Why Airlines need to re-design their loyalty programs

Today, I was reading an article “Why Airlines Need to Reconsider What “Loyalty” Is Today…”. This brought back a few questions to my mind.

I work for an MNC and my work involves a lot of travel within India. My company has a corporate deal with an airline (Jet Airways) in India to minimize the cost of travel. So, most of the times, I am required to take a Jet Air flight. I do not like flying Jet but do travel quite a bit in Jet due to the company policy. The company also allows me the freedom to choose a different airline if there is no Jet Air flights available at the time I want to fly.

Now, 80% if my travel in the past couple of months have been on a different carrier – Indigo.  How? I plan my trips in such a way, that there are no Jet Air flights available at that time and hence I am allowed to choose the carrier I want to use to fly.

There are some interesting lessons to be learned from this behaviour for both Jet Air & Indigo.

For JetAir:

  1. I did fly a lot on Jet Air and will continue to use them every now and then. This allows me to collect frequent flier miles on that airline. So, should Jet Air consider me as a loyal customer ?
  2. What kind of offers can Jet provide me in order to continue to attract me?
  3. Do they know if I am flying with them most of my trips or also using competing airline carriers?
  4. How can they find out how much could i be worth to them in terms of revenue?
  5. How can they find out if I am a loyal customer with the airline? If yes, how can they continue to keep me happy & loyal? If not, how can they convert me into a loyal customer?

For Indigo:

  1. How does Indigo know if I am a loyal customer (which I am)
  2. What could Indigo do to increase my loyalty and make a fan out of me?
  3. How can Indigo leverage my loyalty and help me spread word about how I feel about Indigo?

I think there are a few trends and technological advances which now allow organizations to be able to profile their customers to this level of granularity. The combination of advanced analytics, social media and big data capabilities now offer the power of making individual offers to select profiles of customers possible.

Now imagine the following:

  1. Jet realizes that I am only using the Jet airways when I do not have an option, they can initiate contact to understand why I do not use Jet all the time.
  2. Jet creates and delivers special promotions personalized to me to win over my business.
  3. Indigo, on the other hand knows that i like travelling their airline. So, they provide me opportunities on the social media platform to promote or atleast to show that I like travelling Indigo to my broader network.
  4. They could tailor their offers to me in order to continue to retain my loyalty.

In the end, its the customers who win and the organizations that provide true customer value (personalized) will win the business in the long run.

 

4 Replies to “Why Airlines need to re-design their loyalty programs”

  1. An impressive share! I have just forwarded this onto a friend
    who was doing a little research on this. And he in fact bought me lunch due to the fact that I found it
    for him… lol. So allow me to reword this…. Thank
    YOU for the meal!! But yeah, thanx for spending
    time to talk about this matter here on your blog.

  2. We are a group of volunteers and starting a new scheme
    in our community. Your website offered us with valuable info to work on.
    You’ve done a formidable job and our whole community will be grateful to you.

Do share your thoughts and continue the discussion