Delivering better business insights for Avios through an innovative analytical approach
The travel reward programmes run by Avios help its partners to reward customer loyalty with exciting travel and leisure options. As well as increasing customer engagement, Avios provides valuable insight, data analysis and redemption marketing activity for its partners to add value and drive profits.
To ensure the reward programmes remain sustainable, Avios need to be able to understand customers’ collection and redemption behaviour over the long term. This hinges on developing a robust methodology to predict the ‘Ultimate Redemption Rate’ of Avios points for each customer account and the ability to process very large volumes of data to improve the accuracy of this without sampling. Avios turned to Jaywing’s skilled analytics professionals.
We developed an innovative analytical approach to enable Avios to predict long-term distribution, redemption and expiration rates across customer points balances. The approach not only introduced a more intuitive way of allocating redemptions to awards, but also allowed discrete redemption and expiry profiles for a range of customer behavioural types to be determined.
The analytical task involved large amounts of repetitive processing of over 15 million individual customer accounts and points data going back to 1991 - a data set of c.1.5 billion rows. So we used our unique secure, cloud-based big data environment. Not only did this enable the use of more complex analytical processes, examining customers individually rather than in aggregated groups, but it made processing of the data achievable within commercial timescales at 200 times faster than on a standard processing environment.
Since developing the original approach and reporting infrastructure, we’ve added a monitoring suite. Carried out at six-monthly intervals, this signifies any changes that are required to the model to ensure that it continues to be an accurate representation of both the market and Avios customers.
The outcome for Avios is the ability to derive more meaningful business insights and make better decisions about awards and redemptions within their Avios Travel Rewards and British Airways Executive Club loyalty schemes but more importantly, accurate accounting for future redemption on the balance sheet as every redemption is a cost that impacts P&L.
Avios said: “When we met Jaywing for the first time, we were extremely impressed by the experience and quality of the analysts in the room and have continued to be so since. Jaywing has given us a platform that delivers more accurate forecasting and allows us to balance prudent financial management with investment and development opportunities that help us to continue to innovate our market-leading loyalty programme.”
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