05 April 2018
Marketing agencies like to suggest the importance of branding issues. At least in the context of loyalty programs, this is certainly exaggerated – but loyalty managers need nevertheless to understand how to achieve a successful branding.
Branding plays a crucial role in the marketing mix when it comes to low-involvement consumer products. But in the case of a product such as a loyalty program supposed to enhance the customer experience and with the potential of being an engaging high-involvement product, things are a bit different. Ultimately, customers will discover what is beyond the cover – and like or dislike it independently of your branding. A loyalty manager spending more than 0.1% of his time on branding questions needs probably to shift his/her attention more to a true value creation for his members.
Nevertheless, the industry can do probably much better to leverage the soft factors of successful branding of loyalty programs. How to achieve it?
First, it is important to accept that the loyalty brand will always come second to the brand of the program operator. If the program operator has a weak brand – usually rather being negatively influenced by customer perception of the company than really being a branding issue -, this is close to mission impossible. But if you do have a strong brand at least within your core markets, chances are that you are successful with your loyalty branding, too. Things become, however, considerably more difficult for carriers outside of the Top 20 not having the brand power of the likes of Emirates, Lufthansa or the US majors.
And as with many other things in life, success in that area is not a question of chance, but of following a clear roadmap. We define some basic key criteria to make brands successful:
– Association with operating company
– Allusion to local elements
– Easily understandable that it is a loyalty program
– Exploitable in different languages
Looking at these criteria, let’s take Miles & More as example since they are just starting off their celebrations for their 25th anniversary. The program might not meet all of them – or more precisely even hardly any of them. But – on the back of the strong Lufthansa brand and with deep marketing pockets – they have indeed managed to create a recognisable and valuable brand on their own. And there was never a need to change the branding over these 25 years (or probably even consider doing so). It is even so strong that some competitors got inspired by it: Turkish Airlines launched its program in the early days – long before continuing to fight Lufthansa under the Star Alliance umbrella – under the name Miles&Miles. Only after having been sued by Lufthansa, they’ve changed it to the current Miles&Smiles. Aegean got certainly inspired as well by calling its program Miles+Bonus. Such similarities do, in the end, nothing else than endorsing the “mother brand”. (You have the same in the US with MileagePlus and Mileage Plan – even after more than two decades in the business, I still mix them up sometimes!)
But there are certainly other examples of successful brandings, even meeting better the criteria defined above. However, it is sometimes tricky to find the balance between the fully involved (local) customer and less involved international customers: While probably 11 out of 10 Ethiopians know about the role of Queen Sheba in the local mythology and making the brand ShebaMiles easily recognisable and lovable, the ratio risks being much lower with other customers. The same might apply to programs such as Sindbad (Oman Air) or Almaznaja Milja (Alrosa Airlines). The programs with a unique, though fully successful branding are, however, pretty limited. KrisFlyer is likely to be one of them. Or AAdvantage. It is though unlikely to be a coincidence that these latter carriers figure in the Top 20.
And with all love to your program, don’t overpromise either. Not sure whether members of Air Jamaica’s 7th Heaven program really felt there at any point or to what kind of dreams Rwandair’s rather basic Dream Miles is supposed to inspire.
Finally, there is a category of (coalition) programs, which deliberately ignores some of these rules to mark their strategic independence from the mother company – but become interchangeable as a result. Examples include Aeroplan, PINS (airBaltic) or Smiles (Gol) – many of them indeed strong brands in their markets, but not necessarily perceived as being linked to any airline anymore by the general public.
However, the majority of program brands does simply not leverage the potential of creating that emotional link. Without checking anywhere else on our website, you would easily be forgiven for not knowing immediately who owns the programs called AerClub, Airpoints, Bonus, Enrich, Fidelys, Flypass, Green Club, OPEN, Passport Club, Reward$, SkyGift, Voyager or Wings. They can basically belong to any airline – or often even to a retailer.
Fixing branding issues can be one the low hanging fruits everybody is looking for. It is your call whether you want to engage in a lengthy and costly process with a marketing agency for that or just rely on your gut feeling. But most loyalty managers should indeed reflect for a short moment (let me suggest during your shower tomorrow morning?) whether their branding does really support their business in any significant manner – or might even do harm to it.