{"id":5279,"date":"2021-03-30T10:45:39","date_gmt":"2021-03-30T09:45:39","guid":{"rendered":"http:\/\/www.globalflight.net\/german\/?p=5279"},"modified":"2021-03-30T10:46:03","modified_gmt":"2021-03-30T09:46:03","slug":"adapting-loyalty-programs-to-leisure-travellers","status":"publish","type":"post","link":"https:\/\/www.globalflight.net\/german\/adapting-loyalty-programs-to-leisure-travellers\/","title":{"rendered":"Adapting loyalty programs to leisure travellers (?)"},"content":{"rendered":"\n
\"\"<\/figure><\/div>\n\n\n\n

30 March 2021<\/span><\/em><\/p>\n\n\n\n

Several voices claim that business travel will never return like before. If they were right, this would though also mean that loyalty programs with their traditional focus on business travellers are an outdated business model.<\/p>\n\n\n\n\n\n\n\n

Personally,\nI definitely agree that leisure traffic will rebound quicker than business\ntravel, but I am not as pessimistic for the future of business travel in\ngeneral. The last few months have rather shown the limits of what can be done without\nbusiness travel and the small share of business travel that can really be\nconsidered useless will be quickly erased by the natural growth of traffic.<\/p>\n\n\n\n

But general\nwisdom by market observers is that there will be a much stronger shift in\nfavour of leisure travel. This means though that there would be a need for the vast\nmajority of loyalty programs to redefine themselves. While many have moved to open\nup more towards leisure travels over the last few years, their bread-and-butter\nbusiness is still the business traveller.<\/p>\n\n\n\n

But are common\npractices like relaxation of expiry policies and the introduction of cash &\nmiles awards – Cathay Pacific is the latest example of airline introducing such\na feature right today in its Asia Miles program – sufficient to be appealing to\nleisure travellers? Adoption rates of loyalty programs on the basis of unique\ncustomers, which are typically well below 50% in most markets outside of North\nAmerica, suggest that this is not the case.<\/p>\n\n\n\n

It probably\nstarts with simple things such as terminology: an infrequent leisure traveller\nwould hardly associate his consumer behaviour with a frequent flyer or even a\nloyalty program. He\/she’d rather look for a discount program. If your program\nis moreover named something like Executive Club – or just anything else\nincluding the word „Club“ -, you already give the impression that you\naddress at a limited circle of wealthy persons (and that membership would probably\nbe paying), losing potential members. While such names reflect the history of\nprograms, they may constitute a limitation compared to more generic names such\nas Miles & More in order to attract a new clientele.<\/p>\n\n\n\n

Although\nadjusting such basics would already represent a paradigm shift for many, the\nwork would obviously not stop here. They would probably become more similar to\nthe most successful coalition programs we have out there, from flybuys to\nNectar, Payback and Air Miles – with a decreased visibility for the airline.\nThey would need to enhance considerably the data analytics and CRM\ncapabilities. The former Jet Airways program JetPrivilege, now rebranded as\nInterMiles, is probably a case study many things can be learnt from.<\/p>\n\n\n\n

But unlike\nInterMiles, which embraced on this transformation project because it had lost\nits parent airline, other programs still have their respective parent airline. Provided\nthe corresponding investments can be made, in terms of finances, resources and\nknow-how, such transformation is certainly not out of reach for anybody.\nHowever, the benefits need to be balanced against the risks.<\/p>\n\n\n\n

The more\nyou cater for leisure travellers, the less you tend to focus on business\ntravellers because technically, a loyalty program can hardly be everything to\neverybody. And the risk is that you’d lose much more here than you’d win on the\nother side.<\/p>\n\n\n\n

While\ncurrent times are harsh, it is important to keep a clear mind and not to get\nconfused by everything you may hear or read. The traditional Frequent Flyer Program\nconcept has proven its benefits for 40 years and it seems premature to write it\ncompletely off in spite of the current lasting downturn, which will though pass\nat one point.<\/p>\n\n\n\n

The more\npromising approach seems therefore to stick to the concept, which caters for\nthe most profitable customers, while continuing to explore ways how to expand\nthe reach into new market segments a bit. There are numerous best practice\nelements at programs around the world to get inspired from. Using available data\nin a more accurate manner is another area of quick wins for virtually all\nprograms, especially among such leisure type members.<\/p>\n\n\n\n

At the same\ntime, you should accept the limitations of the concept of loyalty programs and\nstand up for them. Even if there will be a temporary stronger focus on leisure\ntravellers in the market (with a resulting weaker activity for your program),\nmost experts would also agree that it won’t be possible to make substantial\nprofits with them. Adjusting loyalty programs to cater more for them would, of\ncourse, have an impact – but not be able to change significantly the underlying\nmechanisms of such price-sensitive market segments.<\/p>\n\n\n\n

Given all the\nwork ahead to secure your fair market share among a revitalised business travel\nmarket, the best advice would probably be to prepare for that situation while\ndedicating some resources for those quick wins to adjust to the current conditions\n– but to put 0% of your resources on reinventing the wheel since this would\nbreak your engine.<\/p>\n","protected":false},"excerpt":{"rendered":"

30 March 2021 Several voices claim that business travel will never return like before. If they were right, this would though also mean that loyalty programs with their traditional focus on business travellers are an outdated business model.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_links_to":"","_links_to_target":""},"categories":[37],"tags":[],"_links":{"self":[{"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/posts\/5279"}],"collection":[{"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/comments?post=5279"}],"version-history":[{"count":1,"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/posts\/5279\/revisions"}],"predecessor-version":[{"id":5280,"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/posts\/5279\/revisions\/5280"}],"wp:attachment":[{"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/media?parent=5279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/categories?post=5279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.globalflight.net\/german\/wp-json\/wp\/v2\/tags?post=5279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}