Loyalty Programs: Technology & Customer
With more and more airlines shifting their loyalty programs from miles based rewards systems to revenue based models, properly understanding revenue based loyalty strategies is now more important than ever. In our last post, we talked about the numerous advantages of revenue based loyalty programs: their simplicity, transparency, and decreased liability risk.
In the second post of our two part series on Revenue Based Loyalty, we'll focus on both the human and technological elements of Revenue Based Loyalty. Ensuring that your customers are not affected too much by a transition is key, but equally important is the ability to use next generation IT solutions to efficiently manage your programs.
4. Don't Forget About Price Sensitive Travellers
A price sensitive frequent flyer is often a more consistent source of revenue that helps to maintain a predictable positive cash flow. However, the members who used to buy early and chose lower fares are disadvantaged because of their lower revenue contribution. In order to retain their interest, it is important to pamper them with initial bonuses and benefits, so as not to discourage them through the new revenue based policy of accruals.
5. Help Members Overcome Their Emotional Attachment to Miles
For more than three decades, airlines have endorsed miles as an iconic loyalty offering. Though the revenue model is meant for all, it might be appreciated by only a few. Therefore, it is very important to inform and educate members about the new benefits so that they are prepared to embrace the change wholeheartedly. It is suggested to follow the method of Delta Airlines and plan for rigorous campaigns well ahead of the initial launch.
6. Rework Your IT
Airlines have so far used Frequent Traveler List (FTLs) issued by DCS to passively process accruals for their loyal members. As the revenue model also promises profitability along with better loyalty experience, for best results, it is imperative to bring loyalty closer to airlines' core IT systems more importantly the revenue accounting system. A loyalty system closely integrated with other core systems like booking engines, GDS, and revenue accounting systems to award miles on air fare and ancillaries run real time promotions and support other important features like any seat redemption.
Therefore, although revenue based accrual programs do not have the same cultural clout as the frequent flier miles of old, the advantages that they provide are significant. With a combination of smart marketing and next generation IT solutions, revenue based programs can deliver an unprecedented and streamlined new era of loyalty management where business and customer interests are at an optimized confluence.