Marketing through the internet

So what is the cost of running an airline frequent flyer scheme? Well the back of a fag packet calculation suggests that by the time you 've created the team, bought and programmed the software,maintained its accuracy, displaced fare paying passengers and fed and watered them in flight , not to mention any associated airport lounge variable costs, revenue loss can be as high as 5-10%.


Providing initial benefit to the customer base in the carriers' home markets as its rationale, the 'away from base' benefits for the overseas customer base ran the risk of providing a 'busman's holiday' in return for loyalty unless the offerings included third party local benefits ( often at a business cost ) On the up-side, prior repeat business from the card holder should have more than covered this as long as the scheme itself has solely delivered the product loyalty.

But is air travel just a commodity purchase now? For the high use corporate customers are they not already tied in by virtue of their corporate travel purchase policies? -again secured against a contract incentivising volume use again adding to the cost of sales- thus making the frequent traveller schemes more a liability than an asset?

The last time someone tried to be all things to all men they ended up being nothing to everyone. Frequent flyer schemes have been around for some time - but like any business segment there is a product cycle. Have they passed their maturity point to now become an increasing drain on the business with little genuine business improvement to be expected?

Historic large advertising budgets invariably resulted in significant above the line print media and broadcast campaigns - essentially a controlled scatter gun approach with a success rate of hitting a useful audience of 10-15%. thus 85% of the cost was wasted on putting your product in front of people never likely to use it.
Below the line direct marketing introduced necessary audience focus but still at large cost .
Now new methods of interacting with existing and new customer bases cost effectively refining the ad focus and removing most of the lead time associated with direct marketing activities.New opportunities to interact with the customer base are varied and wide through the web. Areas previously recognised as ''the domain of the teenager'' are now being used by the service industry leaders to interact with both product supporters and critics . All have potential positive benefits.
MP3 players have such widespread acceptance now, marketing through podcasting and Vodcasting delivers the message in both focused and very cost effective way.

What about the ''I hate airlines'' blog sites? Some airlines would have them shut down if only they could find legal process to achieve it . Others of course see these sites as opportunity to learn and convert. Blogging has become the domain of the savvy business . Critics take the time to comment on shortcomings and by using this critical analysis, business learns to improve its product offering. Bye bye costly and time consuming focus groups !!
These potential business improvements come at little direct cost at a time when cost containment could be the difference between survival and closure.



Has the traditional above the line campaign reached the end of its life? Has the below the line platform, the frequent flyer scheme done its catalytic work ? Has this business asset become a liability . Just as above the line budgets migrated below the line to provide better returns, this is no time to keep any marketing method going just for sentimental reasons .



Time to replace low cost marketing with no cost marketing? Is it bye bye broadsheet and broadcast and hello blog and twitter??

What do you think?