NEW YORK (AdAge.com) -- Tom O' Toole runs a loyalty program that will soon have 94 million members -- the size, he says, of "one of the largest countries in Europe."
It's no wonder, then, that Mr. O' Toole is a believer. As senior VP-chief operating officer of United Airlines' Mileage Plus Holdings, he was charged with integrating the Mileage Plus loyalty program with Continental's OnePass after the carriers merged. So he believes in the power of predictive analytics to create exceptionally targeted offers for consumers that will, in turn, lead to strong consumer engagement and the "right" kind of brand loyalty.
The former chief marketing officer of United Airlines and CMO-chief information officer of Global Hyatt Corp. assumed his new position Oct. 1, 2010. Since then, his work has concentrated on designing the combined program: Continental OnePass had 38 million members as of July 2009; United Mileage Plus had 56 million members as of May 2010, according to Frequent Flyer Services.
Ad Age: Explain Mileage Plus Holdings and its relationship to United.
Mr. O' Toole: The Mileage Plus Holdings business unit performs three functions: customer data management and analytics; plus the combined loyalty programs of the former United Airlines and former Continental Airlines, Mileage Plus and OnePass, respectively; plus targeted marketing. We are in the process of integrating the Mileage Plus frequent-flyer program and the OnePass frequent-flyer program into what will be the world's largest travel-loyalty program and may well be the largest loyalty program in the world. If the membership of our combined programs were the population of a country, we would be one of the largest countries in Europe. The scale of the combined programs is very compelling. What is related to that is that our mileage currency is the most popular loyalty currency in the world.
Ad Age: Will you essentially overlay the Mileage Plus program and eliminate OnePass?
Mr. O' Toole: No one will lose a mile in this combination, in this program. All existing mileage balances will be combined and maintained. We are truly combining the OnePass and Mileage Plus programs into a new yet-to-be-announced new program with a new name we'll reveal mid-year. ... It's an unprecedented opportunity. We're in the process of designing the structure and features of the new program.
Ad Age: Can you explain specifically what that opportunity is?
Mr. O' Toole: The opportunity at the most fundamental level is to take a step back and look at the underlying value structure of a loyalty program and ... optimize the structure so that it is a win-win for our customers and for the airline.
Ad Age: How?
Mr. O' Toole: We are looking at the recognition and features and benefits that we offer to our elite tiers of members. Our elite tiers are customers who are extremely important to us, so [we want to] best recognize and reward the customers who offer the greatest value to the airline in a manner that creates the greatest value to the customer.
It starts with an increasingly precise segmentation of our member base. Fundamental to all that we are doing is applying very robust, predictive analytics to increasingly precise customer segmentation to be able to offer specific sets of benefits to highly specific sets of customers.
Ad Age: What is the practical application?
Mr. O' Toole: It is targeting the right message for the right services to the right customer. Let's say that you have a second home in Paris, you travel quarterly to your second home in Paris. You would be a perfect target for our Premier Travel package [which enables that customer to buy a set of travel enhancements including expedited check-in and security checkpoint clearance, boarding in the first seating area to be called, extra legroom in the Economy Plus section, and additional frequent-flier miles for the trip].
Targeting those efforts through every customer-contact channel ... that's where we're headed.
Ad Age: What does the Mileage Plus program mean for United?
Mr. O' Toole: This is about creating revenue through creating relevance. What this is about is highly analytics-driven targeting. We use various outside providers, but the core work we do in-house. And in the course of doing this, this is all based on the foundation of being the leading travel loyalty program.
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