SERVICES LOYALTY CUstomer loyalty Global Flight’s Ravindra Bhagwanani on why there is growing recognition among that frequent flyer programmes are a means to an end in the customer experience, not the final objective

t is not easy to distinguish one single global trend among loyalty pro- grammes. For many their frequent flyer programmes (FFPs) are characterised by their own individual challenges. I This can range from the requirements for joining an alliance, as Xiamen Airlines and Airlines have just done, to merging two programmes as LAN and TAM are about to do, to generating cash for survival by spin- ning off the FFP, as in the case of Air Berlin. But aside from such pressing issues, which often push more strategic considerations off the radar, there is a revival of a more customer-cen- tric approach in loyalty departments around Take your seats for loyalty 2013 the world. The days when airlines thought only about themselves when developing their Chadi Abou Daher, ’ Loyalty 2013. The event will be held on 25-27 loyalty programmes seem to be over. director of customer services, is among a February 2013 in Dubai. For details of the Airlines have lagged behind other sectors in number of top level industry speakers at the programme and how to attend visit: getting the message, but they are starting to Global Flight/Airline Business-organised Loyalty-conference.com understand that loyalty programmes are not an objective in themselves; they are part of the total customer experience management and part of elements in MEA’s strategy to enhance the reputation for god customer experience, but an even wider customer-relationship manage- customer experience. There are opportunities traditionally do not approach the topic from ment. The real role of loyalty programmes can in these areas to do things in a cleverer way by the FFP angle. These carriers often joined the only be understood when looking at things putting the customer in the heart of things. FFP game late, so their initiatives have their from the customer’s point of view. Airlines have also started to reconsider origin in an honest customer orientation. The use of tablets, with stored passenger- some of the basics of loyatly programmes. Combining the best of both worlds, using such and frequent flyer information by cabin crews Most FFPs reach out to only 20-30% of an air- efforts with a closer strategic link to their loy- at , recognised in the awards at line’s unique customers. This raises the ques- alty strategy, would yield even better results. the 2012 Loyalty conference in Berlin, and tion how relevant they are in their current Strengthening such customer focus will are classic examples in this form are for the majority of their customers. obviously be well received by passengers. But area. But even without such considerable Many airlines are working to extend their customers identifying more with an FFP will investments, there is plenty of room for smaller reach, for example, by introducing new also contribute higher revenues to an airline, airlines to act in a customer-centric manner. instant-reward options, such as Etihad’s con- so any such revised strategic orientation will Middle East Airlines (MEA) is one such version of any mileage amount into cash definitely pay off for airlines. niche carrier, with a reputation of deploying loaded to a virtual credit card. It is time not to reinvent loyalty, but to total customer experience, resulting in a Increasing the penetration rate of FFPs not recall what the basic element of any success- strongly loyal customer base. However, Chadi only helps to exploit upsell potential, but also ful loyalty strategy consists of – customers Abou Daher, MEA’s director of customer serv- helps build a more comprehensive database. accepting it. And thereby, MEA’s Abou ices, warns this is not easy: “At MEA we rec- There is also a need to find cost-efficient Daher’s advice might be worth more than any- ognise that our passengers’ top priorities are ways to better serve less frequent travellers. thing else: “The key is to keep it simple.” ■ recognition and rewards. Yet they may scale While that investment risks not delivering such them differently, and their expectations keep a direct return, creating a good reputation has Ravindra Bhagwanani is managing evolving, which could put some stretched loy- indirect benefits, especially in a world where director at Global Flight, a specialised alty programmes under a strain.” social media is ever more prominent. FFP consultancy. Together with Airline He cites online tools, airport-priority serv- Some low-cost carriers such as JetBlue, Business, Global Flight organises the ices and a generous reward programme as key AirAsia or Cebu Pacific have built up a strong annual Loyalty conference

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