“While non-airline loyalty programmes continue to struggle on how to deliver real value to their stakeholders, airline programmes are more relevant and profitable than ever before in history.”
– Mark Ross-Smith, Head of Loyalty & Enrich, Malaysia Airlines –
Following the successful Aviation Festival Asia 2018, we’re launching an eBook featuring some of the industry’s most forward-thinking digital innovators to talk about their digital innovation journey and where they think we are headed. Download our ebook here for full interviews. Below is an excerpt of our chat with Mark.
What exactly is happening with airline loyalty programmes? Is it an outdated business model in a world of real-time choices?
Mark: Airlines and their shareholders are beginning to understand that the loyalty programme of an airline can be worth more than the airline itself. So, while non-airline loyalty programmes continue to struggle on how to deliver real value to their stakeholders, airline programmes are more relevant and profitable than ever before in history.
At the end of the day, passengers have a choice of which airline they fly, which credit card they use, which hotel they stay at, and all the purchase power stays with customers. Rightly so too. Our role as a loyalty programme is to align our brand, partners and experience alongside their spending journey to help make each of these touch-points rewarding in a meaningful way for that person. According to some banking statistics, the average Malaysian with a credit card spends RM 2,000 per month.When using the right credit card, this standard of spending amounts to enough Enrich Miles for a free flight every year. Typically, cashback cards or other discount programmes would provide much less value than a free international flight, and thus, airline programmes remain the most powerful types of loyalty programmes in the market.
What do you think of the notion that customer loyalty is dead and it’s all about price?
Mark: Today, there are more consumers in the world with money than ever before in history. Traditional marketing isn’t so effective anymore, and airlines are continually striving to differentiate themselves from the competition. One of the most effective and successful achievements airlines around the world have implemented over the past 20 years are highly scalable, profitable loyalty programmes. These frequent flyer loyalty programmes are specially engineered to deliver revenue back to the airline through increased seat sales, partner and brand revenue. So, while more and more airlines are battling in traditional land of price-wars, it’s the airlines with ever-growing and sophisticated loyalty programmes that can incrementally move the needle on customer spend to drive increased loyalty, increased spend and ultimately deliver more value to the airline, partners and passengers.
What do customers of today really want?
Mark:We know that Enrich members want to feel valued, cared for and recognised for their loyalty. The days of “let’s add more lounges” or “customers want more upgrades” are long gone. Sure, customers value these benefits, however, it’s not what fundamentally makes a customer choose Airline A versus Airline B. Understanding what each individual customer is seeking, or what will help change spending behaviour so they choose MAS over another alternative is key to what we are aiming to achieve through the Enrich loyalty programme. So, what do customers really want? It depends on the customer, how they are feeling, where they’ve been, where they’re going, who they’re travelling with, what they spent on the ticket etc. This is why we see so many airlines investing in personalisation.
As our world gets increasingly digital, what constitutes a successful loyalty programme?
Mark: It matters less about what medium the loyalty programme experience is delivered, and more about…
Join us at Aviation Festival Asia 2019
Now entering its 15th year, Aviation Festival Asia 2019 (27 – 28 February, Singapore) is Asia’s largest airline leadership conference, gathering leaders from FSCs, LCCs and airports with a size of 150+ speakers, 1000+ delegates and total 2,000+ attendees. Want to join us? For sponsorship & exhibition enquiries, contact firstname.lastname@example.org or to explore speaking opportunities at the event, contact email@example.com.