Personalization and gamification. If you’re running a loyalty program these are key considerations that drive member engagement and incremental revenue generation. It is hard to judge the results from the outside looking in, but United Airlines opened up recently at the World Aviation Festival in London and other events, sharing the success of its MilePlay promotion.
A decade or two ago promotions were spectacularly generic. Programs picked a couple action goals and set triggers in place that would hopefully drive that behavior. But the entire population of the program was included in the promotion. As the technology evolved so did the targeting abilities. Subsets of the membership could be selected for participation. Most recently the programs have created far more personalized offerings. The technology stack allows for nearly limitless options in terms of what goals each member must reach to score the promotion goals.
MilePlay builds on that personalization platform. The company started small to make sure it had the tech correct, but quickly expanded. It now targets some nine million members of the MileagePlus program with unique conditions and payouts. And it works. United executives cited a $60 million top line benefit from the program in its first year, revenue induced directly through the actions the carrier targeted passengers with.
During the most recent quarterly earnings call Linda Jojo expanded on that view, “[I]t’s ultimately about giving the right offers to our customers to get them to want to fly us. And so we are thinking on all different ways to leverage where our customers want to go and then create very targeted offers. MilePlay is a great example of that where we are using gamification to get customers to really try things that they haven’t tried before – whether that’s a new product or a new location – and then rewarding them with currency that is our program.”
We can see their propensity to hold the credit card or to join the club or to fly more often, or to buy higher fares has all increased versus the previous year by significant amount. That’s all coming together and … the digital technology used to make all that happen is just phenomenal.”– United President Scott Kirby
The first $60 million in new revenue is an impressive number, but that’s not what gets Jojo excited. She is much more focused on the repeat behavior that MilePlay hopes to induce. Get a customer to buy up to Economy Plus a couple times in a quarter, for example, and the bonus points paid out for meeting that goal might be a wash relative to the incremental revenue generated. But when the consumer sees value in the product during that “motivated” experience and keep buying it that’s where the company really starts to win.
While Jojo did not provide any specific numbers on that front during a recent conversation on the sidelines of the company’s Flight Plan 2020 Media Day event in Chicago, she was clear that the company is very satisfied with the results of the program so far. This is the type of offering that MileagePlus members should get used to seeing from the company going forward. The days of generic earning promotions are quickly coming to an end.
For United – and other airlines or loyalty programs – it is not the concept of personalization that is new. But the ability to effectively implement it is. The Intercontinental Hotel Group started similar promotions several years ago and continues to refine the offerings on a regular basis. Other travel-related loyalty programs are also experimenting with similar.
But Jojo does not compare United’s offerings to other travel companies. She referenced the Starbucks program instead. And, while admitting that the turnover on promotions will be far less frequent – convincing someone to buy an extra two coffees each week is far easier than convincing them to buy two extra plane tickets in a month – the concept is very similar.
And, for United, the improved technology underlying the MileagePlus program is starting to deliver on these opportunities.
More from United's Flight Plan 2020 Media Day event
- What to expect on board as United’s new CRJ550 takes flight
- United Airlines’ 50-seat RJ refresh will not include IFE/C…Yet!
- MilePlay: Inside the numbers of United’s loyalty gamification & personalization push
- Does hourly service a shuttle make??