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Research reveals secrets to airline loyalty

airmarketnewsBuilding stronger relationships with frequent flyers is a business challenge that has faced airlines since 1914 when the first scheduled commercial airline, the St. Petersburg-Tampa Air Line, took its first passenger into the air.


March 20, 2008
By Carey Fredericks

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Building stronger relationships with frequent flyers is a business challenge that has faced airlines since 1914 when the first scheduled commercial airline, the St. Petersburg-Tampa Air Line, took its first passenger into the air. The “secrets” of flyer loyalty now have been published in a research report by Carlson Marketing Worldwide and Peppers & Rogers Group, Building Stronger Relationships with Frequent Flyers, The Secret to Loyalty Program Success.
         
The study identified four key factors in determining the strength of a customer’s relationship with an airline:

1. one-to-one communications,

2. a positive customer experience from ticket purchase to in-flight care to luggage handling,

3. keeping the brand promise in all marketing communications and employee behavior, and

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4. executing the frequent flyer programs well.

And when an airline builds stronger customer relationships, several important business outcomes follow:

·       The likelihood to recommend the airline to friends and colleagues increases
·       The intention to fly the airline more often increases
·       The total number of airlines flown (i.e., the customer’s consideration set) decreases
·       The airline’s “share-of-wallet” increases.

“A customer’s consideration set for choosing an airline narrows considerably as relationship strength increases,” explained Evert de Boer, director of Loyalty for Asia Pacific at Carlson Marketing. “The focus of the customer on his or her primary airline is sharpened, thereby potentially reducing the migration of business to a competitor.”

As one might expect, the quality of a frequent flyer program strongly impacts customer relationships.  The research identified three factors that influence a program’s quality:

1. how well the attributes of the program (e.g., ease of redeeming for award travel) are executed,

2. how well the program encourages and supports customer engagement activities (e.g., updating a personal profile on the program website), and

3. how well the communications are tailored to be both relevant and customized.
“No one factor alone is responsible for building the stronger customer relationships required to deliver the business results that airlines need today,” noted Luc Bondar, vice president of Loyalty, Carlson Marketing.  “Airlines must not only design and deliver a high-quality frequent flyer program, but must also ensure that the customer communications are relevant and timely; that customer interactions with airline personnel are friendly; and that the brand is seen positively by customers as having fair prices and supporting charitable and environmental causes.  The ultimate success in customer loyalty will be with those airlines that put all the pieces together.”