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It’s Time To Ban Airline Loyalty Programs

Jeremy Webber of Ziba thinks it’s time to ditch those convoluted rewards programs and get back to what truly matters: service.

It’s Time To Ban Airline Loyalty Programs
[Image via Shutterstock]

Airlines pioneered the idea of loyalty programs in the early 1980s and variations on the theme have sprung up like mushrooms ever since. So many businesses are plying consumers with rewards, in fact, that gaming these systems has become a little industry unto itself.

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I remember when I first started traveling for work and dreamed of reaching “Moon Rock Status”–of skipping the boarding line, upgrading every flight, getting free drinks. There would be smiling flight attendants who knew my name and who would protect the generously scaled front bathroom from the rabble in the back of the plane.

The truth is, airline loyalty programs have become a nightmare, and many can even drag down the overall experience of flying (just check out Tina Fey’s take on boarding calls from Saturday Night Live.) The increasing complexity of these programs has eroded what airlines should be focused on: earning my loyalty by doing a great job of getting me from Sea-Tac to O’Hare. Oh, and also rewarding me when I really deserve it.

Image: American Airlines Junior Stewardess Pin via Ebay

Travel time is interstitial time. Business travel, in particular, is always a means to an end–neither home or where you need to be–but that doesn’t mean it has to suck. Designers can help. Service design, in particular, has things to teach airlines about how to get back to truly rewarding their most loyal customers, and even inspiring genuine new loyalty.

How It All Began: Rewards that Mattered

Intentions were good when American Airlines touched off the rewards avalanche in 1981. The AAdvantage program began with a simple, effective premise: reward loyal customers with a better experience. Streamlining the travel experience for a handful of already-devoted customers cost AA next to nothing, and actually let them double down on the stellar service experience they were already known for. It was a “benefit lead” loyalty program that provided real, tangible value to the customers who chose to do business with AA most often.

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That was then, and this in now: eight rounds of boarding calls, striated across different-colored carpets, all ending in a carry-on free-for-all. That’s the tail wagging the dog. The mechanics of loyalty programs have become overgrown to the point of interfering with what’s really best for airlines’ brands.

People Are Loyal to Brands, not Loyalty Programs.

Most loyalty programs do not produce loyal customers. The average American household belongs to more than 20 loyalty programs. Nowadays, byzantine rewards schemes are distanced from the flying experience and may even incentivize users to jump ship to whichever airline happens to be giving away the most free stuff at the moment they’re ready to buy. Is that the kind of loyalty your business is after?

At the airport, altogether too much attention is being paid to the boarding process, which really boils down to a straightforward systems-management problem. With a service design hat on, the solution might not be about making boarding more efficient, but in simply making it better. That could mean slower, but maybe more fun! Disney theme parks remain at the cutting edge on the fun-in-line front by working continuously to solve unsexy problems and acknowledging how people deal psychologically with peak experiences: if the flight is awesome in every way, you’ll forget all about how convoluted the boarding experience was.

Loyalty Programs Are a Business Risk

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Loyalty is part of what it means to be human–everyone likes the idea–but loyalty only accrues to brands that offer products or experiences worth committing to. People are happy to invest emotionally in their favorite sneakers, the person “crafting” their latte every morning, a badass pickup truck, or even an airline, so long as the brand is doing right by them. You might be as sick as I am listening to testimonies of undying devotion to Virgin, but businesses who don’t understand what actually makes people feel strongly about their product are missing out.

Image via Shutterstock

Many loyalty programs are now doing more harm than good: Businesses shouldn’t aim to exceed anyone’s expectations until at least consistently meeting them. Yet fostering committed customers may take less effort and expense than one might currently believe. The payoffs don’t have to be huge–they just have to be relevant and timed right. Completely unexpected but well-deserved perks have the potential to pay off in spades. What about a lottery-style upgrade, which rewards one loyalty program member per flight with a first-class seat immediately before boarding? Even something that simple could make us look forward to going to the airport again. Chasing your customers’ loyalty is worth investment and effort, but only if the rewards have meaning within the context of a functioning, healthy transaction, just as in any relationship.

Remember the Bottom Line

Loyalty goes to brands that offer products or experiences that are worth it. If you truly want to inspire devoted customers, here’s a radical idea: why not ditch the “Loyalty Program” and spend all that energy and cash on directly rewarding your best customers?

Upstart independent programs like Belly and Pirq are allowing smaller businesses who excel at service already to do just that. For airlines, focus on designing ways to blow the minds of the one-flight-a-year-family that chooses AA every time, instead of sprinkling mediocre, watered-down rewards on every fickle traveler.

Consider how low-investment, big-payoff incentives could be added into air travel at every stage of the experience: pre-flight, in the air, and post-flight. Offer to bump someone from an overbooked flight to a later one with a $200 travel bribe/voucher BEFORE they get to the airport. Email the flier a 10,000 mile bonus voucher as a reward for keeping cool next to that jittery toddler for six hours, before he or she has even debarked. And keep airline rewards airline-related! Who decided frequent flyer miles should be redeemable for a discount on Microsoft Office, anyway? How about letting us use those points to buy a few extra inches of seat width on the next flight, which is what Seymourpowell’s Morph seating would allow for?

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Another often overlooked yet amazing thing about loyalty is that it comes hand-in-hand with forgiveness, and so ends up functioning like a special kind of insurance policy for businesses. If (and when) you screw up, from time to time, some residual loyalty will only help your chances of making amends. It’s also really hard to let someone down if they weren’t expecting anything. Airline rewards programs today are genuinely messing with the experience of travel and it’s only a matter of time before the whole thing gets thrown overboard.

About the author

Formerly an architect and designer in Ziba’s Environment Group, Jeremy is a Senior Consumer Insights Analyst. Through field research and trends analysis, he develops actionable insights and identifies new opportunities for clients like Nike, FedEx and REI.

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