Measuring Loyalty: Tracking Passengers Who Fly With Competing Airlines
What would your frequent flyer program do if the most valuable frequent flyer started flying with a direct competitor?
Would the program know?
What loyalty tracking mechanism provides you with the answer?
What if it was only 1 or 2 flights the top frequent flyer had taken with the competitor?
Is the Loyalty Management System capable of measuring loyalty risk at a granular level?
Aside from unique data intelligence, what benefit is there to the program of measuring competitor insights?
Would you send gifts to top members if there were a risk of them spending with a competitor? Re-segment them for CRM purposes? Assign a dedicated taskforce team to fly with top elites on every flight?
Chances are if your frequent flyer loyalty program does not have a data intelligence framework in place – you’re losing revenue without even knowing it.
Welcome to the world of frequent flyer warfare, where data intelligence plays a key role in swinging share of wallet from elite members away from one airline, and towards another. All accomplished in under the radar and virtually untrackable using existing loyalty measurement tools.
To build context, firstly, let’s consider how most frequent flyer programs traditionally measure and track loyalty across the airline:
- Number of elite members
- Number of elite members % vs total pax
- Number of miles/points issued vs ASK/ASM
- Miles/Points sold to third parties
- Air and Non-Air redemptions
- Customer current value
- Customer lifetime value
The current set-up is akin to a cockpit where the pilot in command (the loyalty team) looks at all the metrics on measuring a healthy program and takes into account their professional experience to make an informed call on whether or not the program is moving in the right direction.
Fact is, under the traditional model – there is no one single metric which demonstrates the program is financially and non-financially a success. It takes a balanced scorecard approach to take in key metrics from across the business units, synthesize them in one central dashboard, and only then can you visualize the impact loyalty is having on the overall airline business.
There is, however, a single, key metric, that cuts through the noise and delivers a brutally honest position of both airline loyalty (ticket sales), and sale of miles to financial partners.