How to drive passenger loyalty
For most airlines, passengers are still more statistics than humans.
Knowledge about who the people traveling are and insights about their habits, likes, and dislikes are often missing. The establishment of a well-designed loyalty program is key to collect relevant customer data for an individualized customer approach.
Nearly all airlines have their own loyalty program. But what is it that drives loyalty? What do today’s travellers expect? How has it changed over the past 10 years? What is the more important, status privileges or bonus miles? And how can loyalty of a “once in while” passenger be won and kept? Daily use and relevance of communication are key to keeping customers stay loyal.
What does loyalty mean? A passenger does not have to fly frequently to be a loyal customer.
Loyalty means, that if a customer wants to fly, he always chooses the same airline, even if it is only for his once a year holiday. Especially in Europe airports are highly competitive due to many overlapping catchments. Within two hours, more than 60% of all Europeans can reach two or more airports. And a recent survey of Statista proves, that 67% of Germans flying are using two or more different airports located close to their place of residence. This shows that loyalty is a very important success factor for airports.
Loyalty to an airport will only be build up if the core processes work smooth and the passenger has a stress-free airport experience.
Before investing in loyalty, airports need to work on their core experience. Parking options or connections to public transport, a convenient baggage drop-off and security check, as well as well-organized passport control, easy orientation and fast announcements in case of irregularities are parts of the core product, that need to work error-free.
They are all part of the overall airport experience, which also includes the shopping and dining structure and target group-oriented offers, such as playgrounds for children or working spaces for business travelers. So, every airport should do its homework first before thinking about building up a loyalty program.
Loyalty programs are the key to an individualized customer approach.
As airlines already know who their customers are through their bookings, airports only know how many people are passing through their gates and when and where they will be traveling. But airports often don´t really know these people or anything about their preferences, habits, likes, and dislikes.
Most people are open to having a two-way relationship with the airport, as more than 60% of the passengers are trying to get in contact with the airport prior to their flights, through the airport’s website or -if available- the airport’s mobile app. Most of them are looking for information about parking opportunities, or details on their flight departures. But this active approach by the customers is a great opportunity for airports to develop interaction with their customers, to collect their data and use it intelligently to drive loyalty.
In a first step, airports need to deliver their customer’s good reasons to share their personal data with them.
Added values as purchase vouchers, reserved parking spaces close to the passenger’s departure gate, exclusive VIP services such as chauffeur service, real-time information about the length of the queue at the security control or even only up to date traffic information for the passenger’s way to the airport might be ideas for added values that drive customers engagement with the airport. But not only added values for the customer, also the general set up of the loyalty program is an important success factor.
Many passengers are already a member of one or more airlines loyalty programs, which in some cases cooperate with airport retailers, as the partnership between Lufthansa’s Miles & More and the airport retailer Gebrüder Heinemann shows. On the other side, Fraport and Gebrüder Heinemann recently established a joint venture to refine Fraport’s digital strategy by relaunching the airport app to allow in-app shopping in cooperation with the stationary airport shops.
Wouldn’t a joint offer of airports, airlines, and retailers deliver the best overall customer experience and drive loyalty the most?
It seems that convenience for the passenger is not in focus, as airlines, airports, and retailers are all developing their own loyalty programs respectively partnering with only one of the two other parties.
Surely, it will not be easy to build up a joint loyalty program as the interests of the three parties are not always aligned and the costs and advantages of the loyalty program must be equally shared between the partners. But not only a joint program of all partners at one airport might be a future scenario. The cooperation between various smaller airports might be an additional option, especially smaller airports might profit from.
UNEX is a loyalty expert
UNEX has profound experience in business model optimization. Our key focus is on customer experience and changes in market conditions.
If you are planning to establish a loyalty program, UNEX will support you with strategic questions:
- What are the goals that should be reached with the loyalty program?
- Is it better to establish an own loyalty program or does it have more benefits joining a multi-partner program?
- What would be the added value of an own loyalty program?
- How should a loyalty program be set up to reach the defined goals?
If you already have an existing loyalty program, UNEX will support you with an innovation process:
- We analyze the current state of your loyalty Especially multi-channel provider need to update their loyalty programs regularly. The analysis will uncover optimization potential.
- In an innovation process alternatives to the current setup are identified and evaluated. High daily use, the increase of active member rate and intelligent use of the colleted data are possible starting points.
- Business and implementation plans are developed for the most promising options.
UNEX has the know-how to raise the full potential of your loyalty strategy in order to generate long-term value and enhance your competitiveness.