In the last 40+ years, there have been major changes to the world as we know it. Walkmans are all but gone, cell phones gave way to smart phones, and rollerblades are a nostalgic throwback, but airline loyalty programmes have remained relatively unchanged, until now.
According to the general manager of FCM Travel South Africa, Bonnie Smith, the pandemic gave airlines the push needed to innovate and, in some cases, reinvent their loyalty programmes.
“The sector is brimming with activity, and airlines are competing for customer attention and retention. It was not that long ago that airlines had to do little to attract customers to loyalty programmes. Perks were plentiful and downsides were few. That’s changed somewhat, especially in recent years,” she said.
Smith believes that while the perks have remained attractive by most standards, customers have become more scrupulous and more intentional with their choices. Airlines have responded accordingly, revising their offerings and in some cases introducing new models.
“The business travel landscape has changed. Travel managers and frequent flyers are exploring their options. Many business travellers participate in several airline loyalty programmes at once, and airlines have been forced to think outside the box to encourage brand loyalty,” said Smith.
Here are four things you need to know about airline loyalty programmes, according to Smith.
The rise of subscription models
Subscription models created a new revenue stream for airlines, Smith said. Benefits, ranging from ‘fast track’ options that allow passengers to proceed more quickly through airport checkpoints, to priority boarding, and lounge access, offer passengers high perceived value at a low cost.
“For airlines it’s becoming a lucrative model: paid loyalty pays. To that end, some airlines have developed tiered subscriptions that offer better benefits and rewards to the higher levels,“ said Smith.
Emirates is a case in point, offering three levels of subscription through its Skywards+ programme; Classic at $399, Advanced at $699, and Premium at $999. In addition to each level’s increased perks, members also get additional air miles, preferential rates, more lounge access, and better allowances.
Strategic partnerships and personalisation
Partnering with brands that are aligned or offer complementary services is a tried and trusted method to build loyalty, and airlines have long been wise to its value, Smith said.
“In order for airlines to offer better services to loyalty members, they need to go deeper. They need to build stronger, deeper connections with members and that requires data sharing between partners. More data creates better insights, and the result is a better product for the end-user,” she added.
Conscious considerations, everyday spend and gamification
Airlines have significant impact on the environment, and although efforts are underway to curb that, there’s a long road ahead. As such, some airlines have begun adding environmental, social and governance (ESG) incentives to their rewards programmes, led by Etihad’s Corporate Conscious Choices.
The first-ever sustainability-focused corporate rewards programme, it aims to “recognise businesses and their employees for travelling more sustainably”. It accomplishes this through sustainable aviation fuel investments and green surcharge fares, climate-smart travel, ESG initiatives, and raising partner profiles via public association.
The permeation of gamification into everything is undeniable, and loyalty programmes are the perfect vehicle for implementation. In fact, a recent study found that applying gamification to the loyalty marketing resulted in a 10x increase in engagement.
Travel management companies and loyalty programmes
And lastly, Smith said the variety and abundance of loyalty schemes, both at an individual and corporate level, can be overwhelming and therefore travel management companies can help travellers navigate the complexity of the various loyalty schemes available.
Although the protection of data means travel professionals are no longer able to redeem loyalty on behalf of the client, they are still a great source of information for travellers who want to maximise the benefit of their loyalty programmes.
“The airline industry has made significant strides in loyalty programmes since the early days of air miles. Airlines are now constantly innovating and staying on top of trends and traveller demand, offering better offers and benefits, with additional corporate incentives. In short, there has never been a better time to join a loyalty programme,” said Smith.
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