Tobias Wessels is founder of Silicon Valley-based Rebound Travel Technologies (Rebound), which aims to increase customer loyalty for airlines and the broader travel industry with its cash retention platform. He’s of the opinion that:
Airlines need to act more quickly and work cooperatively with their customers to make it through this crisis together.Tobias Wessels, Rebound Travel Technologies
What is a personalized, non-cash offer? Can you give some examples?
There are a variety of non-cash items that are of high value to airline customers, like a future flight credit, a mileage credit, a confirmed upgrade to the next class of service and even free flight segments.
How should airlines position these refund alternatives to best attract passengers?
There needs to be meaningful value for the customer – offering a $1,000 flight credit to someone with the right to a $1,000 refund will not show any take-rate. What is required is a set of offers that could see them choose between a) The $1,000 refund; b) A $1,200 flight credit for future travel; or c) A free return flight to Europe.
To make the offers work for both the airline’s finance team and the customer, it is necessary to generate personalized offers that reflect the actual traveler. Generic offers such as, “Receive a $50 voucher if you give up your cash refund,” are ineffective as they leave the value on the table.
Can these alternative offers actually improve the passenger experience or loyalty? How?
The customer experience is significantly improved, even in an unfortunate situation like a cancelled flight, if they receive transparent and meaningful offers.
One of the choices should always be the actual refund value, as it is mandated by the US Department of Transportation and European Commission. It is clear that travelers do not like to be forced to accept a travel certificate, but providing a voluntary choice allows travelers to choose the best option for them. Often that means they pick the attractive non-cash alternative, which means that they returns to a specific carrier for future travel. Airlines gain loyalty and can retain the cash in the process.
You mention that algorithms can be used to optimize these offers – how does your company use them?
Firstly, we ask our partners how much of their expected cash outflows they would like to retain. We then determine the opportunity cost for those alternative non-cash offers (flight vouchers, miles, etc.). This allows us to present the optimal offer to each customer while retaining the targeted cash amount and minimizing the opportunity cost.
Those offers can also consider a traveler’s loyalty status, mileage balance and historic travel spend. All that information together determines which customers receive what type and how much of an offer to achieve the goals of our airline partner.
Can you share a success story from one of your aviation customers?
Besides retaining cash, we also see an unintended but very positive consequence of using Rebound in the overall transaction stream: a customer that makes a choice between a refund and an alternative through our platform creates a unique fingerprint. That data can be used as a powerful signal by an airline to reduce or eliminate chargebacks, which is a big headache for them.
What other industries should aviation be modelling after when it comes to innovative liquidity solutions and why?
The airline industry has historically lagged behind the e-commerce space. Financial innovations, like the very popular instalment plans, started out in retail and have now made it into the airline industry.
However, airlines have one fundamental advantage over many other online retailers, and that is data. The wealth of loyalty data in the airline industry is unprecedented and can be used to create a great customer experience. Moving forward, pooling this data in a privacy-compliant way between partners presents another opportunity to improve the overall passenger experience.