Combining CRM and Big Data to drive Loyalty
Vaughan Chandler, Head of Customer Insights at Qantas, shared their successful strategy for growth using CRM and applying Big Data at the recent eCircle/Teradata Connect conference. In this case study, I summarise how they are using data and innovation to understand their customers, drive loyalty and ultimately increase ROI.
Qantas is Australia's largest international and domestic airline, with many sub-brands to it's name including Qantas Loyalty.
With 9 million members, more than 400 programme partners, and 50% household penetration - Qantas Loyalty is extremely successful:
Focus on data and creating real-value through their communication; collecting data, segmenting and using technology, with targeted email campaigns is key.
Qantas started in 1997 as a Frequent Flyers programme for high flyers and in 2007 created their Qantas Loyalty, launching Frequent Flyer Store a year later to the mass market and not just for higher flyers - $660m rewards are redeemed annually.
Understanding customer needs and leveraging technology
By understanding their customers' needs and using data intelligence available to them, they entered the credit card market which generates 300m cash for the company with 9% growth year on year and partnered up with companies like Woolworths, to offer value added benefits which in turn has led to more flights being booked.
By using Innovation available to them, they also introduced Iphone Apps, Pre-paid cards and acquired online retail businesses.
One of their customer service initiatives using technology and data has improved job satisfaction amongst their Customer Service Managers and improved customer engagement - introduction of an IPAD for CSM on the aeroplanes.
They know in advance if there are any particular customers who need ' additional pampering', 'personal service if frequent flyer' or simply a new customer who flies with other competitors. They can also send information real-time as it changes. It's really helping retention and increasing profit - simple use of data and technology
Providing these tailored benefits to their customers and improving customer satisfaction, has also increased membership by 60% since 2006 and increased profit by 80% from 2008 - 2012.
One of their slides, illustrates their strategic application of using data across the entire organisation to make decisions which affect the consumer and business goals.
Qantas approach for success:
- 1. To have a customer strategy and focus on customer service.
- 2. To take a data-driven marketing approach
- 3. To manage customer interactions
- 4. Use Customer insight and analytics .Vaughan spoke about it as: 'Analytics is operations, prediction and change and not reporting'! Use data intelligence to predict how to respond to customer and the marketplace and it will show you the path forward!'. Qantas use insight to improve all channels across all touchpoints ie. website, customer service, direct mail shots , etc.
- 5. To take a pervasive management approach and not treat it as a project.
- 6. To have ' test and learn environments' for the business.
Driving change through the organisation?
To drive change throughout the organisation, they had to take an unorthodox leadership approach and ensure that their Senior Managers across all areas were very ' commercially results-driven', who are skilled commercial leaders and can articulate results into actionable insight and strategy.
For instance, their CEO manages the 'Insights and Innovations department which includes analytics rather than it being integrated into 'Marketing'. It also involved ensuring that their management team were using systems, embraced change and understand how to use systems and data as part of their decision-making.
'It's not about using complex systems but managing them'.
What does the future hold for Qantas?
- Using and understanding data, and building relationships is allowing them to expand other adjacent businesses.
- Their knowledge and successes has enabled them to help other companies: focusing on analytics, insight and loyalty management.
You can view Vaughan Chandler's presentation, to find out more.