Frequent flyers vote for greater value for miles

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By: Wise Marketer Staff |

Posted on December 27, 2006

Frequent flyers vote for greater value for miles

Loylogic, the company behind Etihad's 'Miles+Cash' frequent flyer programme redemption option, is now actively promoting the Loypay reward payment mechanism to help frequent flyer programmes make their miles more valuable to programme members.

While it is true that most frequent flyer programmes offer the ability to buy 'top up' miles in order to redeem for rewards that have a miles requirement higher than the member can afford, those extra miles often cost the member more than they would if they were earned in the normal way.

Loylogic's technology is based on a complex algorithm that can effectively boost the value of a single airline mile up to US$100 (or more, if the programme operator permits).

Survey underway In an effort to reconfirm the company's original findings on the miles-and-cash redemption option's popularity with frequent flyers, Loylogic has now launched a short-term online survey on its web site, and is inviting any frequent flyer programme member to vote on the concept.

Although the survey is not yet complete, early results are encouraging: on average, every 28 seconds a frequent flyer votes in favour of the idea (as Loylogic says, "a vote for getting more value for their miles"). The survey will end on the last day of February 2007 (click here to vote).

Instant gratification wanted Consumers increasingly want what they want, and they want it now. The Loypay system offers consumes the option to redeem for FFP awards that they can't yet afford (in pure miles) by adding cash to the redemption price.

The idea is not new: Many redemption catalogues already offer the ability to throw in cash instead of the missing points, but they do so at a fixed ratio (e.g. 10 points per US$1 contributed toward the redemption price). Loylogic's mechanism is different, though: The cash-equivalent value of the points redeemed changes on a sliding scale (governed by the Loypay miles-and-cash algorithm) which can be adjusted by the loyalty programme's operator. As a result, some combinations of miles and cash will result in the miles actually being redeemed having a greater cash-equivalent value to the consumer.

Point costs stay fixed Interestingly, the point cost for the programme operator (the "sponsor", in Loylogic's parlance) remains unchanged. According to Loylogic CEO, Dominic Hofer, the system actually helps airlines to make extra revenue on award flight bookings. (Because programme members not only redeem miles but also spend cash, the airline earns hard cash for award flight bookings and, as members maximize the value of their miles, they increase the cash portion accordingly.)

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