As US airlines move towards revenue-based frequent flyer programs, they’re taking the most successful marketing innovation in history that managed to turn a commodity product (a seat that takes you from A to B) into something consumers had a strong brand preference for and they’re re-commodifying it.
I’ve remained genuinely surprised at the rush to do this given that the programs as they’re currently constituted are wildly financially successful. They’re billion dollar standalone businesses. It’s rather amazing, because for almost every other industry marketing is an expense line not a profit center. And they’re very much risking that.
Peter Sheahan, author of Matter (and a United Global Services member), thinks companies are missing the boat on loyalty program design.