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London Heathrow Airport has doubled the number of airport users in its loyalty programme and increased the average amount of money each one spends by 14% after putting the scheme on a cloud-based management system supported by the supplier.
Automation and access to more detailed information about customer behaviour have helped to transform the Heathrow Rewards loyalty programme, which previously was often seen as a “pain” to manage.
The programme, which rewards airport users for using retail facilities at Heathrow, was originally launched in 1999 under the name BAA WorldPoint. The aim is to generate revenue for retailers in the airport as well as the airlines that serve it through offers that attract repeat customers. The airport itself benefits from increased users, which means more revenue from the passenger processing charge paid by airlines.
All money spent at the airport, including at retailers, restaurants, bars, Heathrow Express and parking, are included in the loyalty programme and reward scheme members with points, which can be used to obtain discounts and other rewards. It is also linked to six airlines’ frequent flyer programmes and spending can be converted to air miles. More than 400 businesses take part in the loyalty programme.
Graham Bradley, loyalty programme manager for Heathrow Airport, said: “Anything we can do to drive customer experience and other forms of income subsidises customer charges, and that make airlines more profitable, which allows them to expand their operations from Heathrow.”
But the programme was proving difficult to manage and was nowhere near its potential. Between 1999 and 2013, the company was using swipe machine technology to manage the scheme. All retailers were given the machines, which were owned by the airport, and trained how to use them. Retailers would swipe customers’ loyalty cards and the card number and total spend data would be captured. This would then be transferred via a telephone line to a third-party data processor.
“The machines were not very user-friendly and the setup was clunky,” said Bradley. “The process was very complicated and slow and seemed a bit of a pain to many involved, when the point of a loyalty scheme is to improve customer service.”
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The data collected was very limited, with the only usable information concerning how much was spent at a particular retailer. This meant there were no details about customer habits and preferences, which limited the airport’s ability to make appropriate offers.
Bradley said there were also regular delays caused by problems with telephone lines. This was exacerbated by the fact that retailers in the airport change frequently, leading to regular installation of new and replacement telephone lines.
Bradley said the airport wanted to remove the “clunkiness” of the system and the need to load up retail partners with more equipment. “We want to make sure that any business that joins the programme can be set up very quickly and start rewarding points straight away,” he said.
The airport also wanted to use the latest technologies, such as automation, to speed up the system and mobile apps to improve customer engagement.
In 2013, Heathrow chose cloud-based customer loyalty management software from Poland-based Comarch as a managed service. Its entire loyalty scheme sits on the platform and all customer interactions are managed throughout the life of their memberships.
Bradley said the Comarch technology did not really replace anything because the scheme had very limited capabilities before the software and service were implemented.
He said that in the four years it has been in use, there have been no performance issues, the number of customers in the programme has doubled, and the average amount spent per member, per airport visit has increased by 14% to £49. Automation has enabled it to run many more offers, he added.
Another key benefit is the real-time nature of the service. As a customer is flying, the air miles they are gaining can be transferred to the Heathrow rewards programme and then be used when they arrive at the airport.
It took six months to move to the Comarch system, and the main challenges were around transferring customer data and keeping partners up to speed. “Like any of these programmes with millions of members, there will be challenges around transitioning customer data from previous systems,” said Bradley. “Also, with 400 partners, there is a challenge keeping them up to date.”
All the data sits in the cloud and is hosted by Krakow-based Comarch. .............................................................................................. ....................................................................................................