The Subscription economy

June 19, 2017

Opportunity/problem statement: Numbers of frequent flyers are on the rise with the global economy booming in recent years. Numerous market researchers suggest that in 2017 business traveller are expected to make more trips across the globe compared to last few years . To serve this segment of travelers in the most efficient way it is important to identify the main pain points; unavailability of service when needed, and the uncertainty of the price and quality of the service provided by the airline. This particular segment is very demanding and puts the airline's customer service at test against some very challenging criteria such as price and availability.

 Strategy/possible solution: To satisfy these demanding frequent travelers, airlines need a unique strategy to hit the sweet spot by blending quantity with quality. One possibility is to package airline services into bundles that would offer the quality of service for a fixed price without compromising the airline’s profitability. We are talking about a subscription-based model that has been very successful in other ecommerce industries(Spotify and Netflix to name a few). Subscription-based offerings would bring financial stability to airlines by securing revenue in advance and by bringing revenue from products that would be given away for free otherwise.

 Airlines can deepen engagement with trusted customers to deliver new product categories around the subscription economy. This develops a selected tier of the airline's audience to engage a new type of loyalty, a loyalty where committed, up-front spend infers new benefits.

 

 Imagine some of the additional benefits for your consumers also:

  • A family assurance subscription model where you subscribe for a monthly fee, but infer benefits that your kids get short notice trips within selected markets, or where a family event is included at a reduced price at your destination.
  • As a business traveler, your company’s annual subscription infers a level of lounge or premium seating which you can use for important business trips, or to reward frequent flyers (or great employees!) within your company in a different and unique way.

 The Datalex Payments blog series continues to outline applications of our digital payments capability.  Keeping the above context in mind, we can enable airlines to offer any of its current services as a subscription-based offering. Airlines could add new products into their portfolio by decoupling the traditional product catalog into separate bundled services. Datalex’s solution allows the airline to get closer to its frequent and loyal travelers, and provide a unique and exclusive connection to make them feel special.  We provide an infinite number of pricing options that are easy to deploy and adapt to any situation in no time.

Here at Datalex, we are working with the largest airlines globally to open the door to new digital payments offerings. Our focus is to introduce cutting-edge new technologies that could make a difference to our clients and to the end consumer.

 

Dermot Reynolds, Datalex SVP Engineering & Product 

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