How difficult can it be?

We spend a lot of time talking about customer data, personalised marketing and the potential of AI.  From our point of view looking at the motor industry, we see the opportunity to reduce cost of distribution and grow ancillary revenues by working the customer database harder, and coming up with marketing communications that feel very personal, give the client a warm feeling about the brand, and increase the probability that they will come back and spend some more money with us.  That might be to replace their car, bring it in for some amber service work to be completed, or to buy some digital service or over-the-air upgrade that will open up a whole new high margin revenue stream.  In an era of more intense competition on new car sales and declining aftersales opportunities, that is absolutely crucial to protecting profits for both manufacturers and dealers.

It is sometimes informative to look outside the automotive industry for best practices, to learn from other sectors who might be further down a similar road and replicate the brilliant things they are doing in our own sector.  We look at a number of sectors on a fairly regular basis including the big grocery retailers, fast fashion, hotels and airlines.  There are indeed sometimes positive lessons to be learned and we share those with members of our research programme through the meetings and webinars we hold.  However, you also sometimes come across lessons in how not do things, and this week I have had an experience which shows how despite holding all the cards, businesses can sometimes get things spectacularly wrong and achieve the exact opposite of what they were hoping to.

As a resident in the UK, I have always tended to use British Airways (BA) more often than other airlines, although their general quality of service has declined over the years such that they long since lost any legitimacy to use their old advertising tagline of ‘the world’s favourite airline’.  However, despite regularly using Emirates (to Asia), Lufthansa (obviously to Germany) and Easyjet (wherever they have a suitable schedule), I have been gradually racking up Tier Points with BA.  They have long had a promotion that when you reached 35,000 tier points, you would be granted Gold Tier frequent flyer status for life.  This equates to almost half a million miles flown (or more worryingly 6 weeks in the air) so that’s a lot of money spent with the airline.  For me, the benefits that I value are not huge – early check-in and lounge access regardless of travelling on the cheapest available ticket.

I knew that I was approaching this threshold, and I wondered what would actually happen.  My worst case was nothing.  That unless I claimed my lifetime status, they would let me carry on at the plebian ‘Blue’ level, but even under that scenario, I assumed that I would get some congratulatory message that thanked me for my business over the last four decades since they set up the Executive Club.  My optimistic scenario was that they would recognise it automatically and that I would get a quasi-personal letter ‘signed’ by the CEO with some sort of BA goodie that I could add to my display cabinet of mementoes from my career.  (Might sound sad but it’s real, and is a fund of stories and anecdotes).

The reality was actually worse.  My flight out to Las Vegas for the NADA Show took me over the threshold, and when my Executive Club account was credited, I received an automated message, the header of which is shown at the top of this blog.  No hint of thank you for your business.  No message of congratulations.  Instead a message that suggested I had applied for the upgraded status (which I had not).  Apart from the gold border, it could just as easily have been an acknowledgement that I had applied for a refund, or a replacement Blue card as I had lost the original.  My reaction?  Disappointment, rather than delight.

We spend a lot of time in ICDP and in the industry as a whole wondering how we can improve direct marketing to our customer base.  Customer knowledge is one of the prizes that manufacturers and dealers battle over.  The franchised and independent repairer sectors are fighting a similar battle at the moment over access to in-vehicle data in part so that they can send personalised communications to customers.  Yet here is an organisation with a direct-to-customer sales model (travel agents RIP), a comprehensive customer database, and a very focused customer segment.  How many of their customers achieve 35,000 tier points each year?  How much effort was required to come up with a process that delivered a feel-good factor on this milestone that will only happen once in the lifetime of a customer?

This is not a case of needing AI as in artificial intelligence.  All it needed was AI as in any intelligence.  Having achieved my lifetime Gold, I will continue to be using Emirates, Lufthansa and Easyjet where their schedules suit, and recommending them to others.  I sincerely hope that anyone in our industry who has a responsibility for CRM, direct marketing and loyalty programmes will do a better job than BA has done here.  Having the customer data is one thing, doing something smart with it is clearly a different and more challenging task all together.