coded so that Virgin could identify exactly which groups were prompted to respond and by what online messaging.
In addition to meeting its initial business objectives, the campaign succeeded in collecting the dates of birth of 85% of online customers - a key security-strategic requirement.
However, there were also lessons learned, says Bubear. "The results taught us that we needed to ramp up our bandwidth to ensure that we are prepared for the increase in volume of online Flying Club members. To facilitate this, we increased our server capacity and prepared for site migration, added 'call me' buttons on the enrolment part of the site which integrates directly with our call centre, and prepared for wireless application protocol enrolment."
The campaign also revealed invaluable insights into the needs of travellers who have Internet access. "We recognised that online prospects are not the same as our offline potentials," says Bubear. "They differ in terms of expectations, psychographics and attributes. Our online audience is far more directional-led - they come onto our site for a purpose, get the information they need and then leave."
Armed with this knowledge, Virgin reviewed its online registration forms for its customer loyalty programme, cutting out unnecessary questions to speed up the enrolment process.
The form was redesigned to request the bare minimum of information to avoid scaring off prospects. To register, people just provide their name, e-mail and mailing addresses, some preference on flying - for journey purpose - and date of birth for security purposes. The minimum data set is stored as a unique customer record in Virgin Atlantic's database.
Once registered as Flying Club members, people can update and add to their profiles via an intuitive user interface that enables multiple stage/tiered enrolment.
"In terms of customisation and personalisation, I think this approach is forward-thinking and sympathetic to the consumer," says Bubear.
"Travel, in particular, is not a predictive habit. For the sake of registration purposes, you may opt that you dream of travelling to the Caribbean, but for how long would this statement remain true, if true at all?
Personalisation has got to be at the power and control of the user - corporations and back-end systems which continue to push unwanted, irrelevant and 'assuming' content to their audiences will lose out."
Bubear adds, "We developed our online Flying Club strategy to ensure that we keep our customers interested and move beyond the 'bribery-mode' into the 'learning mode'. The key to this will be learning as much as we possibly can from our customers and focusing on customisation, personalisation, and enhanced functionality."
Bubear concludes, "The results of this campaign gave us enormous confidence that we have an interested online audience who want to have a two-way relationship with us. We have re-aligned our strategy as an airline to embrace this and are growing our Flying Club entry-level tier with the growth of the airline."
Virgin's business objectives
Virgin Atlantic had clear business objectives for its Internet marketing initiative. It set out to:
- Collect e-mail addresses from existing and prospective Flying Club members
- Migrate more of its offline members to an online relationship with the airline
- Clean up the company's existing e-mail database.
- In a campaign lasting barely three weeks Virgin Atlantic attracted more than 13,000 new members to its frequent flyer loyalty scheme, Flying Club, and persuaded 10% of existing members to activate online accounts
- The cost of acquisition [per person] through banners was a company record with an average response rate of 3.72%. The cost per acquisition for all online members from the Global Miles Million Air campaign was only £2.74
- The campaign succeeded in collecting the dates of birth of 85% of online customers - a key security-strategic requirement
- The campaign also gave invaluable insights into the needs of travellers who have Internet access. For instance that online prospects are not the same as offline potentials: they differ in terms of their expectations, psychographics and attributes
- For minimal cost Virgin Atlantic has established an interested online audience of customers who want to have a two-way relationship with the airline.
Virgin's Flying Club
There are three levels in the Flying Club, designed to match passengers' travelling habits and requirements with different benefits. The first tier is flying club red. Regular travellers can aim for flying club silver and, ultimately, gold.
Benefits to all tiers include a membership pack and regular mailings so that customers are informed of exclusive special offers. All online members get free access to the Virgin Atlantic Financial Channel powered by Bridge Information Systems, providing up to the minute news, stocks and financial information from around the globe.
Benefits for passengers include:
- Priority wait listing
- 20% discount on long-stay airport car parking
- Flying Club global assistance - for travel and health advice, assistance with a lost passport or other emergencies and help with airline and hotel bookings, car rentals, theatre, sporting event ticketing (with no booking fee) and a golf information service - all year round
- Complimentary First Class upgrade on the Heathrow and Gatwick Express trains
- Dedicated low-rate call rate telephone enquiry number
- Upper Class check-in whatever class customers travel in
- Guaranteed economy seat on any flight
- Invitation to Virgin Clubhouses around the world
- Revivals lounge at Heathrow, available only to Upper Class passengers.
Source - www.virgin-atlantic.com