The power of innovation.

‘Innovation’ is a word we hear again and again in the business space. Brands are using new methods – innovations – to become better, to stay relevant, and to provide the best possible service for consumers and clients. But what does it mean in the loyalty space? In this article we’ll explore how innovation at IAGL has benefited and rewarded millions worldwide by speaking to those spearheading it.

Defining innovation

If we were to define innovation, we would say it’s about new ideas, methods, and products. In the business world, Mckinsey defines innovation as ‘the ability to conceive, develop, deliver, and scale new products, services, processes, and business models for customers.’

We can safely say that innovation is an important aspect of business and a key ingredient for growth. In the past, innovation may have seemed like an add-on, but it’s now crucial that businesses are able to keep up with the moving times. Data from Mckinsey also tells us that 86% of executives surveyed say that innovation is a top three priority. And nearly 40% of UK businesses are actively innovating.

As with any business goal, trying to innovate poses a unique set of challenges.

The invention of new products and services is often inspired by answering an unmet customer need. But you can also predict unmet needs.

Semi-famously, Steve Jobs once said that “you can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new.” 

There’s a power in preempting (through research and understanding your customer base) what new thing you can do to satisfy your customers. It’s all about finding new and creative ways to stand out in a crowded marketplace. By doing this through innovation, it gives brands an opportunity to start gaining that brand loyalty.  

Innovation and your brand’s loyalty offering

Brand loyalty tends to be based on a few common pillars. Some of these pillars include trust, emotional attachment, and perceived value.

Innovation can happen in line with any of these essential pillars.  Examples include: 

• Differentiation from other brands (using new ideas to form a unique value proposition) 
• Creating a memorable customer experience (looking at data to see what your customers need) 
• Exceeding expectations (alleviating pain points and meeting unmet needs)

By exciting your members with new and improved offerings, you drive engagement, and remind them why they do business with you. This reminder encourages further engagement. (Existing customers spend 67% percent more, on average, than new customers. So: it’s worth the nudge.)  

The power of co-creation

One way that brands embraced innovation is through co-creation. Co-creation in business is where consumers and other external stakeholders play a central role in the design of products and services. It’s all about gathering fresh ideas and allowing the customers to be part of that process. Involving your customers in the process can help to build advocacy by making them feel empowered and appreciated.

Your customers can also help you generate new ideas, insights, or feedback that can improve your products, services, or processes.

In Bulbshare’s exclusive co-creation survey, 81% of consumers said brands that collaborate with their customers are more authentic, 86% said brands that co-create are more trustworthy, and 79% felt that being involved in a brand’s online community would make them feel more involved with that brand. 

Innovation at IAGL

Launched in June 2023, the Avios Balance booster is an initiative allowing members to boost the amount of Avios they’ve earned over the last 30 days for substantially less than it would cost you to buy the equivalent number of Avios.

Initiatives like this one give customers added flexibility on how they earn, but also how they can maximise their Avios to get the best rewards for them. Offering Avios at a discounted rate can be an incentive for customers to spend more, due to the value exchange at hand. This offering is only available to members, further reinforcing that sense of exclusivity.

Another example is Avios Only Flights. In the year prior we experienced rapid growth, and we saw our customer base continuously increase, so to increase the value we were providing, we introduced new flights that could only be booked with Avios. The initiative created a real buzz for our customers and as a result the first flights sold out in less than 9 hours.

As well as making change, innovation isn’t nearly as effective without first listening to customers to understand what they’re after the most, as mentioned in our article The Customer’s Voice. Further to the Avios Only Flight, having received feedback around customers having difficulty in redeeming, we made our most in-demand flights available during school holidays too.

Our Voice of Customer Lead at IAGL, Michelle Quickfall, told us how important it is to ‘achieve a level of responsiveness that your consumers value, that makes them want to keep interacting with your brand’. This then allows your brand to design programmes based on what your customers actually value and make changes based on these things, on an ongoing basis.

How do we do innovation? 

We spoke to our Head of Product, Anna Appleby and Head of Proposition, Juliette Hirst to find out. Anna and Juliette shed light on the value of innovation at IAGL and how we use it to grow our business.

Question 1: Firstly, we asked about how important innovation has been for IAGL over the past few years:

Anna: Our vision is to be loyalty pioneers, so innovation is baked into our DNA. This means that it isn't a side project with ad-hoc investment, but something that we continuously give focus to through accountable teams with the levers and the autonomy to make change. This has been core to our success and seen our product portfolio grow from 2 to 30 products over the last 5 years. 

Juliette: As the Proposition team we work to stay on top of market and customer trends as well as having an in-depth understanding of our customers, which we combine with the commercial objectives of the Group to innovate the programmes. 

Q2: As a company that works closely with so many other businesses, it’s natural for us to observe different ways of working, picking up learnings along the way. What are some of the learnings you’ve picked up?

Anna: It's inspiring to see how our airline partners (British Airways, Iberia, Vueling and Aer Lingus) creatively blend working with start-ups at the cutting edge of airline technologies, with the expertise they have in-house, to bring to life new and exciting possibilities to innovate in spaces like airport operations, revenue optimisation and customer servicing.

Juliette: I’ve learned it’s important to address internal barriers or challenges that limit our ability to deliver enhanced experiences for our customers. Once we know what pain points or barriers we are solving for, the next steps are to brainstorm solutions, develop MVPs and iterate continually, leaning on our customers for regular feedback.

Q3: With everything that takes place within our business, having processes in place can help ensure things run smoothly and objectives are met. What does the process of innovating look like for IAGL and how do you ensure you have the capability to make innovation possible?

Anna: Innovation is not a magical or exclusive thing! Any team with the right operating model can have the capability to innovate. We have a few core principles that ensure we create this for our teams:

• We fund standing, multi-skilled teams, focused on a specific product.  
• We blend our resourcing by augmenting our in-house talent, who know the business, with contract resourcing where we can flexibly bring in the right skillsets at the right time.  
• We create accountable owners to lead our teams and we engineer out the dependencies between teams as far as possible, so that those closest to the work can act at pace.  

Crucially we use an iterative, agile model for building solutions - thinking big with our vision but starting small with our delivery so that we can get things in market, test, learn and iterate.

Juliette: We’re investing in our capabilities to better understand our customers. This involves identifying our target segments, regularly surveying our customers, and carrying out in-depth analyses of customer behaviour. After developing a 360°view of our customers, the next step is to map our customers journeys to identify pain points and moments of truth.

Within proposition we combine customer insights with market and consumer trends, including publishing our quarterly Trend Report, to continually iterate the airlines’ loyalty propositions. 

Q4: An important question we must ask, what are some key metrics of success in this area? 

Anna: We focus on speed and quality. How long is it taking us to get from idea to delivery, how frequently are we putting new things in market, how robust are the solutions we build (noting that our goal is to build something small, but highly functional), and how impactful are our solutions on business KPIs? 

Juliette: From a customer perspective our key measures of success are our NPS and customer satisfaction scores, as well as enrolments, active customers and multi collectors. Internally, we also measure success by how customer-centric we are as an organisation. 

 Q5: As with any important growth pillar, or any conscious effort to implement change, it’s important to not only talk about the desired change, but rather foster a culture that encourages and creates the best environment for it to take place. In thinking about this, we asked Anna and Juliette: how exactly do you do this at IAGL?

Anna: Giving people a sense of ownership is key. If you feel accountable for something, you're much more likely to feel engaged in continuously improving it. We highlight and celebrate impactful innovations, as well as sharing the things we learn when things don't go as expected. At intervals we take the time to step away from the day job and look at a longer time horizon, considering what emerging technologies might impact us in 3, 5 or 10 years that we could be planning for now.

Juliette: IAGL fosters innovation through empowering leaders to step up and take risks, as well as fostering a culture of collaboration between different teams and functions. Within Proposition we collaborate closely with our operating companies, and we need to respond to market and competitor changes, so our ability to innovate requires a growth mindset and willingness to pivot when necessary. 

A powerful force for growth  

As we’ve read, innovation done well can be a powerful force for growth in your business. It’s something that we as brands continue to work on, creating solutions that satisfy our customers more and more.

For more information on how you can innovate in loyalty or for advice from IAGL on the topic, you can contact us here.