Airlines Loyalty Programs as a tool to collect Customers’ Data and support Long Term Relationships

To provide qualitative service and maintain the relationships with customers, it is important for airlines to collect customers data, and keep it current, complete, correct and unique. The data is used to identify customers and find out their needs to be able to provide valuable offers at the right period of time. The database that contains customers data can be expanded differently by using the internal and external sources (Peelen and Beltman, 2013).

One of the internal ways for the airline industry is collecting data by providing airline frequent flyer programs which are used not only to reward the customer, but also to keep the communicating history and use it. A loyalty program is an agreement between a business and its customers which was created to encourage customers to be more loyal to the certain airline as well as to make them feel more valued. The scheme of enrollment is quite easy: new members register to the program, mostly free of charge, and get points or miles every time they fly or use the services of associated partners. As soon as they achieve a specified number of miles, they can exchange them for a reward. Rewards can vary from free air travel, upgrades of service (for example, to obtain business class for a lower price), and also in some cases for free nights at hotels, car rentals or even for a range of leisure activities (Global Flight, 2016). As stated in a recent article of Wever (2016), the loyalty programs are highly important in order to survive in a highly competitive market such as airlines industries. The airlines always need to think about more attractive programs to win the long-term relationships with their customers.

It is important to mention that the loyalty programs are just an additional benefit, but not the main factor that helps to keep long-term relationships with the customers. If the basic things such as price and timing are not competitive, then those kinds of programs won’t be profitable at all. Customers will look for the alternatives based on the basic services, but not on the loyalty programs (Hossain M., Kibria H., & Farhana S., 2017). However, if all other basic things being equal, the better loyalty program is more beneficial.

The programs of collecting miles are very convenient for the customers who fly frequently for business trips or just for long distances. Remaining loyal to one company or alliance is profitable not only for the company but for the customers as well. Most of the airline loyalty programs include a huge number of partners such as hotels, associated airlines, credit cards, phone companies and others so it is possible to collect points not only from the purchasing flight tickets but almost in any place (Global Flight, 2016). A personal example is my family. They always use this opportunity to get free flights by using the credit cards that are registered for one of the airline loyalty programs – Skyteam. That is an example of long term relationships – the main goal of the air companies.

 

Sources:

Global Flight. (2016) Retrieved September 17, 2017 from http://www.globalflight.net/frequent-flyerloyalty-programs/overview/

Hossain M., Kibria H., & Farhana S. (2017) Do Customer Loyalty Programs Really Work in Airlines Business?—A Study on Air Berlin. Retrieved September 24, 2017 from http://www.scirp.org/journal/PaperInformation.aspx?paperID=77901

Peelen, E., Beltman R. (2013). Customer Relationship Management, p.117-132

Wever M. (2016) The Importance of Customer Loyalty Programs for the European Airline Industry

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2 thoughts on “Airlines Loyalty Programs as a tool to collect Customers’ Data and support Long Term Relationships

    1. annaloginova1

      Thanks for the comment!
      Actually, the loyalty programs don’t really have a big influence on customers. If the basic things such as price and timing are not competitive, then those kinds of programs won’t be profitable at all, and the customers will look for the alternatives based on the basic services but not on the loyalty programs. These programs are just an additional benefit but not the main factor that helps to keep long term relationships.
      I found the research made by Hossain M., Kibria H., and Farhana S. about that (http://www.scirp.org/journal/PaperInformation.aspx?paperID=77901).

      Like

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