Contributing editor Bill Hanifin has a personal take on the recent public relations struggles of AIR MILES Canada regarding its mileage expiration and reward redemption options. Bill's take: AIR MILES should act swiftly and decisively to ease member concerns and restore the luster to the venerable coalition loyalty brand.
Watching one of your heroes fall is painful. It rarely happens in the movies, as the protagonist or “person noted for courageous acts or nobility of character" may flirt with disaster but always seems to end up a winner.
Real life hero-worship is a more tricky trade, with no guarantees of happy resolution at the end of the story. Ask any business that has pinned its brand advertising campaign to an individual sports, entertainment, or business figure only to have a scandal ensue. Lance Armstrong, and more recently Maria Sharapova, are two examples of seemingly untouchable sports figures that fell prey to doping charges, with sponsors quickly distancing themselves and cancelling endorsement deals. There are many other examples, from Charlie Sheen to Ray Rice.
We have heroes in business too, and the AIR MILES programme in Canada falls into my "hero" category in loyalty marketing. It earned this position with me as it is the first and oldest coalition programme operated in North America. It is also owned by a former employer, for whom I have great respect.
AIR MILES is in the midst of a highly public controversy over the handling of expiring miles earned by its Collectors (Members in Canadian parlance). In December 2011, AIR MILES announced that it was placing a 5-year expiration on certain classes of AIR MILES. No one paid much attention to the announcement at the time, but as 2016 rolls into its second half and the expiration date looms, stories of Collectors having difficulty cashing in miles for their "dream" rewards are threatening to tarnish the public image of AIR MILES for the next generation of Collectors.
Responding to public outcry, Rewards Canada, the leading rewards publication in the country, published a list of "keys to finding more AirMiles redemption options." Rewards Canada has also published an all-inclusive guide to managing expiring miles along with a poignant video and a list of published articles about the growing controversy.
The most specific current issues generating consumer dissatisfaction are highlighted in an article published online by CBC News in late July. The principal source of frustration is the way AIR MILES is alleged to be filtering its rewards catalog, showing different rewards to Collectors based on their mileage balance.
The article reports that the often-used tactic of filtering available rewards by membership tier or mileage balance is being used by AIR MILES to tempt Collectors with rewards that they cannot reach. It is a strange situation and I recommend that you carefully read the article and the information on the Rewards Canada site to draw your own conclusions.
One of the fundamental rules of sound loyalty programme design has always been to communicate clearly and often with membership about programme rule changes. This is the key error that AIR MILES has made in this situation. While there was an announcement in December 2011 about the change in expiration policy, little has been communicated in the 12 months leading up to the expiration date in 2016.
Looking at the AIR MILES website, it seems that the coalition programme has adopted an aloof approach to member communications on expiring miles. The answer to the FAQ "Will you be letting me know in advance of when my Miles expire?" suggests that self-service is the only way to stay abreast of changes. The response reads:
"As promised when we announced our expiry policy in 2011, Collectors have the ability to find out information about Miles that might expire through our website. At any time, and as often as you wish, you can request information on Miles that might expire within the next 12 months.
To request an expiry statement, click here."
This story of loyalty hero worship is not over, and AIR MILES can salvage the day if it acts quickly. I worry that AIR MILES is waiting too long to make its move as it has stayed uncomfortably silent in the media despite growing criticism.
Their lack of response in public forum violates another foundational concept, this one in public relations regarding crisis management. Brands are normally advised to tackle a problem head-on, acknowledge criticism and suggest solutions. Absent this proactive approach, consumers, Collectors, and media will continue to skewer the brand in every social and traditional media channel available.
In the movies, it is the anticipation of watching a hero tempt disaster that causes hand-wringing and seat-shifting. The dictionary definition of a hero states the main character "faces danger, combats adversity, and through impressive feats of ingenuity, bravery or strength, sacrifices his or her own personal concerns for some greater good." It’s time for AIR MILES to act quickly and exert influence over the outcome of this story.
Bill Hanifin is Wise Marketer's North American editor and publisher of Loyalty Truth.