A traveller is promised to be rewarded from the start when they join a loyalty programme. Considering the fact there are different market segments, it is imperative for airlines to come to grips with members understand and remain engaged with the benefits being offered or delighting them what they can do with the currency.
A major question that loyalty specialists delve into while looking at the design and performance of their initiatives is related to contribution of their target customer segments. Accordingly, airlines introduce features and offers around accrual, redemption, status, seating, boarding, baggage, non-travel ancillaries etc.
Oliver Ranson and Mark Ross-Smith explored the same during Ai’s webinar yesterday, discussing key aspects such as how can airlines prepare for different segments and letting members attain a tier, maintain it and in what circumstances the same expires, especially in the context of what has happened in the last two years or so.
The duo evaluated what products need to be tailored for different market segments, for instance, tailoring one for a segment called self-funded status chaser, acting on what motivates them in today’s context, justifying their spend for them etc. There was a discussion around the percentage of status holders, the related ticket spend, what can be done to step up stickiness to a programme and factors associated with it, for instance, apt products, the extent of price sensitiveness etc. Also, the tactics that can be deployed and how to swell revenue generation for the programme.
Ranson highlighted that all flights aren’t full and ticket prices currently being “high”, airlines need to identify certain flights and accordingly looking at their promotional campaigns. “Evaluate who (loyalty programme members) hasn’t flown for a while and how to get them back (to fly),” he said. Ross-Smith also referred to status extension being offered for free, stopping the same post this year and rather looking at other ways to work on the same. Ross-Smith also spoke about counting on the credit card proposition and how it can be used as a glue. What locks a traveller with an airline, in addition to the status, is also the credit card proposition. Airlines can focus on offering certain benefits such as status, then moving onto capitalising on the credit card offering and working on ways to support the purchase behaviour of members.
By Ritesh Gupta, Ai Team
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