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How important are airline loyalty programmes?

Importance of Airline Loyalty Programmes

New survey suggests carriers need to try harder to gain customer loyalty.

September 9, 2013 8:22 by

According to a new survey, most of us are not devoted to airline loyalty programmes and would not hesitate to switch to another.

Deloitte’s inaugural ‘Rising above the clouds: charting a course for renewed airline consumer loyalty’ study reveals that 72 per cent of ‘high-frequency’ business travelers participate in two or more programmes, while more than one-third participate in four or more.

Airline loyalty programmes are not as effective as they could be in driving loyalty among their core audience of frequent travelers, nor are they very significant when selecting an airline to travel with.

Travelers overall – and business travelers specifically – ranked loyalty programmes as only the 19th and 18th most important attribute when selecting an airline (out of 26 attributes), respectively.

However, they remain valuable to high-frequency business travelers, ranking as the second most important attribute.

“Considering airlines use reward programmes to drive brand loyalty exclusively, a remarkable 50 per cent of overall respondents are enrolled in two or more airline loyalty programmes, with one-third of overall respondents participating in two or more programmes,” states the study.

Jonathan Wall, assistant director, hospitality and real estate advisory at Deloitte Middle East, says the survey findings reveal that airlines should “take a hard look” at how they are engaging with their loyalty programme members.

“With increasing competition and heightened consumer pragmatism, airlines may need to focus on personalising the customer experience in a way that makes individual travelers feel special,” he says.

Two-thirds of all respondents would be willing to switch to a competing loyalty programme – despite achieving the highest status level with their current one.

There are characteristics of a loyalty programme that one type of traveler would view as being important, while another may see as less important. For instance, the survey reveals that only 40 per cent of all respondents believe access to airport lounges to be important, whereas 68 per cent of high-frequency business travelers value such access.

Wall says that airlines need to remember that passengers have the potential to serve as ambassadors and are an airline’s most effective marketing tool.

“Airlines should consider providing customised experiences for individual travelers and encourage loyalty with unexpected and in-the-moment, accessible rewards, to help them not only redefine and reshape the customer experience, but also ultimately build lasting relationships with their customers,” he adds.

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