Introduction

Bricks of loyalty:

Despite the existing literature on loyalty, it is recognized that mental processes are responsible for faithfulness and loyalty are still ill means (Pritchard et al 1999) .. Basic guidelines for all human reaction is fueled by his emotional range. Thus, to understand its logic and medium organizations can benefit in a limited expansion, a deep understanding of human psychology is essential.

Total customer loyalty is the holy grail that all organizations strive to make their business objectives and support the financial bottom-lines. Every organization has a vision that their customers will remain loyal to their business entirely. If this is achieved, will continue to be profitable forever. This is a dichotomous thinking, as if all customers would reduce their loyalty to a few organizations that will attract customers, business managers handle growth, the killing of the expansion and new initiatives. Thus, unfaithful to varying degrees is a reality and a necessary evil.

The reality is far from fantasy, and people will shift their loyalty at various levels, as are promiscuous by nature in all its relations. Their capacity for intelligent thought they enable different combinations and permutations to discover in every situation

and choose what is best for them. “The feeling of” loyalty seems to part of the survival instinct is. It helps people to meet and live in groups and carrying out tasks that would otherwise not alone or in small quantities to be done.

The human tendency to cluster together experts who act as “relationshipproneness. In this group, the individual is willing to outweigh the collective needs of his personal needs. It requires a high level commitment

can only be based on a strong consensus and a positive state of mind.

Among the various factors that loyalty, a sense of a big hit. In the literature on organizational psychology, Allen and Meyer (1990) distinguish between affective, continuance (calculated), and normative commitments. The differences between these three types of connections reflect the psychologist says that binds the individual to the organization. Affective commitment refers to the emotional commitment to the organization while continuing the commitment

refers to the cost of the people associated with leaving the organization and a normative component concerns the individuals’ feelings of obligation to remain in the organization. They argue that a broader understanding of the relationship

between commitment and loyalty will be achieved when all three types of obligations considered simultaneously. Pritchard et al. (1999) argues that the analysis of commitment “must go beyond general expressions of the attachment and includes its own understanding of the psychology of binding the person is available. They distinguish between information processes, identification processes and procedures as past of the bets.

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Many organizations spend valuable resources in the execution of a program to retain existing customers and new ones come. While many management, others are still struggling to offset) the cost and find out what happened in the process. Loyalty programs are not one-size-fitsall solutions. It must pay attention to the stimulus-response, potential customers on the basis of actual behavior data over time. People in different parts exhibit different properties and behavior of stimulus, which causes desirable answer appears to be unaffected. Different behavioral responses

by the same people in different groups is really difficult. Basic understanding of the human stimulus-response to emotional manipulation can be seen from the classic “Hawthorne’s student BF Skinner’s theory of” open-conditioning rants “and the design and research opportunities” hidden economy “. Reward is offered by way of a program not just good behavior causing, but also enhanced so that it eventually became part of people buy psyche. The production of the correct answer is not only the functionality offered rewards, but also many other factors including the overall experience, as “nomenclatured marketing experience is,” in today’s language.

By a member of the loyalty program participant by default, will form part of a larger community. Like any other group, this community is managed by certain norms and rules determined by the principal organization that owns the program. Laws accrual and redemption are the basic rules, and ongoing tactical promotions that another set of lines, shapes, and advanced rules, which form part of standard operational procedures, leading members of the community. Community building is the first step in a successful conversion of the members’ psychologicalcrowd “remains key.

Psychological crowd is very susceptible to suggestibility exercise. This vulnerability to the draft is probably a constant and relevant communication to occur. In marketing terms, tactical and strategic actions

is used to constantly tell the members a pro-active proposal to serve. Physical and emotional closeness between the members can be achieved by creating a work that is unique to them as a family day out, movie premieres,

Tickets for games etc. These activities re-assure that each member that there are many like them who think alike and act to the verification of their membership in the group.

What is true for individuals applies to group-successful loyalty programs are those that the emotions that drive human behavior and channelize them to a small change in behavior that lead to regular and incremental financial returns for the organization. The human mind craves routine, and for no reason, which allow you to gain (the reward) negotiations with organizations known to the winner will be continued.

Loyalty programs are determined by market dynamics. It is no longer a luxury but a necessity and an important tool for survival for a business in all sectors. It is easy to understand if we realize that the market has a residence, but nowhere in the collective consciousness of consumers.

Loyal-air perspective

Like any business, Space organically grown to many times its size since the first commercial aircraft begins operations. In almost every nation now has a “national” airlines and many private airlines glutting sky, the passengers have never had a wide choice. Air travel itself descended from a few notches in the place of the ticket prices hit realistic levels and luxury, it is a necessity.

The process of globalization has led to the creation of new inter-cultural and inter-national addiction. The new fat and “flatworld, and political boundaries more transparent. Commercial or personal transportation have picked up and given that today,

Time is seen as valuable, of course, air travel became more popular. Conspicuous consumption with the added consideration, and even services are considered par for the products. It may be safe to say that today the consumer actually

crowned “king”.

According to a study by Datamonitor, the global community the industry generated total revenue of $ 318 6 billion in 2005, an annual growth rate (Cagr) of 2 6% for the five-year period 2001-2005. Passenger numbers increased by Cagr of 5 years. 5% between 2002-2006, a total of 2.490 million passengers in 2005 to achieve. The performance of the sector is expected to accelerate, the expected Cagr of 8 years. 3% for the five-year period 2005-2010 expected to manage industry worth $ 475. 3000000000 by the end of 2010 (3).

The requirement for a high-level goals, is focused on the struggle against the maximum angle commercial airlines individually. Loyalty programs or frequent flyer programs, which in the aviation sector is known already shown that an effective marketing weapon effectiveness of individual airlines and alliances to help differentiate their services and the reduction of the basic functions of marketing expenditure. Since the acquisition target has changed from large groups into smaller population groups or even individuals, a shift in the fire mode of the attack, but the accuracy is a natural process.

Increased business opportunities its own unique challenges and offer in their efforts to profitability maintain to throw, but has no other choice to blow, renew and strengthen the alternative marketing methods, such as FFP. FFP is psychological marketing initiatives that focus on emotional goals call for change that drives them, not only in thought but also action. This means that, over time, the target customers are encouraged to if not actually buy anything, at least for more information about the offer

progress. In most cases at the beginning of the transaction.

Like everything in the universe, loyalty programs have gone through their share of the development as well. From primitive stamp and other coupons to you, it has come a long way and today is almost entirely software-driven offers greater flexibility by intelligent

automation. Transformation of frequent flyer programs, kick started the deregulation of the airline industry in the U.S. in 1978 and full computerization of the industry is a fast in recent years.

In 1981, when it began to AAdvantage, American Airlines, which was the best 150.000 customer database. Today, many continue to increase with the introduction of new complexity. Such a large database of offers potentially large business opportunities

if properly exploited information. Extractingprecision cutting and dicing the information available sophisticated data management technology requirements and the derivation of analytical tools that ultimately help the community and get the contract.

In 1981, when it began to AAdvantage, American Airlines, which was the best 150.000 customer database. Today, many continue to increase with the introduction of new complexity. Such a large database of offers potentially large business opportunities

if properly exploited information. Extractingprecision cutting and dicing the information available sophisticated data management technology requirements and the derivation of analytical tools that ultimately help the community and get the contract.

Reward options:

Expectations of customer service has undergone a natural evolution process and a higher level today. They are aware of the fact that their business is valuable to the industry and individual airlines. In view of the increased expectations

Therefore it is necessary to offer diverse, exciting and receive compensation in the two periods, tactical and strategic. The challenge for the airlines are constantly seeking new methods of remuneration that the customer happy and participation, without keeping his financial bottom line. Thus, in addition to maintaining their own financial FFPs, most airlines have also joined the alliance, such as Star Alliance, SkyTeam and Oneworld Alliance of the three best in the world, or smaller local groups. Alliances promise of a seamless service for passengers in the corporate network with each other

Alliance members provide an adequate level of reward and recognition of other members. Reasonable fees are here to stay and there is no escape.

It is a tribute to the flexibility and appeal FFPs that the expansion and housing-related, but not as partners, such as rent, car, travel agencies, hotels, etc. Many of FFPs also successfully tied up with natural transaction aggregators like credit card plug-in retail accrual-based eco-system. Although these companies are many outsiders in a FFP, a wider and faster to earn miles for members of the pool, but also lead to additional revenue for the community, to use subsidies to the cost of the FFP.

FFP concentric circles

Partnership

Airline alliances to assist in the selective accumulation of passengers, as well as the widening of the cost of benefits to offer. The success of these alliances are indicated by the statistics generated by the evidence of his popularity and the way forward for the airline.

Among the top three alliances, Star Alliance’s 455 5000000 PPY *, 912 destinations, 25 1% market share, SkyTeam 428 000 000 PPY, 841 destinations and 20 8% market share and the 319 PPY oneworld 7 million, 692 destinations and 14 9% the market

part. One of the key factors that play a role in the popularity and success of these alliances is certainly the opportunity to earn miles by raft.

* Passengers per year

According to the Economist magazine, loyalty points are the world’s second largest currency. The total number that often in the world, there are miles worth an estimated $ 500,000,000,000. (4) This means that collections will remain stable or knowingly miles or as a normal process. Has become an alternative currency, whose exchange value of the potential customer is used to attract attention. Redemption of an important instrument than it used to be able to do business with customers and ecosystem miles to sell perishable commodities like airline seats or hotel rooms during the off-season. Large swimming pool and miles is a real possibility as a threat to the aircraft industry and suggests that with the constant accrual of periodic redemption is necessary to determine the value of a mile to demonstrate.

It seems that an attractive loyalty programs (consumer) and effective (an airline) is the reward side of the comparisons. FFPs work because there is a balance of consumer and community interests. For an airline, a generous valuation can be justified, since the average cost is closer to the direct cost of transporting a passenger (extra food, extra jet fuel, etc.) than the actual cost of similar tickets for sale. This is because the allocation of seats is limited, thus reducing the likelihood of moving the allocation of personal income passengers. The real advantage for organizations in the distribution of loyalty points is not only a sense of loyalty, but millions of points accumulated on the behavior of customers. This information is analyzed and used for communication inside-out marketing. How FFPs communication with established airlines’ customers will enable targeted, it is not necessary to spend so much on expensive (and work), print and broadcast advertising interest and loyalty of existing customers to keep. Dollars “earned” the run millions in savings. combination of sophisticated yield management techniques and loyalty programs to help the aviation industry to consolidate their gains.

FFPs at a crossroads:

Frequent Fly-er programs as revenue generators and construction remained constant in the aviation industry, but it is the customer’s needs, which has undergone fundamental change. In order to accommodate the changing needs of customers, many FFPs the inevitable transformation into advanced programs have undergone, play an important role in Customer Relationship Management (CRM). In the process of maintaining the relevance of their FFPs as a sign of the differences, the airlines today are forced to make their programs to upgrade to next-generation features. But the biggest obstacle to this transformation comes from within constraints of the system. Most of today’s loyalty schemes are developed in-house in a reactive manner. It is largely built on older systems that restrictions on the rating. While the basic deduction

and the crediting of points, other offerings, face differential steps work so well with the old system, which is a comprehensive limitation of these systems shows a very manual processing required to support these activities

Some weak existing systems can be summarized:

Lack of flexibility, in most systems is very difficult to make changes, make changes, as the new actions, new programs, or even small things like that get the information for each customer is stored.

Expensive to maintain, depending on the configuration of the improvements within existing systems that are inherently difficult, a lot of coding is essential. Manual coding exercises are challenging by nature, are expensive. Largely based on the question

systems are poor interoperability among alliance partners. This means that the opportunities for sharing and the opportunity cost associated with economies of scale and reduce costs by pressure.

Little or no access to customer data for analysis, despite the accumulation of data on customers, many airlines are limited by their inability to obtain information via data mining and analysis system. This information is valuable for understanding customer behavior patterns, calculating ROI, the necessary repairs or obviously important to directly valuable customers.

Lack of customer flow of information between the systems: the travel experience for passengers, improve airline employees, who must deal with the knowledge and based on larger businesses, treat them as White. If no information about

The client is accessible through the system, it can not happen. In existing systems, customer data can be smoothly will not be printed to employees with customers at the right time.

There are other obstacles such as the inability to provide a comprehensive tactical promotions to offer, the inability to effectively handle large databases, the lack of multi-channel, non-integrated and non-automated marketing functions so keeping down the offer of the use the actual

abilities often fly there program. Thus FFPs face on the state-of-the art platform truth, the airlines lost the opportunity to make their loyalty programs to transfer to the real instrument of competitive advantage, acquire, maintain and expand his business with a high value customers. In another year, the current systems and the community served. In difficult cases, where the value-change proposal to FFP, the passenger loyalty more of a determining factor, which has a direct impact on operational efficiency and profitability of airlines. Older systems are also past their prime and the airlines are left with no other choice than to their business systems FFPs to upgrade.

Comparison heritage system and new loyalty solutions.

FFPs are the work horses of the aviation industry, which has proven its efficiency over 27 years. The role of FFPs and expectations of him have changed. The next generation of loyalty solutions to take within the industry is still in the power of using FFPs.

Some properties of a new loyalty solutions are:

1 Migration viable and inevitable option from the current system of inheritance.

2 Pre-built analytics, the customer behavior / buying patterns throw up to get.

3 Flexible rules engine that can provide more for the start of a program.

4 Empower offer to design and effectively implement and manage loyalty campaign and the ability to create a comprehensive rewards to offer.

5 Flexible design innovative models of air movement to support and allow them to effectively respond to changing business

requirements of the airline industry.

6 Turn seamless flow of information between the client systems. Touch points, where customer service should be

The ability to key information that can fly experience to transform access.

7 Marketing Communications must be integrated into the FFP rather than a separate activity.

With organizations such as ITC Infotech offers specialized services for the upgrading of existing systems FFPs new company-based platforms, are loyalty programs for the conversion of a dynamic entities that can handle complex tasks and more than the current expectations of him.

To know more about airline frequent flyer Web site called ITC Infotech’s. http://www. itcinfotech. com /


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