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Canada: Air Miles announces program changes

How does a company recover from a PR disaster of the magnitude endured by Canadian coalition loyalty program Air Miles last year? Crisis managers might say, “practice targeted generosity.” Air Miles hasn’t done exactly that – no refunding of miles redeemed by angry collectors who thought their miles were due to expire, for example – but the company has made efforts to simplify the program and enhance customer service in ways that may slowly begin to smooth a few ruffled feathers. Will the move mark the beginning of a recovery? Stay tuned.
By Rick Ferguson
The story of Air Miles’ fall from grace is one familiar to Wise Marketer readers – if you’re late to the story, you can catch up here and here and here. The fallout from Air Miles’ atrociously-executed rollout of its mileage expiry policy and its abrupt reversal left the company apologizing to collectors, taking a huge profit writedown, and jumpstarting a now-enacted legslative proposal to prohibit loyalty currency expiration in the province of Ontario. Now Canada’s Global News reports that the company has announced its first program enhancements designed to win back collector trust and loyalty.
New program enhancements include:
  • Beginning April 3, collectors will receive the same merchandise offers when they log on to the program web site, regardless of their program tier. This move comes in response to collector outrage that the company was selectively targeting some collectors with better merchandise offers than others.
  • Gold collectors will enjoy an additional 10 percent redemption discount on merchandise, while Onyx collectors will receive a 20 percent discount.
  • Collectors will also enjoy the ability to pay with a combination of cash and “Dream Miles” in order to redeem for desired merchandise sooner. Air Miles says taht up to 40 percent of merchandise will be accessible through this option.
  • After rampant complaints about poor or unavailable customer service during the expiration debacle, Air Miles will now expand customer service to 24/7 availability.
Money quote from Air Miles president Blair Cameron:
“We are constantly looking for ways to refine and improve our program to ensure our Collectors have the best possible experience. After carefully listening to the feedback from our Collectors, we are rolling out these enhancements to help ensure we remain Canada’s favourite loyalty program. We are firmly committed to delivering more rewards options, improved Collector communications, and expanded customer service.”
Ironically, Air Miles’ simplification of its merchandise redemption process comes despite the solid business reasons behind dynamically-generated redemption catalogs. For example – and, absent comment from the company, we’re merely speculating here – Air Miles might have been segmenting its collector base and driving redemption choices based on collectors’ redemption history in order to improve the value and relevance of its catalog to collectors. It might also have been driving higher-margin redemption choices to certain collectors in order to control reward costs – a less customer-friendly move, of course, but one that may have been valuable to the program’s bottom line.
No matter the reason, the company failed the transparency test with collectors – and was forced to end dynamically-generating its reward catalog once the press began covering collector ire at finding that they had been denied certain merchandise offers available to other collectors.
The moves seem to have already generated some positive PR, as evinced by this money quote from the Global News:
“To see the loyalty program giant concede is a huge win for consumers, said Patrick Sojka, founder of Rewards Canada, which tracks reward programs. ‘Air Miles made a lot of mistakes last year,’ said Sojka. ‘Now they’re trying to dig themselves out of that hole that they dug themselves into.’ The Air Miles reward enhancement follows a recent apology note sent to cardholders in which Air Miles said it ‘did not live up to’ expectations last year.”
Here’s hoping the moves set Air Miles on the path to recovery. Whatever Air Miles’ missteps, the program remains part of the fabric of Canadian life. Companies have survived worse scandals – and we have every confidence that Air Miles will survive this one.
Rick Ferguson is CEO and Editor in Chief of the Wise Marketer Group.
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