To much industry fanfare and media attention, JD Power recently released their ranking of the best airline loyalty programs. Top of the list: JetBlue. Couldn’t agree more with their findings – the folks at JetBlue seem to go above and beyond to make traveler experiences positive. And if you’ve flown with them recently you already know that.
But one of the more interesting items among JD Power’s report was a little nugget buried within some of the secondary findings:
“Roughly half of airline loyalty program members do not know how to either earn points/miles or redeem the points/miles they managed to earn.”
We’ve seen data on this topic before but to my recollection, I can’t remember seeing anything that approximated half of enrollees. Further, their data indicates roughly the same lack of understanding for both earn & burn activities.
So that got us thinking. And talking. What follows is a discussion between The Wise Marketer’s CEO, Bill Hanifin, and The Wise Marketer’s COO, Aaron Dauphinee on that topic. Bill has been a consultant and practitioner in the loyalty space for multiple decades and Aaron was actually part of the team at Aimia running airline loyalty. Their discussion has been edited for brevity.
Editor: I'm sure this a "known" fact but I've never seen it as such a high number. Is this something that The Wise Marketer should address or is it akin to peeking behind Oz's curtain?
It begs all kinds of questions related to program mechanics, communication and intent.
Bill Hanifin: The comment speaks to why Randy Peterson has become a success with Flyer Talk etc. I don't think the problem is a bad as it sounds in the article, but the programs (might) have become too complex. My thought would be "when your program has become so complex that cottage industries sprout to help consumers understand how to maximize benefits, is it time to simplify?"
Maximize might be the keyword here. I can't be bothered to inconvenience myself spending time and money, making year-end mileage runs, but I sometimes think I'm in the minority. Lots of people like to play the game - hard - and you could say that equates to engagement.
Aaron Dauphinee: I'm not convinced the problem is with the loyalty programs but rather (with the airlines themselves) as they continue their quest to become profitable. Airlines have stripped out virtually everything that was once bundled within your flight experience (i.e. checked luggage, snack/food, alcoholic beverages, etc) and are down to providing just the bare minimum ... "here's your seat, sir." Or they offer a multitude of fares, each with different elements but not others, and it's become incredibly confusing for guests to understand what is included in their fare and what is not. The only guests not confused are those that either: a) fly all the time, b) are flying for business and it's booked by the company, or c) are willing to invest time and effort to "play the game."
I think the number has validity because the sample is from all program members, which will be made up of a cross-section of different types of flyers. Most people tend to join a frequent flyer program even if they are taking only one or two flights every couple of years. This is because many people aspire to travel more, it makes them feel good to be out of the routine of their day-to-day lives, so their mindset is "We're traveling now. We will again soon. How exciting. Let's sign up."
I suspect a good portion of the 50% who don’t understand how to earn points or redeem points are fairly low-frequency and that the travel sector has changed the flight experience considerably since they last flew. The airlines also haven't clearly explained what's changed (and why) in order to reset expectations. They have shifted everything that was once table-stakes for the flight experience into perks/benefits that members can access with their points.
Bill Hanifin: From my personal view on the cabin experience these days, the unbundling of what was once included in a ticket has led to the destruction of the in-flight experience. Buying a seat, then having to "pay again" for a better seat, one that resembles what we used to get when we bought a ticket, is another way that airlines have taken benefits off the table.
Also, to your first point about the struggle for profitability, the airlines are the best in the world at optimizing loads and yield management. In becoming so efficient, they are making the most dollars from each flight, but at a clear expense to the passenger.
The airline Frequent Flyer Passenger is operating on the basis of "I'll take what I can get in exchange for the painful days on the road". I still travel with some frequency but am almost never eligible for an upgrade or even able to obtain a freebie "premium economy". As long as clients are willing to pay for these little sanity-savers, I'll enjoy that "benefit", but it doesn't come from the airlines.
Aaron Dauphinee: Sounds like we’re similar mindset on this, root cause is airline operations and profit decisions.
Good contrast between the common/low-fly experience vs a slightly higher frequency traveler. (The trajectory) quickly moves from a frustration that comes from the unknown to a frustration because it is known. Very daunting view of the current state of airline flight experience.
Editor’s note: Bill composed his portion of this exchange while on a recent flight. Apparently he had enough elbow room that he could use his laptop.
Editor’s request: We know that a large portion of our readers are loyalty professionals and we know, anecdotally at least, that many of you are frequent business travelers. We would love to hear your take on the above. Do you agree with the data in the JD Power report? Are there really 50% of frequent flyer program members who genuinely don’t understand how to earn and/or redeem? What would be the root causes of that disparity? And, more importantly, how does the problem get fixed?