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Below is an extract from our report earlier this year, The Reinvention of Airline and Hotel Loyalty Programs, focusing on strategies for how marketers can capitalize on new innovations in tech and shifts in traveler behavior to build more genuine customer loyalty and larger profits in the future. For more get the report.
For as long as loyalty reward programs have been in place, travelers have been creating ever-more-clever tactics to exploit them to their advantage. It wasn’t until the late 1990s that the numerous “mileage hacking” tricks began to formalize via online forums like the ever-popular Flyertalk, which helps travelers share deals and loyalty program knowledge.
In the last 10 years, a number of travel media sites have come into existence that focus specifically on loyalty deals. Two well-known examples are The Points Guy and Airfarewatchdog, which help consumers track and decipher the marketing double-speak behind the latest loyalty offers.
While Flyertalk may not have been the first mileage running forum, it is arguably the web’s most influential community— many of the websites that focus on finding and publishing loyalty program deals gain their insight and insider deal knowledge tips primarily from Flyertalk’s forums.
Whatever the preferred site for loyalty deals, the impact of these websites on customer perception of loyalty programs is clear. They’ve created transparency and sameness among the various loyalty offerings, leading to a degree of parity the travel brands created loyalty programs specifically to avoid.
To combat the trend, some airlines are partnering with online communities like Flyertalk to build listening posts for planned loyalty program changes and float new deals, generating advance word of mouth.
KLM’s proprietary In Touch Community, for instance, was specially developed by the airline to gauge the impact of potential loyalty program changes on elite customers.4 United Airlines as well as British Airways’ Open Skies program have long-courted the Flyertalk community to gain an increased understanding of their loyalty programs’ perception among travelers, solicit advice on potential changes and test out new program rewards.
Participation and response is a key component of these types of outreach efforts, as there is a high-degree of suspicion among community members. “The problem [loyalty marketers] run into…is they go from being someone who interacts with the community to someone who is simply an offshoot of the marketing department,” notes Miller.
As the increasing knowledge sharing by these communities creates transparency and parity among travel companies, marketers must take it for granted that special “insider deals” are going to be circulated much more widely than originally planned and act accordingly. There’s no such thing as a “members only” discount when it gets shared with everyone.
The challenge then is to design loyalty programs that don’t simply push the latest offer to these communities, but genuinely engage the community in such a way to listen to key requests and offer one-of-a-kind rewards that are not easily replicated.
For more get the report.