Loyalty programs are cornerstones of the airline industry’s approach to customer engagement. For decades, frequent flyer points distributed via “miles” have become a longstanding staple for brands seeking ways to improve customer experience. However, if the goal of a loyalty program is to encourage customers to actually become more loyal, then new research shows that most airlines need to make more of an effort.
Aimia, a data-driven marketing and customer loyalty analytics firm, recently rated a host of UK airlines according to loyalty. The results for most were not overly positive.
Overall, only 7% of UK travellers consider airlines to be one of the top three services that earn their loyalty.
Loyalty programs, however, did play a role in influencing the loyalty of some. Of the customers that did express some level of airline loyalty, 23% claim to fly with a certain airline because of loyalty program benefits. Although, loyalty rewards were not the top influencer.
Reduced prices were the main reason why many people (29%) selected one airline over another. Additional factors included ease of purchase (10%), promotional discounts (10%), and endorsements from family and friends (8%).
But loyalty programs do have the opportunity to do better. The study also found that the right rewards would attract more customers.
A full 36% said they would like to be rewarded in a loyalty currency such as miles or points. Only 24% preferred to be rewarded with exclusive discounts and/or cash back.
“Low-cost flying is now the norm, but it’s not just about a race to the bottom on price,” said Charlie Humphreys, Aimia Managing Director of Business Development Emea. “Customers are looking for something in return for their bookings. A reward for flying and buying services from the airline is a compelling offer for many travellers. It also provides airlines with the opportunity to build more engaging and personal relationships with their customers.”
Of those that specifically noted their favorite airline loyalty program, 50% favored British Airways’ Executive Club, 31% enjoyed Virgin Atlantic Airways’ Flying Club, and 19% liked Emirates Skywards Miles.
Aside from loyalty programs, another key takeaway showed that most people are dissatisfied with the relevance of airline marketing communications. Only 22% said that airline messages were pertinent to their lives and interests.
Not only are airlines missing an opportunity here, there is also evidence that it’s actively causing customer dissatisfaction. A majority (69%) of UK residents have actually discontinued and “unfriended” airlines because of “poorly targeted communications.”
“Brands that send untargeted messages to their customer base risk pushing them away,” Humphreys concluded. “Airlines must do more to listen to their customers and ensure they only send communications that are tailored and relevant to their customers’ interests.”