Go Lean…Caribbean

Go Lean Commentary

It’s time to go back to school, advanced Business School that is, and glean some wisdom from the structured marketing strategy called Loyalty programs. These are designed to encourage customers to continue to shop at or use the services of establishments associated with each program.^[1]

There are large numbers of such programs in existence covering most types of business, (airlines: frequent flyer, hotels: frequent guest, car rental: frequent renters, restaurants: frequent diners, etc.), each one having varying features, and reward schemes. See Appendix B for details on airlines’ frequent-flyer programs.

Taking a page from this retail marketing eco-system …

… there is a need for a frequent-flyer-style loyalty program in the Caribbean to incentivize repeat business-activity in almost all regional economic engines.

This commentary asserts that a frequent-flyer-miles-style program can be structured in the Caribbean to “spread the wealth” from peak to non-peak seasons. More points can be accumulated by consuming hospitality in the slow season and less points are accumulated for consuming hospitality in the peak/high season. (See Appendix C for Spirit Airlines Model).

This strategy can also be applied with locations …

… more points can be accumulated for hospitality in the lessor-known, lesser-frequented destinations. (See Appendix D for a glimpse of the Hotwire / HotDollars program).

The book Go Lean…Caribbean calls for the elevation of Caribbean society; to re-focus, re-boot, and optimize all the engines of commerce so as to make the Caribbean a better place for these categories of vital activities: live, work and play.  Loyalty programs can be used to incentivize all of these aspects of this roadmap. The tourism industry is categorized as “play”. The book posits that the region can experience even more growth than the estimated 80 million people that visit our shores annually. This can also apply to more spending from the visitors as well.

The Go Lean book is written to employ the best-practices of economic principles. Therefore, these fundamental principles – as related in the book (Page 21) are paramount:

People Respond to Incentives in Predictable Ways: Incentives are actions, awards, or rewards that determine the choices people make. Incentives can be positive or negative. When incentives change, people change their behaviors in predictable ways.

Economic Systems Influence Individual Choices and Incentives: People cooperate and govern their actions through both written and unwritten rules that determine methods of allocating scarce resources. These rules determine what is produced, how it is produced, and for whom it is produced. As the rules change, so do individual choices, incentives, and behavior.

The Go Lean book considers the Agent of Change (Page 57) of technology and its effect on the Caribbean’s biggest economic driver “tourism”. The end-results of loyalty program will have far-reaching effects on this travel/tourism industry.

Technology, the Internet-Communications-Technology (ICT), social media account management & marketing …

… the stewardship of Caribbean tourism must truly adapt, evolve and transform to lead and keep pace with this dynamic world; see sample VIDEO in Appendix A.

This commentary relates to more than just tourism and the visiting tourists. Considering applications for “live”, “work”, and “play”, we see that there are also many opportunities to apply incentives for Caribbean citizens who live in the homeland.

The Go Lean book identifies an Agent of Change in the vast field of technology. The technological advances with cutting-edge financial products allow loyalty programs to be forged to incentivize a lot of good behavior and to dissuade bad behavior. Consider these “live” and “work” examples:

“Live” – Tax Payments – This is not a welcome activity for anyone, thusly taxing authorities provide range of dates for tax obligations to be paid; (in the US, the Federal Income Tax deadline is April 15; payments/refunds can start on February 1^st). A loyalty scheme can easily be introduced to award miles-points for early payers and refund recipients that purposefully claim their refunds later in the time window. This practice will maximize cash flow for the authorities while commending good behavior with preferable things they may want after completing obligation they must endure.

“Live” – Energy Efficiency – Positive activities like installing Green Energy alternatives (solar panels/water heaters, hybrid/electric automobiles, etc.) can be incentivized by awarding “double miles” or “eco-points”. Rather than acquiring some chattel goods, the rewards in this case could simply be privileges, like riding in carpool lanes alone.

“Live” – Education – e-Learning enrollment can result in immediate and deferred mileage credit for Caribbean students. (Thus discouraging further brain drain consequences).

“Work” – Taking jobs in rural/desolate communities or working from home is positive behavior that can be further incentivized with “double miles”-like promotions.

“Work” – Working or volunteering for Not-for-Profit agencies should also be encouraged, incentivized and rewarded.

“Work” – Take-Your-Daughter-To-Work Day is a good practice to instill career goals in young girls. Rewards should follow.

There are a lot of opportunities where loyalty program rules can transform society. Consider the practice of “gifting” miles. One person can earn the miles, but then share them with another party and even gift them to a charitable organization or a person directly. This strategy allows for a nimble, technocratic administration of loyalty programs to incentivize good behavior and dissuade bad practices.

Loyalty programs embedded in societal engines are transforming …

Could the current tourism administrations in the Caribbean master the complexities of this technology-bred strategy for elevating the region’s “play” economic engines? Hardly!

How about for regional administrators for the other activities, “live” and “work”? Again, hardly!

This “new-fangled” world requires “new-fangled” leaders. Visionaries. Technocrats.

The book Go Lean…Caribbean and the underlying movement seeks to re-boot the strategies and tactics of tourism marketing for the entire Caribbean region. The book asserts Caribbean member-states must expand and optimize their tourism outreach and use innovative products like excess inventory and loyalty rewards. However the requisite investment of the resources (time, talent, treasuries) for this goal may be too big for any one Caribbean member-state alone. So the Go Lean book campaigns to shift the responsibility to a region-wide, professionally-managed, deputized technocracy, the Caribbean Union Trade Federation (CU). The book serves as a roadmap for the introduction and implementation of the CU.

The goal of the CU is to bring the proper tools and techniques – electronic commerce, Internet Communications Technologies (ICT), visionary marketing, agile management – to the Caribbean region to optimize the stewardship of the economic, security and governing engines.  The book posits that the economy can be induced and spurred for continuous progress, with technocratic management and stewardship of a Single Market. This would be better than the status quo. As conveyed here in this commentary, and in previous commentaries, the publishers of the book Go Lean…Caribbean convene the talents and skill-sets of movers-and-shakers in electronic commerce so as to forge the best tools and techniques for advanced product marketing like loyalty program.

Change has come to the region. This book Go Lean… Caribbean provides the needed details. Early in the book, the optimization and best-practices was highlighted as a reason the Caribbean region needed to unite, integrate and confederate to a Single Market. These pronouncements were included in the opening Declaration of Interdependence (Pages 11 – 14):

iv.  Whereas the natural formation of the landmass is in a tropical region, the flora and fauna allows for an inherent beauty that is enviable to peoples near and far. The structures must be strenuously guarded to protect and promote sustainable systems of commerce paramount to this reality.

vi.  Whereas the finite nature of the landmass of our lands limits the populations and markets of commerce, by extending the bonds of brotherhood to our geographic neighbors allows for extended opportunities and better execution of the kinetics of our economies through trade. This regional focus must foster and promote diverse economic stimuli.

xiv.  Whereas a free market economy can be induced and spurred for continuous progress, the Federation must install the controls to better manage aspects of the economy: jobs, inflation, savings rate, investments and other economic principles. Thereby attracting direct foreign investment because of the stability and vibrancy of our economy.

xxvii. Whereas the region has endured a spectator status during the Industrial Revolution, we cannot stand on the sidelines of this new economy, the Information Revolution. Rather, the Federation must embrace all the tenets of Internet Communications Technology (ICT) to serve as an equalizing element in competition with the rest of the world. The Federation must bridge the digital divide and promote the community ethos that research/development is valuable and must be promoted and incentivized for adoption.

The Go Lean… Caribbean book wisely details the community ethos to adopt to proactively facilitate digital campaigns for the changed landscape; plus the executions of the following strategies, tactics, implementations and advocacies:

The CU seeks to foster internet-communications-technologies (ICT) to aid-and-abet tourism and other economic activities. This includes all supporting functions before, during and after visitors come to our shores – accumulating reward miles-points creates an account-holder status – see Appendix D – with the need for monthly e-statements. This is a forceful example of how a technocratic effort by regional administrators can enhance the Caribbean product offerings online. This is heavy-lifting; but this hard-work is worth the effort. The Returns-on-Investment is assured!

In previous Go Lean blogs, related points of the Technology Agents of Change affecting the tourism product offering have been detailed; see sample here:

The Caribbean must lean-in to these new business models to incentivize good behavior, for tourism and other aspects of Caribbean affairs. People will respond with the proper inducements. So imagine the universe of 130 million people all tuned-in – to the www.myCaribbean.gov portal – and responding to the appropriate prodding.

This is referred to as “Unified Command-and-Control”. Caribbean benevolent stewards can “push a few buttons” and millions of people respond, for the Greater Good. This is an exciting perspective. Let’s do it!

This is the charge of the Go Lean roadmap: incentivize the people to do more of the right thing. With the empowerments and elevations portrayed in the roadmap we can succeed in making Caribbean region a better place for citizens and tourists alike to live, work, play and repeat.  🙂

Download the book Go Lean … Caribbean – now!

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Appendix A – VIDEO – Capital One Venture® – Jennifer Garner – Ticked Off Traveler – https://youtu.be/7uwYGXqPguU

Published on Sep 15, 2015 – Trying to use your airline credit card miles shouldn’t be frustrating! With the Capital One Venture card, you can fly on any airline any time, then use your miles to cover the cost. Learn more: http://www.capitalone.com/credit-card

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Appendix B – Frequent-Flyer Programs

A Frequent-Flyer Program (FFP) is a loyalty program offered by an airline. Many airlines have frequent-flyer programs designed to encourage airline customers enrolled in the program to accumulate points (also called miles, kilometers or segments) which may then be redeemed for air travel or other rewards. Points earned under FFPs may be based on the class of fare, distance flown on that airline or its partners, or the amount paid. There are other ways to earn points. For example, in recent years, more points have been earned by using co-branded credit and debit cards than by air travel. Another way to earn points is spending money at associated retail outlets, car hire companies, hotels or other associated businesses. Points can be redeemed for air travel, other goods or services, or for increased benefits, such as travel class upgrades, airport lounge access, or priority bookings.

Frequent-flyer programs can be seen as a certain type of virtual currency, one with unidirectional flow of money to purchase points, but no exchange back into money.^[1]

The very first modern frequent-flyer program was created in 1972 by Western Direct Marketing, for United Airlines. It gave plaques and promotional materials to members. In 1979, Texas International Airlines created the first frequent-flyer program that used mileage tracking to give ‘rewards’ to its passengers, while in 1980 Western Airlines created its Travel Bank, which ultimately became part of Delta Air Lines’ program upon their merger in 1987.^[2][3] American Airlines’ AAdvantage program launched in 1981 as a modification of a never-realized concept from 1979 that would have given special fares to frequent customers. It was quickly followed later that year by programs from United Airlines (Mileage Plus) and Delta Air Lines (SkyMiles), and in 1982 from British Airways (Executive Club).^[4]

Credit card purchases
Many credit card companies partner with airlines to offer a co-branded credit card or the ability to transfer points in their loyalty program to an airline’s program. Large sign-up bonuses and other incentives have been common. Accruing points via credit cards bonuses and spending allows infrequent travelers to benefit from the frequent flyer program.

With a non-affiliated travel rewards credit card a card-member can buy a positive-space ticket considered “revenue” class, which can earn the passenger points with the airline flown.^[11]

Redemption
After accumulating a certain number of points, members then use these points to obtain airline tickets. However, points only pay for the base fare, with the member still responsible for the payment of mandatory taxes and fees.

Source: https://en.wikipedia.org/wiki/Frequent-flyer_program retrieved November 11, 2015.

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Appendix C – Spirit Airlines

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Appendix D – Hotwire / HotDollars

What are HotDollars?
HotDollars can be used for any hotel, flight, or Hotwire Hot Rate rental car booking on Hotwire. Each HotDollar is equivalent to one U.S. dollar and is available for one year from the date of issuance. For more information, please see the HotDollars section of our Hotwire Travel Products Rules and Restrictions.

To use your HotDollars, simply sign in by clicking, “My Account.” Then, during checkout, choose HotDollars as your payment method.