Using Loyalty Game Mechanics to Increase Revenue Per Seat
Getting to the advanced state of leveraging from loyalty game mechanics requires data collection, loyalty tracking, and booking integration.
Frequent Flyer Tracking Metrics
Do your frequent flyers go out of their way to spend more with the airline?
How is incremental spend by top-tier frequent flyers attributed to the loyalty program?
For frequent flyer program owners – exhibiting the value that the program delivers back to the airline can be a challenge.
You might recall that in a previous article, we discussed the importance of measuring the share of wallet spend by loyalty members.
The second Golden Metric in airline loyalty is tracking airline ticket sales behaviour spend by active frequent flyers.
What does that mean? Well, simply put – it’s the difference between what the frequent flyer paid for the ticket, versus the cheapest option in that cabin that could have been booked at the time of purchase.
In the loyalty business, knowing why members took particular actions and transacted in specific ways is the key to unlocking new value.
When members purchase an airline ticket that is more expensive than other options that are presented to them at the time of purchase, it’s essential to know why the member made this decision.
Does the member need extra baggage allowance? Seat selection? Is the member attracted to the numbers in the price?
Generally, the non-loyalty differences between fare families are immaterial for frequent flyers. Top frequent flyers already have additional baggage allowances, seat selection, lounge access, and priority access to everything. The only remaining differences between fare families are then the price, and the mileage earn.
When tracking the ongoing transactional behaviour on both an individual member level, and as an aggregate of the total frequent flyer member base; a well designed frequent flyer program should be producing $10+ in ticket sales for every $1 the member generates in non-air revenue.
Elite Frequent Flyers Spend More
Elite members spend more on airline tickets than they need to pay. How much more members are paying depends on the loyalty program dynamics.