I’ve spent today alternating between the two streams at this conference in Los Angeles, sometimes sitting in the frequent flyer presentations, and other times listening to the ancillary revenue track. Here are some of my observations from Day 1.

Craig Landry from Aeroplan did a great presentation, and I’d love to get my hands on his slides as they were overloaded with good stuff – probably too much info for a presentation, as he was moving through them quite quickly. He confirmed something I have suspected for a while by saying that the perceived value of airline loyalty programs across the industry is in decline and that non air programs are really giving more and more value in the eyes of consumers. A real wakeup call for the industry not to let such an important part of the airline suffer from lack of focus. He also went through a very good list of nine trends that are are guiding future developments, and finally he made a great point in emphasising the importance of integrating data from various sources into the loyalty system.

That last point from Craig dovetailed nicely into the next presentation from Simon Hay of Dunnhumby. These guys are retail specialists, with only limited credentials in the airline space (eg. BA, Virgin Altantic, Expedia) but I had to agree with what a senior executive from one airline loyalty program was saying to me afterwards when he expressed what a great idea it was inviting Simon; airlines have a lot to learn from retailing best practice, especially in more intelligent use of data for better understanding and predicting customer behaviour.

Predicting customer behaviour and segmenting passengers was a topic taken up by Freek van Essen who is Head of Database Marketing at AF-KLM’s Flying Blue loyalty program. Statistic of the day had to be when he claimed that 60% of the highest value customers were not in the top frequent flyer tier! I find that very hard to believe, but he had done some serious stochastic modelling that was way to complicated to argue with, so I’ll just assume he is correct. Using their predictive models he is calculating NPVs on customer value segments and possibly even individual customers – sounds kind of like a business case for a new passenger. Very impressive to listen to, although no way one could get a really good grip on all of the complex ideas he was prsenting in such a short space of time.

Rick Seaney from Fare Compare did a good presentation on Twitter. What shocked me was the amount of people who put their hand up when he asked who used Twitter, as it was most of the room. I suspect if we dug into it a bit deeper we’d find most were only followers rather than generating any tweets; in which case I’m not sure I see a huge difference in just having a good old fashioned email account, especially if you have a smart phone where you get email instantly no matter where you are. Rick gave a big plug to the book Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers and now I’m curious to find a copy and read it sometime.

So after all that praise, now it is time to be a little less complimentary. On a previous occassion I made an obscure recommendation on how to improve a panel discussion, but the guys organizing this conference really don’t do panels well at all. They stick way too many people on stage, and the moderators either are not able to engage the panel members well enough, or more likely they just find it impossible to work with such an unwieldy format. Apologies for the horrible quality of the photo below taken with my phone, but I use it to illustrate the point.


Loyalty social media panel


The topic was a strange one to being with: Loyalty system showdown, what are programs demanding and how are systems handling customer centric integration and emerging social networking initiatives. From left to right in the picture are Marcin Kosciak from Comarch, Dave Avant from Amadeus, Patrick Grubbs from Oracle, Len Lubbe from Loyalty Plus, Rob Thorne from IBS and Hakan Unlu from Hitit. Great range of panelists, but way too many to do anything other than what always happens – the moderator asks a short question, and the microphone goes from one panelist to the next, to the next, etc. Virtually no interaction, so it contains no dynamism, and you end up getting close to six people each just doing a mini presentation.

Here is what should have happened. Firstly, get someone from an airline loyalty program (maybe Craig Landry from Aeroplan, or Phil Gunter from Virgin Blue’s Velocity program and who is here in LA) to be the moderator. Secondly, restrict the panel to two loyalty vendors, or three at the absolute maximum. Thirdly, put the moderator in a chair rather than standing up; then the format becomes more like a chat show. Fourthly, choose a more narrow topic and really drill into the details. Fifthly, give each person their own microphone as passing the mic kills any spontaneous interaction. Finally, and this should happen naturally if the first five are done, make sure the moderator doesn’t just ask questions but actually pushes back on the answers given by the panellists to ensure follow-up questions are asked and topics raised are properly explored.

Two of the panellists in the photo above really could have been given their own slot on social networking; and with my suggested format above, participated in what I’m sure would have been an excellent panel. Rob Thorne hit the nail on the head when he bought everyone back down to earth with his reminder not to overlook email, and Patrick Grubbs really answered the question on measuring social media well, albeit by pushing a product from Oracle. Get these two guys on a social media panel with a good moderator, and it might just be the highlight of the conference.