When Old Becomes New Again

Thought Leadership

Back in 2005, I was flying to a company meeting in Phuket Thailand (yes, I know, crazy lucky). After an overnight in Hong Kong, I was catching a flight to Phuket, which connected through Bangkok. When I landed in Bangkok, a staff member whisked me personally through customs and security, bypassing all lines and personally escorted me to the gate to my flight in minutes. I am not sure why I got singled out – I was not a member of the Royal Thai’s loyalty program. Perhaps my flight was delayed from Hong Kong and they wanted to ensure I made it through to my final destination, but it was magnificent! I was given the gifts of time and convenience, to put it in the terminology of Bond Brand Loyalty’s white paper “The New Currencies Are Coming”.

In 2010, I redeemed my loyalty points for two flight-class flights on Lufthansa to St. Petersburg, Russia. We had a long connection at the Frankfurt lounge and as we were leaving the lounge, we were told that the walk to our gate was too long and we would need to go through another security check point. They simply couldn’t allow first-class passengers to go through that kind of trouble! Instead, we were loaded into a Porsche convertible and driven right up to the plane waiting for us. I felt that the airline did not realize my relative unimportance and I was somehow able to get away with this white glove treatment. From the company’s point of view, it was another example of leveraging an asset to demonstrate a point of differentiation and a similar form of non-point currencies: time, confidence and discretion.

Frequent flyer programs have traditionally used their assets, such as lounge access, priority boarding and check-ins as non-point currencies for ages. In May this year, months after Air Canada’s announcement to part ways, Aeroplan announced changes to the program that included increased flexibility, greater value, improved member experience and personalization. In July, the program went further to explain what each of the sections meant for members:

  • Increased flexibility: any airline, any seat, any time plus conversion partnerships with 20 other airlines
  • Greater value: most popular destinations for Aeroplan redemptions will remain at the same point value as current levels
  • Improved member experience: an online travel booking system where members could earn Aeroplan points on cash bookings of hotels and car rentals
  • Personalization and data usage: in an interview, Aimia’s new CEO, Jeremy Rabe discussed at length that the amount of data that the program has collected on its 5 million members is a great and valuable asset for the organization. This data will be used to recommend flights to member and notify members of great deals. Additionally, using this data would allow the company to purchase flight inventory differently: pre-purchase, bulk purchase or even charter specific flights – and then deliver value and flexibility back to the program members.

Now, we all wait with baited breath for Aimia’s future as it entertains discussions with Porter, Air Canada and Oneworld and whether any of Aeroplan’s program plans would come to fruition. In any case, these are very exciting changes.

As you can see, Aeroplan has been leaning on my favourite non-point currencies: personalization and data usage. In my humble opinion, personalization and relevance are key in the New Currencies of Loyalty world and would have been deserving of mention in Bond’s report. When a program truly understands me and makes me feel like the entire program is designed specifically for me (membership of 1), the points I would earn in the program (though they represent the bulk of the cost to run the program for the company) become secondary. Why would I ever leave the program where the program is custom-fit for me?

My big question is when will we see the same level of non-point/new currency usage in retail loyalty programs as we had seen with airlines? There are a few amazing programs such as PC Optimum that use personalization as one of its main program pillars. Canadian Tire Triangle is also a great differentiated program. Too many other retail programs, unfortunately, do not leverage their unique assets (including customer data) and offer “me-too” programs whereby members earn points for every dollar spent and can then be redeemed for dollars off their future purchases or store gift cards. I am eager to see when the introduction of new currencies and deep relevance revitalize retail loyalty programs to rival what we are about to see in travel.

If you are interested in working together to design a new retail loyalty program that has relevance and personalization at its core, would drive your key metrics and help you differentiate your brand, please contact us at engage@relation1.ca.

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