12th September, 2022
Airline status is less stable than it has ever been and airlines must keep an eye on the behaviour of those elite members or co-brand card holders.
If airlines haven’t done anything attractive to elicit any sort of action (flying or anything substantial in the earn-and-burn cycle) during the extension period, are they in danger of status holders considering another card?
“(There is) potential for mass switching over the next 12 months,” highlighted Phil Gunter, Director, StatusMatch.com during a webinar by Ai Events last week.
This is considering the fact status extensions are set to terminate and also customers are set to get back to flying on a regular basis, added Gunter.
Stuart Melim, CFO, StatusMatch.com mentioned that airline status and co-brands are massively aligned and this overlap can play a part in retention. “75% status tier members hold a co-brand,” he said. Active elite status members are the largest group of loyalty members who hold co-brand credit cards. At the same time, it can also impact acquisition.
Keeping old ones and targeting new ones too
Melim said the proactive and loyalty savvy companies need to revisit the status match initiatives and assess what tends to bog them down. For instance, how to turn the same from being a manual process to an automated digital one, real-time etc. so that the same can pave way for more conversions, engagement, sales and co-brands. The goal should also be to target metrics like lower customer acquisition cost and cut marketing expenditure. The key question: are customers keen on targeting another loyalty currency balance and exploring options related to earning the same and the sort of rewards being offered?
Other than explore status match campaigns as an effective acquisition tool, airlines also need to look at their respective co-brand portfolios. Think of unused rewards or any other aspect that shows inactivity or lower spending on the part of elite members, why aren’t they taking action? It is important to understand the link between how much these cardholders earn, their spending pattern, miles they earn and eventually what story unused rewards depicts.
By Ritesh Gupta, Ai Events
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