Ellen Toobin, MBA ’20, wrote this for the Olin Blog.
I believe in the power of connecting people around the world. This summer, I had the opportunity to work for a company that makes that possible on a massive scale — American Airlines.
As an intern with the small and medium business strategy team, I tackled the question of how to increase customer loyalty in the business-to-business environment.
I worked with American Airlines Business Extra, a points-based loyalty program for small and medium businesses. Today, the program treats all its active customers the same, rewarding earned flight miles with points that can be used by the company’s travel manager for award redemption.
American Airlines has the opportunity to use targeted incentives to motivate the traveler as well as the travel manager to fly more often by differentiating between its customers.
To evaluate tiering the program, I considered three key criteria: the customer’s needs, where American Airlines finds the most value and the revenue opportunity and costs driving stretch behavior could create. I also considered Business Extra’s role in the suite of other small and medium business products American Airlines offers.
Through this analysis, I concluded there could be significant value in tiering the program, however, the additional liability of rewarding customers may not be offset by stretch behavior alone.
This internship afforded me the opportunity to travel extensively both as a “non-rev” or standby passenger and officially with the company.
My project took me to Madrid to meet with American Airlines’ joint business partners, British Airways and Iberia. I presented my analysis about the opportunity to tier Business Extra to the executives at our partner airlines and experienced how business can be conducted on a global scale.
I found that Peter Boumgarden’s class “Power and Politics” came in handy when navigating the delicate waters of international joint business agreements.
The American Airlines internship was rich in exposure and adventure. Biweekly lunches with leadership gave us a full picture of the complexity of the airline business. We toured the international operational control center and the flight academy, where we got to sit in the flight simulator. I’m not ready to fly a plane, but it was an experience I’ll never forget.
I’m grateful to Olin alum Harini Venkitarama, MBA ’18, who helped me prepare for the Forté conference long before school started. I’m also thankful to the WCC, which helped me prepare for my interviews even before I’d ever entered an Olin classroom.
Finally, I’m thankful to American Airlines for helping me transform from a first-year MBA to a more confident business woman ready to take on the world.