Tag Archives for loyalty marketing.
The airline didn’t just offer the status challenge, what they’re highlighting as unique is that they actually had a communications plan with members who registered to get more information from the customers in exchange for 500 miles (where they want to travel) and then followed up marketing destinations to those members.
The State of California is putting loyalty programs on notice that provisions of the California Consumer Privacy Act dealing with ‘financial incentives’ apply to them, and they’re being given 30 days to come into compliance with the law.
American Airlines is sending out apology e-mails to customers explaining how they made the right decision in cancelling so many flights, and they won’t do it again because they’re staffing up.
But the message fails loyalty marketing 101.
Customers who earned their status the hard way for next year, rather than just having it extended, have something of a legitimate beef with their brand. They’ve chosen their travel provider, trying to earn their status. They’ve selected less convenient flights, sometimes connections rather than non-stops. They’ve chosen less convenient hotels. They may have paid more than what competitors were pricing their products at. And they’ve done all of that all while accepting lower levels of service (fewer meals in airline cabins, limited housekeeping or breakfast benefits and closed club lounges at hotels).
The principles of loyalty marketing can be applied across industries, and the basics are very much the same: recognition (elite benefits) and reward (redemption). While the most successful programs have been in travel – airlines have turned their marketing programs from a cost center into a profit engine – loyalty marketing is important to anywhere consumers make repeated choices.
The Maldives is trying something new with a destination rewards program with three elite levels. Here’s hoping they offer status matches!
Loyalty programs need to stay relevant. When people aren’t traveling, they aren’t engaging with the brand. Expect co-brand credit card applications to fall. There will be fewer new customers, and perhaps even more people than usual will cancel cards when annual fees come do. Both the number of active members of a program will drop and the size of the credit card portfolio will decline as well. The volume of card spend is likely to fall in recession.
Yet loyalty programs are key to a travel brand’s resurgence. What should they be doing?
Your frequent flyer accounts are more than rewards for your behavior. They’re also data that’s valuable, too. So is your credit card spending. Banks don’t just give you points, get transaction value, and make money on interchange (merchant swipe fees) and revolve (interest). They generate intelligence about your buying behavior that can be rented out to companies that want to sell more to you.
When data is hacked, we hear about biographical information that’s taken – name, address, e-mail address, and we worry about social security numbers. That’s not even the really valuable stuff.
Loyalty marketing is a near-universal. It has two components, recognition (elite benefits) and rewards (rebates). Different elements move the needle more for different customers, different businesses can authentically utilize each in varying proportions, and some products can truly replace traditional awareness advertising with loyalty marketing while others need to first generate broad attention.
When a business develops a relationship with a customer it doesn’t always realize it.
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
