“There’s no point having data unless you do something with it…”

Adrian Hado, head of insight and analytics at Avios, talks to Michael Nutley about how the loyalty scheme is perceived by its 2 million UK members less than a year after it rebranded from AirMiles

Adrian Hado

Marketing Week (MW): You joined Avios in February, following the rebrand from AirMiles in late 2011. What was the mood like

among customers?

Adrian Hado (AH): Probably quite confused. It’s a new brand, so customers don’t know what it is. The biggest thing we had to do was educate customers.

We’ve also tapped into a younger customer base. They’re very online, very techie, very social media savvy. The proposition will still appeal to those who were involved before, but we’re now able to grow our customer base as well as opening up new markets.

MW: Is there a significant difference in churn or engagement before and after the rebrand?

AH: My first job as head of customer experience was to find out what the customers were doing, whether they’d all departed. And the answer was they hadn’t. We do see pissed off customers, but they are still collecting and still redeeming. We haven’t lost a significant number of customers.

Far from ignoring that dissatisfaction, we’re trying to make our customers as happy as possible. But equally the new customers we’ve brought in are very good customers. The messaging is simpler, the branding is simpler and we don’t have that legacy of AirMiles.

The way we’re marketing the programme and where we appear appeals to people with a trader mindset. There are 12 characteristics that make up a trader; banking online is one, shopping online is another. We spent a lot of time profiling what makes up those 12 things, and making sure we’re advertising in the right places to get to those people. Not only has our churn not changed, but the people we’re getting in are of higher quality.

MW: What attracted you to the role at Avios? How do you feel about working for such a young brand?

AH: I was really excited about what Avios was trying to do. Although frequent flyer programmes are well established, the airlines and the frequent buyer programmes aren’t that good with the data. They’re very good on loyalty, but not necessarily as good with the tailoring, the data planning and the data strategy piece. Avios created insight and analytics as one of its centres of excellence, the others being partnership management, reward science and liability management, which is all about the finances.

What’s exciting for me is that it’s a new programme and a new brand. We’ve got quite a large customer base that is used to the AirMiles programme, but that had been around for over 20 years and times have changed. The airlines have changed, data’s changed, loyalty’s changed, so how do we keep that fresh and what can we do differently to adapt to the new market?

Being owned by IAG allows us to work with British Airways and Iberia, and potentially any other airlines that come into the group. And then there’s the Avios programme itself in the UK with 2 million customers.

The first few months of the job have just been about understanding the business and restructuring the team. Shortly after I started I was given responsibility for communications planning and customer experience as well.

MW: Do comms planning and customer experience feel like a natural fit for this role?

AH: It all fits together really well. My original remit was to understand what customers are doing in the data but there’s no point having data unless you do something with it. So by having comms planning [under my responsibility] means that the data drives the comms. We don’t have to try to influence people in the marketing department because we have the ownership of it.

MW: Does your responsibility for comms planning mean that you supply insights to marketing, or that you lead marketing?

AH: We work very closely with the marketers, but they’re coming to us asking what they should send to the customers, and to which customers. There’s a big appetite for the insights we can provide.

We have so many offers; a flight offer, a hotel offer, an offer on the credit card from Lloyds, an offer from Tesco. There’s so many things that can go to customers and marketing don’t know who to send them to, so they think they’ll send them to everybody.

But from the data we can say there’s no point in sending that offer to that person. There’s no point sending them a Tesco offer because they’ve never shopped at Tesco. But we know they’re just about to fly, so we should give them the hotel offer. We’re the guardian of the customer and we’re saying this is what this customer wants right now. That’s a challenge because everyone wants to talk to everyone, but we’re saying instead of talking to 2 million people with your offer and getting 5,000 responses, let’s talk to 100,000 people, get 4,800 responses and not piss off the other 1.9 million people.

MW: Can you explain a bit more about the customer experience part of the job?

AH: Customer experience is very different. We’re breaking down the customer journey every which way to find out what the key drivers of value are and whether they’re rational or emotional, and then playing on them to make sure that the experience is right for customers and they’re getting the most out of it.

We’ve done focus groups and found that some people really don’t get the scheme – people who purchase one thing a month for £50 on their credit card are not going to get anywhere [with our loyalty scheme]. On the flipside, we’ve got people who are very tuned in. They’re shopping at all the partners, they’re collecting, they’re analysing the value and they’re discussing it in the forums and in social media.

MW: How much are you led by those people’s comments? How much do you take back to the other teams and tell them what people like and don’t like?

AH: All of it. Getting that stuff out of customers’ minds is really the key. Historically in customer relationship management we talk a lot about transactional behaviour, and that’s really important because you know the value of your customers and what they buy. But you don’t know how they think. What’s good about the customer experience work is that we’re really getting into that emotional and rational stuff. A holiday purchase is quite an emotional decision; a credit card or a grocery shop is quite rational. So it’s interesting to see the ways the customers interact with the programme on grocery and credit card compared with flights and hotels.

From our focus groups, we’ve taken the things that resonate most with customers and grouped them into the 40 criteria that will either drive most value or detract the most from value, based on what our customers are actually telling us. Now we’re testing them using quantitative surveys to find out how someone’s engagement with the brand, according to those criteria, affects the way they generate value for the brand.

There are eight ways we generate value – if you collect from a new partner, for example, or if you redeem. Then we can work out what’s really good for value from collection but bad from redemption and so on, then do the analysis, and work out the things we really need to focus on.

This is a three-year project, and we’re only in month three, but the problem we have is that people are seeing things that are really interesting that they want to act on now. We have to balance the quick wins against the long-term. You’ve got to keep focused on the strategic, but at the same time weave in the tactical.

MW: How far down the branding journey do you think you are now?

AH: We’re still in the awareness stage. We’re building a global brand; we want to be the global leader in travel rewards, and that’s going to take a long time.

”You’ve got to keep focused on the strategic, but at the same time weave in the tactical”

Training note…

People are the most important thing when you’re talking about insight. The tools are one thing, but it’s the people who are going to create the insight. They need to be good with the numbers, and that comes from maths degrees, computer science, physics, but they need a commercial mindset as well.

The important thing is to realise the commercial context in which the numbers exist. It’s all very well to be able to say these customers have a propensity to churn, but what are you going to do about it?

The people who are going to do well are numerate, they’re business-savvy and they’re good communicators. That’s not an easy skill set to find, but there’s a lot of opportunity for those who develop it. I’m looking for hybrids, so we’re taking graduates in and taking them on that journey. But they have to have an analytical mindset. It’s easier to teach analysts to talk than to teach a talker insight.

Data 3 Adrian Hado outlines three key things to take into account when using data to develop loyalty

1 Have something appealing that will give customers a reason to give you their data, and reward loyalty – it’s a loyalty programme. A lot of people miss that and go straight to the data to try to get people to spend more money.

2 Really use the data – don’t collect it and not use it. You can start small with quick wins and then expand to more strategic uses, but you must make effective, relevant use of the data you collect.

3 Test and learn from the data on a continuous basis.

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