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Airline Loyalty Frequent Flyer Programs a “Mega hit” Living Up to their Word

Airline LoyaltyAs a marketing director, “mega,” is a word I could usually do without. Too often it comes part of the package deal with any campaign that trumps volume over substance. We have mega department stores, mega sales, mega bucks, mega discounts, or my favorite pairing, “mega colossal.”

Thankfully, though, last month’s Mega Event in San Diego delivered. Several airline frequent flyer programs broke new ground in how they inspired passenger loyalty, heightened revenue and made payments domestically and abroad easier to manage.

The “Golden Age” of air travel gets a lift

Virgin America, acquired by Alaska Air, with its playful-yet-eye-grabbing presentation title: The 5-year-old Virgin – How Virgin America is Breathing New Life into Loyalty, was one to watch. This past summer Virgin announced an upgrade to its existing frequent flyer loyalty program, Elevate, where two new loyalty tiers, Elevate Gold and Elevate Silver, offer even greater benefits to elite travelers.

That may sound run of the mill, but it isn’t. Virgin’s program succeeds where other FFPs fail, breaking beyond the points-for-miles accumulation stereotype. Added to the mix are service offerings that improve the flying experience itself, like priority check-in, security clearance and boarding, free checked bag allowances, digital/social rewards, and an expanded purchase window for an eight-seat first-class section and complimentary best seats in the main cabin.

Many have written that the so-called golden age of flying was never that golden. Nevertheless, flying decades ago was an exclusive experience that carried with it a measure of distinction and elegance. Virgin America’s FFP upgrades are a nod to that type of specialized travel and are an ideal way to promote loyalty.

“Shop Like a Local” loyal to world travel

Air New Zealand was also a favorite as Nick Judd, head of the airline’s Loyalty Products and Relations division, began his talk with a video, promoting the airline’s new OneSmart Card, narrated by Kiwi television personality Phil Keoghan. Like Virgin, OneSmart Card allows for speedy domestic check-in. But the card also acts like an ATM/debit card, has no transaction fees, and offers users the opportunity to convert up to four foreign currencies and lock in exchange rates before travel.

While a lot of non-trade press likes to have a field day with ancillary revenues, fee-bashing, and the so-called nickel and diming of passengers’, their ridicule fails to appreciate two important facts: Fee-based ancillary revenues, e.g., baggage charges, food, drink and pillow expenses, headphones, etc. are only a portion of the ancillary mix. Vital for airline profit? Yes. But not the whole picture. And surveys like PwC’s 2012 Experience Radar repeatedly show that service-based ancillaries, like the ones interwoven in the two loyalty examples above are a preferred way to give passengers a better experience. In other words, paying for premium perks shouldn’t be seen as gimmicky ad-ons, but rather a creative attempt to curtail critical revenue shortfalls across the airline industry while giving passengers a better, more efficient travel experience.

This recognition shouldn’t come as a mega shock, but it’s something more people beyond travelers, Mega Event attendees, and airlines need to appreciate. Like other verticals, be it retail or hospitality seeking a loyalty program component, driving quality experience and engagement is the key in helping marketing substance trump marketing volume.

 

Kobie Marketing

Kobie Marketing