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Rewards Programs vs. Loyalty
Why is it that the top rewards statuses often go to the small minority of customers rather than those are who are most loyal to an airline?
If someone travels 10 times a year for business on expensive international trips, but does no other travel for a particular airline, it is entirely possible he/she will achieive 'top tier' status simply because of the $$ spent and miles traveled, rather than the quantity of flights taken (a truer measure of loyalty, IMO).
Further - should these different types of travelers be incented differently?
79 months ago
4 answers
Rewards go to those who bring in short term/annual revenue/profit. I was one of those multimillion mile fliers who made United Global Services (as well as status on other airlines). Then..........I........retired! The next year I dropped down three levels where I now have lifetime gold status. The point is they don't love me anymore. Yet now I am paying with my own money to travel the world in retirement spending probably 10x what I used to personally spend but it is economy pricing. Business travelers (especially International) are the bread and butter of the airlines.
78 months ago
From a pure commercial point of view, revenue/customer is a measure of loyalty. For argument sake, if a customer travels for free 10 times (or for $1 fare as some airlines offer) while the other pays full fare, which customer would the retention strategies be directed to?
79 months ago
I fly a ton and my loyalty is based upin the loyalty program gettingme miles and thats based upon revenue. In fact, you get the biggest points on the most profitable flights for obvious reasons. Its absolute profits, not revenue per se. Why would one as noted earlier reward the relatively valueless above that which is wirth far far more?
79 months ago
Adam Tank I think it would be extraordinarily difficult to convince airlines to share loyalty program members and data with each other in order to build a larger consumer profile, and then reward based on actual loyalty. I also agree with Adam Malofsky, PhD and Alok Jain 程艾樂 that the main driver for loyalty programs is going to be economics (he who spends more gets the most points) but I'd also like to add that most companies have memberships/loyalty programs because it's a great way to inexpensively collect data on consumer habits to drive advertising and sales.
I'm always amazed at how much personal/private information the average consumer is willing to give up just to save $20 annually. Even if that data is aggregated it's worth a lot more than the company is giving up, otherwise they wouldn't ask for it. I once had a grocery store ask to make a copy of my driver's license in order to let me open a membership card. I laughed at them and walked away.
78 months ago
