11th October, 2019
A recent podcast on loyalty, featuring Joanne Ward, David Canty, David Feldman, Alan Lias and Iain Pringle, discussed the significance of less frequent flyers, and how can they propel a loyalty progam even further.
Airlines are trying to dig deep to ascertain what a loyal member looks like beyond their own purchasing funnel. As highlighted in a recent interview with airline loyalty and big data expert, Mark Ross-Smith, if there is not much activity in the air, then why not be a part of an infrequent or a price-conscious traveller's life via activity on the ground? This consideration is starting to stand out in a striking manner in the case of low-cost carriers (LCCs) and how they are going about managing their loyalty programs.
A lot depends upon the business model, destinations covered etc., but typically looking at any loyalty program 80% of the members, if not more, tend to be infrequent flyers or guests. “Obviously they aren’t bringing in the same average revenue per member when compared with other top members they are still a huge group. It is imperative to assess what’s there in a loyalty program, other than price, that can add value, be it for any benefit or contributes in differentiation of the program. They are mainly leisure traveller in most cases,” mentioned Joanne Ward in the podcast.
Podcast link - https://lnkd.in/e5NE7vd
Alan Lias mentioned that it is important to assess what sort of “other” behaviour is relevant to a travel business. It needs to be assessed - are the travellers genuinely infrequent in terms of what any airline has to offer and if they are how does one create relevance for them. By looking at other things they are doing in their lives and by focusing on partnerships how can airlines end up being more relevant in such flyers’ day-to-day lives and potentially help them in achieving their goals.
It was also highlighted that those who fly infrequently with one airline might be flying with other airlines too. Also, a top member of one FFP possibly can have a similar status with another airline. Also, those who are part of a lesser number of programs offer an opportunity to be engaged. Are infrequent flyers more loyal?
A leisure carrier flying to leisure destinations, featuring infrequent travellers, has the opportunity to foster loyalty.
“Infrequent travellers may be most loyal (in the sense they are giving you a sizable chunk of their wallet). They may be flying infrequently, but they may be flying exclusively with an airline,” mentioned David Canty, from his own professional experience in the loyalty arena. Delving into it, he mentioned that by bringing redemption earlier in the cycle in a program and allowing them to redeem a lot quicker, the audience did look out for travelling again with the airline.
As for those travel brands that are focusing on infrequent customers, David Feldman highlighted Hilton’s approach towards opening up their loyalty program. It was referred to as an example (offering members the ability to pay for purchases at Amazon.com using Hilton Honors Points). Southwest was also picked for their penchant to offer value and serve infrequent travellers.
The attractiveness of a subscription-oriented progam was also discussed. One example is Mexican low-cost carrier Volaris’ decision to embrace the subscription model, v.pass.
“(It is seemingly) starting to make a re-entry into a new generation and something that’s resonating,” said Canty.
Agreeing with the same, Joanne said that Amazon has played a vital role in the same with Prime. A lot of retailers are also looking at that. “If you charge something to be a part of a programme, members can be given certain benefits that means more to them. Also as a member for spending $100 on annual membership you want to make sure that you are also getting something back,” she said.
Iain Pringle referred to two set of loyal customers - spenders and savers - one set is all for instant gratification (spenders), and the other tends to save for long-term rewards (savers). A balance has to be attained in a program to appeal to both the set of customers.
Some of the key points that were highlighted:
By Ritesh Gupta
Join David Canty, David Feldman and a host of other specialists from airlines and in the loyalty arena at the upcoming #MegaEvent, to be held in St Petersburg, Florida (29th–31st October) this month.