Rewards are the new loyalty
16 Nov 2018 - by Chana Boucher
The first frequent flyer programmes were launched more than three decades ago and usually awarded travellers one mile for every mile flown, and gave bonuses to those who travelled often and/or in premium cabins.
Since then, loyalty programmes have become a force in the travel industry, with almost all suppliers offering some kind of reward to repeat customers. The way they work, however, has evolved, arguably making it harder and harder to earn and redeem loyalty points, especially for less frequent travellers. But a new trend that could change this is the expansion of reward/loyalty programmes to incorporate other suppliers with whom points can be used or accumulated. The changes, however, have some experts questioning whether these programmes are still achieving what they set out to do. Is the shift to vary rewards keeping customers loyal to one brand?
Virgin Atlantic revealed plans to revamp its Flying Club programme next year. Mandy Lerena, Virgin Atlantic commercial manager South Africa, explains: “The Virgin Group and Virgin Atlantic are to launch a new Virgin-wide loyalty programme, Virgin Group Loyalty Company, with unique and differentiated reward opportunities, to reward customer loyalty across Virgin-branded companies.” According to Lerena, the new loyalty programme will offer members the chance to earn and spend miles across a range of products and services. “In the future, Flying Club members can look forward to an expanded range of valuable ways to earn and spend miles that will be powered by the new Virgin loyalty programme.”
Lerena adds that a Virgin Atlantic Flying Club member is also able to earn and spend miles with a number of non-Virgin partners, including Hilton Honors, Marriott Rewards, Avis, Eurostar and more.
Wouter Vermeulen, Air France KLM gm Southern Africa, says Flying Blue has always made it possible for its members to spend and/or earn points with other retailers, suppliers or service providers, specifically car-hire companies and hotel chains. “On Flying Blue Pointshound, you can use your miles to book hotels and car hire, including within South Africa.” Wouter says this has been expanded with the Flying Blue store, which allows members to buy products from retailers such as Apple, Sony and Fitbit. “You can also purchase ‘experiences’ such as a canal cruise in Amsterdam or a chauffeur drive through Paris in a vintage convertible, which is a good option I think,” he adds. According to Vermeulen, local partners, including the Gautrain, are also being added.
He believes an expanded offering like this is mutually beneficial. “Their brand [other suppliers, retailers, etc.] is being introduced to consumers who may not have considered purchasing from them before and the value of the programme increases as it brings more ways to spend miles,” he says.
Charlene Muller, VIP consultant, Rennies Travel Cricket SA, says clients love getting more for their money. “By being able to earn and spend miles on suppliers other than the usual would be great. There are suppliers already allowing members to spend miles on items such as flower deliveries and gifts, and there is already a buzz about that!” Muller says all airlines, car-rental companies and hotel chains should look into offering clients more varied rewards. “I have heard quite a bit of reaction to an airline offering a new reward and even though the service hasn’t been great, and the client hasn’t been booking the airline, they are very excited to earn miles again. Suppliers need to make their clients feel valued!”
An agent who wished to remain anonymous, says suppliers partnering with others to offer rewards will encourage more support. “Sometimes travellers don’t earn enough miles/points to redeem against the loyalty programme – for example, a free flight – so being able to redeem their points at an alternative retailer/service provider gives the member the opportunity to shop where they want to, not where they are forced to. Some of my Voyager member clients complain that their miles are useless when they don’t have enough and are trying to book flights using miles,” she adds.