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How Airlines Are Maturing From Sky Miles to Sky Malls

After flying some 1,100 miles from Tampa, Florida to Elizabeth, New Jersey to attend the Airline Information FFP Spring event and 22nd annual Freddie Awards on April 26, 2012 showcasing the best airline and hotel loyalty programs, and spending most of that time within view of Newark airport – writing about the state of airline loyalty programs seemed very appropriate.

American Airlines’ besting of Air Canada’s two-year reign for loyalty “Program of the Year” at the awards is also worth mentioning. It may be the oldest loyalty program flying the world’s airways, but the AAdvantage frequent-flier program still has “got it” where it counts. Fliers earn miles through credit card purchases, interaction with charities, use of financial services, the buying of miles outright, and other outlets. The program works because of its simplicity: fliers seek cost effective ways to reach their destinations. They don’t want endless circling and delays. They get enough of that on the tarmac or on final approach.

Praising simplicity also got me thinking a bit about history. What ever happened to the golden age of air travel where “just getting there” wasn’t the be all and end all? What happened to customer service and a focus on the customer experience? What happened to the magic of the journey and not just the reward of a discounted destination?

While I was at the Freddie Awards I had time to chat with Roger Williams, airline loyalty program consultant and founder of LoadFactor.  During the interview, which you can watch here, we talked about how airlines are trying to recapture that genuine customer relationship – not by turning back the clock, but forward-looking at the potential modern loyalty programs have to offer.

On balance, I think airlines have matured considerably in their relationship to fliers and are doing an excellent job at modeling their loyalty approaches off retailing. In retailing you’ll hear marketers talk more and more about “omnichannel” or the manner in which marketing channels, be it mobile, social, TV, print, kiosk, etc. are merging. Here at Kobie Marketing, we are adding to that conversation by addressing “omnichannel loyalty” too which tackles the need to not only sell to customers across all touch points simultaneously, but offer relevant, timely and individualized engagement programs throughout.

Airlines could learn a lot from that approach. While they’re making progress outside the cabin, genuine in-cabin loyalty and retailing still has a bit further to go. There’s no question that creative ancillary revenue schemes, both fee and service based, have gone a long way toward helping airlines tailor unique travel experiences for each of their diverse passengers. But ancillary overdrive can leave travelers feeling like they’ve been nickel and dimed. That’s not good either.

That’s why we have events like the Freddie Awards after all. It’ll be interesting to see what American Airlines or another challenger will creatively come up with next. Simplicity is great. But simplicity offered through an omnichannel experience is ideal.

Have the words omnichannel loyalty sparked your interest? You should check out the interview with Roger Williams on LoadFactor to hear more. American Airlines’ FFP may have reaped the rewards this year, but mark my words, the necessity of building the omnichannel consumer experience might topple AA’s newly minted awards next year if they don’t adapt to the loyalty changes taking place.


Author: Bram Hechtkopf

Bram leads the “marketing of Kobie Marketing.” He consults with current and prospective clients on new business opportunities, helping to develop customer retention and loyalty marketing strategies and solutions that drive increased retention and spend. Following in the footsteps of his father, Kobie’s founder, Bram is eager to continue Kobie’s vision of technology and data analytics as enablers of leading-edge marketing executions for world-class customer loyalty initiatives. Bram has consulted with a wide array of leading brands including AMC Entertainment, TGI Friday’s, BJ’s Restaurants, Verizon, Bank of America, RBC, Flagstar Bank, JPMC, Sagicor, Coca-Cola, Cox Enterprises, Ruby Tuesday, Hawaiian Airlines, and Royal Caribbean Cruise Lines. Prior to Kobie, Bram worked with the Human Capital Transaction Advisory Services practice for Ernst & Young, LLP, where he developed and presented analyses and recommendations on executive incentive and equity plan design and due diligence findings to senior management and the Board of Directors of Fortune 1000 clients. Prior to Ernst & Young, Bram worked with Towers Perrin in Manhattan as a consultant specializing in incentive plan design for executives and sales forces. Bram received his Bachelor of Business Administration degree with honors from the Goizueta Business School at Emory University with a concentration in Marketing and Information Technology.

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