The Low-Cost Carrier and Digital Threat to Loyalty and Points Programs
Skift Take
Since the creation of American Airlines’ frequent flyer program, what was meant to be a simple scheme to encourage repeat business has evolved into a shadow currency funding a large business sector that reaches across to all travel products and to banking institutions. It’s difficult to imagine all of that crashing overnight, or that it would be allowed to crash at all. If Jacobs happens to be right, then it’s bound to crash eventually, but there should be time to see the bright lights coming from the opposite direction.
Are loyalty and milage programs stale, and representative of the needs of an older generation?
That was the suggestion of Ryanair’s CMO, Kenny Jacobs, during a panel session at the World Low Cost Airlines Congress in London.
“Loyalty is still important, but loyalty schemes are a lot less important in the age of digital,” he said. “That’s borne out in retail and I think it is being borne out in the airline business.”
Jacobs believes there are better ways to give incentives to passengers for repeat business: low fares being the greatest incentive, but the airline is also considering creative rewards, in exchange for reviews of destinations, for example, and similar schemes that, he suggests, relate better to buyers in a digital age.
Plastic and Golf Clubs
“In terms of a piece of plastic that says ‘Kenny Jacobs Miles and More’ with a little with points attached to it, and a catalogue for me to browse new barbecues and golf clubs, I don’t think that’s modern anymore, and it’s not something we would be looking at. We’d be looking at much more targeted and personalized offers, where a customer says, ‘Wow, that’s actually going to save me some money.’
More Miles and Starbucks
Jay Sorensen, President of IdeaWorksCompany, consultants to airlines on marketing programs, including loyalty programs and ancillary revenue, tells us that Jacob’s poi
