14th June 2024
Airlines encourage frequent flyer program (FFP) members to undertake certain initiatives, for instance, a minimum number of flights to keep a particular membership status intact.
On top of their respective FFPs, it is quite common for airlines to offer a co-brand card that links the spending and loyalty currency accrued.
All this activity by a member conveys a lot about their profile. With more interactions, there is plenty of data and if rightly acted upon, the association only grows stronger.
But what if the coupons offered or FFP’s loyalty currency accrued can’t be used the way a member wishes to. What is being done to take care of the relationship, when a loyal member isn’t able to take a desired action?
Consider this example. As a traveller, I buy Air Vistara’s co-brand card for a fee and the same guarantees a certain status for a year. As much as one can enjoy perks like priority check-in, boarding, lounge access and so on, there is a scope for improvement when it comes to the usage of a complementary business class ticket, which has a limited validity. These tickets are offered whenever a traveller attains a spending milestone with the card. Despite trying to avail the same well in advance of the validity, and that too on a couple of occasions, it didn’t work, and the tickets were unused.
In such scenarios, airlines tend to explain the concept of “redemption seats and revenue bookings” being distinct categories! A free ticket is expected to be availed not to understand restrictions.
Points to ponder:
- How are airlines looking at forecasting when it comes to rewards, coupons etc. and adjusting the same on an ongoing basis to calculate breakage vs. engagement today?
- How can airlines make better use of 1st party data to ensure a member’s expectations are met (for instance, availing a free ticket or upgrade on a family member’s birthday)?
- Are the questionnaires that a loyal member fills up being acted upon for further one-to-one interaction in case of a suggestion or an indifferent experience?
- If redemptions are secret sauce to running an airline loyalty initiative, what is the benchmark for the redemption rate for air travel and non-airline products?
- How does an indifferent experience like unable to burn miles or use a coupon impact CLV?
So, what all can done in this arena?
Hear from experts at the upcoming #MegaEvent2024:
https://www.aiconnects.us/mega-event-2024/
By Ritesh Gupta, Ai Events
Follow Ai on Twitter: @Ai_Connects_Us
