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Frequent flyer programs hold an important place in the history of customer loyalty. When first launched, they were the genesis of points-based systems, which means that they’re responsible for the contemporary loyalty paradigm. With frequent flyer miles, airlines were able to give consumers an incentive to fly with their brand, even if the particular flight that the consumer was looking at wasn’t the cheapest or most luxurious. If you flew with a competitor, you were blowing an opportunity to accrue points that could be redeemed for a free flight, an upgrade to first-class, or something of that nature.
Numerous industries have adapted the points-based system to suit their needs. Kroger, for instance, used discounts on gasoline to drive loyalty for its grocery and pharmaceutical retail outlets. Still, it’s fascinating to see what airlines are doing now with points. After all, the competition between airlines remains intense, and rewarding loyal customers is in no way less important for the industry today than it was when the first frequent flyer programs popped up in the late 70s. For example, as our research has shown, programs need to provide personalized offers, experiences, and communications now more than ever.
Earlier this month, United Airlines upgraded its United MileagePlus X app in order to offer the program’s members “unique opportunities to earn award miles for everyday purchases.” This program continues United’s longstanding partnership with Visa.
Once you’ve registered for the program, downloaded the app, and opened it up, you quickly see that there are many more partnerships at play here than the primary one with Visa (currently, the app offers a hefty 1,000 miles for signing up for Visa Rewards). For instance, the app uses your geolocation data to identify nearby businesses that offer gift cards. If you purchase a card through the app, you get a certain number of miles per dollar loaded onto the card. Interestingly, it varies from company to company; Panera Bread gets you 5 miles per dollar, while Starbucks gets you 1 mile per dollar.
The app further motivates purchases by using your geolocation information. It reminds me that I am 0.0 miles away from Panera Bread, where I can use a gift card. The app also plugs the separate MileagePlus Dining program, offering 2,500 bonus miles for signing up.
These various rewards call to mind the T-Mobile Tuesdays program, which offers rewards for a range of brands. Both programs keep customers loyal to the primary brand through minor (and short-term, in the case of T-Mobile) partnerships with a variety of brands—so many different brands that virtually any consumer will find something that he or she likes.
A movement toward “simplicity” is a major force in loyalty today. Whether points are simple enough has not yet been decided. The United MileagePlus X app is, in some ways, rather complicated, with an involved sign-up process (I was asked for a good deal of personal info, but no credit or bank information) and a multiplicity of in-app options. All that said, frequent flyer programs maintain an innate simplicity in that, no matter what processes you’ve been through, you ultimately redeem points for flights. Or, more simply still, you just “earn miles.”
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