Case study

Sky high ROI: how an airline optimized offers to boost their margin per offer 7x

A major airline used delivered 2M unique offers to loyalty member saw a 2x registration rate with Formation's Dynamic Offer Optimization Platform

THE GOAL

Engage loyalty members beyond traditional channels and respond quickly to changing behaviors

This airline wanted to engage customers at an individual level by targeting specific attributes rather than broad segments. The airline also wanted to extend promotions beyond traditional channels like emails and drive mobile engagement.

Another objective was to quickly respond to how consumers were engaging with offers and incorporate recent learnings immediately into the next offer. They recognized the need to run rapid experiments, learn from them and optimize their offers based on those learnings.

THE HURDLES

Obstacles included lack of agility, scalability and ability to measure offers

The airline’s existing offer process was sophisticated but lacked the agility to iterate offers quickly and scale them effectively. While they had a robust data science team and a wealth of customer insights, turning these insights into actionable offers was cumbersome.

Offer variations were also hard to track and measure, so testing and learning were time-consuming and continually challenging..

The Solution

Tailor 2M individual offers to loyalty members with an Offer Optimization Platform

The airline's new approach creates and delivers individual offers to each loyalty member. These offers are based on prior and expected customer behaviors and revolve around personalized challenges that users must complete. The challenges guide loyalty members through the customer journey, while completion earns them personalized rewards.

The new approach helped the airline leverage its data science capabilities by making insights more actionable in the form of offers. For the marketing team, it also provided expanded capabilities and an agile process. They were able to build and execute offers based on business needs from one single interface and deploy the offers across multiple channels, including email, mobile, web, and the company’s call center.

THE COVID RESPONSE

Jumpstarted their recovery by activating new customer insights around travel readiness into dynamic offers

The pandemic invalidated historical data for many industries, but none more so than air travel. Having the Formation platform already in place allowed the airline to jumpstart its recovery by quickly gathering insights on new customer behaviors and applying them to more relevant offers.

Using the advanced targeting and machine learning of the Formation Offer Builder, the airline recognized customer signals around readiness to travel and quickly build and deploy offers in response, resulting in greater relevance to loyalty members receiving them. The Formation Offer Engine tracks each customer’s behavior and offer, fulfills rewards, and measures the results, which are then used to optimize future offers.

RESULTS

The numbers speak for themselves

The airline has now generated, deployed, tracked and measured more than 2 million offers with the Offer Optimization Platform, increasing their margin per offer by 7x.

With the right technology in place, the airline has also been able to keep engaging customers in the post-COVID era, positioning themselves well for the continued travel rebound and recover.

2 MILLION


unique offer combinations automatically created, tracked, and measured

MORE THAN 2X


the registration rate of other targeted promotions

80% FASTER


offer execution; creation and deployment reduced from 10 weeks to 14 days

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