Aeroplan integrates data with partners to grow rewards program

Aeroplan is making it easier for rewards partners to link up with its system for real-time mileage redemption.

Using a Web services deployment system from Reactivity, Aeroplan is able to provision and secure connections to outside partners to grow its loyalty program. As a result, it’s planning to expand its rewards business 500 per cent by 2007. It also rolled out seven additional real-time services, connecting its Web site in Toronto with back-end systems in Montreal, during the first six months following deployment.

Aeroplan, which has more than five million members, sells miles to some 60 partners representing more than 100 products and services, including airline, credit card, hotel, car rental, retail and entertainment companies.

“Redemptions are a critical component of our business because the more redemptions we do, the more we can actually recognize revenue,” said Andre Hebert, vice-president of technology and eBusiness with Aeroplan in Montreal. “You can only recognize revenue when the miles you’ve been issuing are used by the member, so there’s a big thrust at Aeroplan to actually get people to burn their miles.”

When Aeroplan decided it wanted to expand its loyalty program to include rewards other than air travel, it had a slight problem. “The company Aeroplan is part of doesn’t sell anything – they sell tickets,” said Joelle Gropper Kaufman, vice-president of marketing with Reactivity Inc. in Belmont, Calif. “So they needed a way to offer other products that they don’t sell with vendors who accept cash and reconciling the miles for cash.”

In this case, the Aeroplan miles are currency, she added. “They’ve got major mainframes that deal with your account, your balance, your exchanges, fraud detection and proper use of these miles.”

The challenge was to link its existing mainframe-based information systems with reward partners’ systems in a secure manner for real-time mileage redemption. And it required the ability to scale easily as its loyalty program expanded to include new partners.

“Our biggest challenge was to externalize some of our database to outside parties,” said Hebert, “and the first implementation was really to allow redemption partners to come in and do transactions with us in our system.”

Aeroplan rolled out Reactivity in 2004, which included a cluster of Reactivity Gateways that proxy Aeroplan’s services and the Reactivity Manager that allows Aeroplan to provision new services and partners, create and deploy policies, and monitor events and messages. The Reactivity Manager provides dashboards with searchable information on message traffic to help manage the XML Web services connections.

Aeroplan used XML for standards-based integration, since its partners range from large companies to very small ones – and it didn’t want to incur the cost or hassle of custom integration with each one of them.

“It prevented us from having to spend hundreds of thousands of dollars to design something that would have been more restrictive and would probably not offer the same level of security,” said Hebert. “We’ve got all of the scalability necessary to bring in as many partners as we could potentially want.”

Aeroplan can add new partners to the system in less than two hours. “The time to connect a new vendor is bordering on trivial,” said Gropper Kaufman. “They still have to negotiate, but the IT work has gone from being the barrier to being a non-issue.”

Aeroplan and Air Canada are also routing all portal traffic to their back-end systems through the Reactivity Gateways. The infrastructure is managed by an outsourced IT support team at IBM’s data centre in Winnipeg.

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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