7th March 2016
Airline strategy and customer loyalty
Does loyalty have less of a role in the wider airline strategy than in years gone by? Probably not, but the role of loyalty programmes is definitely changing.
Customers have more opportunities to compare ticket prices between carriers than ever before, and are much more willing to cherry-pick offers with little regard to carrier loyalty. So what is the role of loyalty in the digital travel age, and how can carrier’s best leverage it?
Customer loyalty has been a crucial aspect of airlines’ strategies since American Airlines launched the first modern frequent flyer rewards programme in 1981. Offering loyal customers benefits such as free flights and upgrades ensured they kept coming back.
Now loyalty programmes aren’t just about being able to offer customers incentives to choose one carrier over another, they also provide airlines with one of the most valuable assets in the current environment: information.
The data generated by loyalty programmes allows marketing departments to target customers with the services they value most.
Offering miles for something other than the price of a ticket isn’t the only way airlines are experimenting with their loyalty programmes.
Many carriers are also loosening restrictions on how customers use their miles, allowing them to gift them to a family member or friend, or by allowing them to use programme points on another airline.
These changes help increase the value of their frequent flyer miles, which in turn drives more travellers to sign up for them.
Far from being a relic of the past, customer loyalty is more central to carriers’ strategies than ever before, even as it has become harder to maintain.
To take advantage of this, more airlines are finding new ways to leverage their existing programmes, add more value to them, and are experimenting with new ways to make them more flexible.