In the second of our posts on coalition loyalty programmes, we look at the top four benefits of running a coalition scheme specifically for travel brands.
1. Benefit from broader spending
Most people are not frequent fliers or travellers. Some may travel for business as well as pleasure, but for most of us air travel isn’t something we do very often. We’re much more likely to do grocery shopping, fill our cars with petrol and buy things online.
Jeff Berry (Senior Research Director, LoyaltyOne and COLLOQUY) pinpointed the issue in 2014 when he wrote about why Air Baltic switched to PINS loyalty currency – infrequent flyers hardly see any reward for being loyal customers to airlines.
If most of us are infrequent flyers, which means many airline loyalty schemes aren’t rewarding the majority of their customers. They’re rewarding those who have the money and lifestyle that lets them fly often, and either alienating or ignoring the rest.
Businesses benefit from broadening their focus too. By allying with businesses from different sectors, airlines and other businesses in the travel sector can benefit from customers having more loyalty points to spend on big-ticket items (like the family holiday or a ticket to the other side of the world) because they collect more points over the year than they would by simply booking an annual holiday (the average Brit went on 1.4 holidays in 2016 and only 15% of these were overseas).
Comarch’s own research found that 86% of UK consumers felt that the possibility to collect points was an important part of a loyalty scheme. People want more ways to earn their rewards, and coalition loyalty schemes give them this.
2. Give customers the flexibility they crave
People want to have control over their rewards and restricting them to a limited rewards shop often isn’t enough to get, or keep, people interested.
Comarch’s research found that 87% of UK consumers saw the quality and quantity of the reward shop as important to the success of a loyalty programme. 2014 research by American Express found that 72% of Americans said that they’d prefer a reward programme that allowed them to shop and redeem at multiple stores.
A 2014 study by Colloquy found that although US loyalty programmes were increasing, only 9.5% of members were active. Coalition programmes give customers more choice.
People are eager to join and participate because they know they’ll get good use out of the programme, and that they can aim for rewards that are easy to earn, like a free coffee from Starbucks, or save their points up for money off a holiday.
3. Increased brand exposure
All brands participating in coalition loyalty schemes benefit from increased exposure – thanks to cross-promotional marketing – and an increase in their base of loyal customers.
Unless they have a strong affiliation to a particular non-participating brand, people are more likely to choose to shop at a retailer, or fly with an airline, that they can earn rewards with. They’re going to spend the money anyway, why not earn something back for it?
4. Benefit from a mobile friendly programme
Mobile should be a key feature of any modern loyalty programme, including coalition schemes. The ability to provide personalised content and offers, combined with being able to reach people wherever they are, is too good an opportunity to miss out on.
Forrester research found that while brands tended to view mobile wallets as transactional systems, what consumers really want is mobile optimized loyalty programmes. They want apps (like Thanks Again) that let them keep track of their progress, and ways to claim perks and rewards while on the move.
Coalition loyalty schemes not only give consumers more choice, they provide significant benefits for businesses too. The travel industry can gain particular benefit from these schemes as a result of the increased exposure and the chance for greater consumer participation.
Business Development Manager