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EL AL Case Study

McKinsey recommends Incentives Solutions for agents’ motivation for EL AL

EL AL, Israel’s national airlines, was established in 1948 and has since grown into a prestigious international carrier. The company became public in 2004 and is now traded in the Tel Aviv Stock Exchange. IATA ranked EL AL as one of the world’s three most efficient carriers.

The Need for Change

Like most airline companies, EL AL faces fierce competition whereas customers today enjoy a wider variety of regular, charters and discount airlines operating in an open skies environment. It’s a “buyers market” and at the decision making point the closest person to customer is the travel agent.

With 77 sales offices worldwide, 700 destinations and over 3000 travel agents, EL AL needed something different to win the hearts and “mindshare” of its in-direct channels so it will be present at the decision point of every customer interaction.

“Sell & Fly” represented the changing winds of EL AL’s new initiative for reaching out and motivating every travel agent to produce higher sales.

Project Scope and Criteria

EL AL’s marketing staff teamed up with McKinsey consultants to identify new ways to motivate and incentivize travel agents so that they would promote EL AL’s travel offerings.

In particular, a solution was needed to provide tangible targets and rewards for over 700 travel agencies and the over 3000 front line employees who deal directly with passenger needs. The key to success in this industry is loyalty and “mindshare” of the travel agents based on direct communications and incentives rewards.

The project scope covered the entire distribution network. The INCENTIVES–SPM system was interfaced with EL AL standard ticketing systems to receive all ticketing data. EL AL’s Agent Portal was the natural gateway to enable agent’s access to their “Sell & Fly” membership and pertinent data. Additionally the System provided an automatic redemption mechanism for the winning rewards. All data elements gathered in the System’s data mart created a meaningful and powerful resource for various discover and improvement analysis for immediate and future management decisions.

Rapid Implementation

Since ticketing systems did not include the required module, EL AL considered in-house development until, together with McKinsey consultants, found their solution at  Incentives Solutions with its INCENTIVES-SPM. This software system strengthens communication through real-time updates to agents of detailed targets and rewards. With its proven track record in channel management, Incentives Solutions provided a ready-to-use system to test the potential of opening a full-scale loyalty program for EL AL’s distribution network. The implementation covered full back-office management using INCENTIVES’ Analytics and KPI Builder, and the Achiever’s real-time personal Internet access for every front line employee of the travel agents.

The software’s Business Intelligence identifies each front line agent’s individual characteristics, enabling managers to personalize goals and incentives and maximize employee productivity.

After a very short yet successful trial, EL AL opened their “Sell & Fly” program to the full travel industry.

Reaping the Rewards

Right from the initial pilot stage, EL AL explored the ability to dynamically improve flight capacity and the option to pinpoint specific flight / class / date…. This, obviously, became more evident and visible after the pilot stage.

This ability had two important results:

  • Sales increased by 20% for a continuous period, not just at peak times
  • Market share increased significantly, leading to decrease in market share of the competitors

The Program (and INCENTIVES-SPM system) turned a complex relationship between EL AL and travel agents into a positive one. As Uri Danor – Israel Sales manager – said in an interview: “The Sell & Fly Program powered by INCENTIVES-SPM, offered us the ability to have an ongoing positive communications experience with the front line travel agents. We are up-close and personal with our distribution channels as people.”

The quality of the information collected in INCENTIVES – SPM, enables the marketing team of EL AL to address marketing opportunities immediately and conveniently. The Business Intelligence received from the system enables to identify the personal characteristics of the front line agent. The more information EL AL has on business partners, finer segmentation can be created and the more targeted initiatives can be offered.

Last but not least, the “Sell & Fly” program became the anchor application in EL AL’s portal for travel agents. This led to higher traffic in the portal and exposed the travel agents employees to important data and promotions that EL AL initiates.