Have you really measured the impact of tier loss on your customers?

16 November 2018

We all know that frequent flyers respond positively to loyalty programmes that give them great experiences and benefits. Those airlines that have excelled at rewarding their best customers by ensuring that their journey is enjoyable and relaxing both at the airport and on the plane consistently win awards.

However, economic pressures mean that even successful loyalty programmes are under review.  Both their ROI and their impact as profit centres are under review. Many are shifting to spend based rewards and have consequently seen the ranks of those eligible to the top tiers reduce significantly.

While most can appreciate the reasons for that type of at change, it’s a fact of life that these customers might still represent some of your very best customers – they are loyal and still using your brand as much as they can, and remain emotionally loyal. When circumstances force you to downgrade them, are you addressing the potential impact that this may have on them?

Our experience leads us to believe that this impact can be serious. And must be addressed by more than a simple notice of tier change. After all, there are a wide variety of reasons beyond brand loyalty alone why their spend may have dropped: Lifestyle changes, employment changes, a change in company expense/travel policy or the emergence of a formidable competitor.

Those who are spending less inherently interact less with your brand which impacts their emotional connection to you as well. Over time, a weaker emotional bond coupled with tier loss potentially leaves you with a large number of formerly motivated and loyal customers who are either neutral or actively disloyal to your brand.

It’s important to not only to acknowledge this, but put into place proactive strategies to address these customers – recognising and reassuring them that they are still valued even if no longer top tier. Keep the engagement on-going, and reap the benefits of keeping their emotional ties strong and their motivation to remain with you strong as well. 

Written by Peter Gerstle, Head of Travel Products