Redefining loyalty among modern air travelers
The COVID-19 pandemic not only dramatically limited travel but also caused permanent shifts in traveler behavior, forever changing “business as usual” for airlines. No touchpoints with travelers have changed more profoundly than loyalty programs.
In 2020, airline industry revenues totaled $328 billion, about 40% of revenue from the previous year, McKinsey reports. Benefits designed for frequent flyers continue to lose their efficacy as uncertainty around the return of business travel remains. There are predictions that anywhere from 36% to 50% of business travel may never return, according to Forbes, especially as remote conferencing grows in its acceptance.
COVID-19 will subside, but airlines may need to come to terms with a fundamental change in how they approach loyalty. Loyalty programs themselves are a business-critical source of revenue, after all, with complex partner ecosystems that depend on frequent traveler activity. But as Forbes describes, “Loyalty programs will change because people will likely be traveling less, and the old rules about what was rewarded and what rewards are desired may also change.”
With legacy loyalty technology, airlines have backed themselves into a corner.
Simply put, loyalty programs need to evolve. Airlines must make programs more agile, increase their diversity of offerings, and reconsider the various tiers and categories that define their loyal travelers.
Unfortunately, many airline business leaders don’t realize their existing loyalty technology platforms—often longstanding, monolithic systems—severely limit their success in adapting to market changes. Too many airlines have invested in framework systems that offer loyalty functionalities but do not accommodate the complex needs of individual airlines and their customers. Loyalty projects fail because airlines attempt to custom-fit new technologies to these existing legacy solutions. Too often, innovation in loyalty programs is capped, or scrapped, because underlying systems do not support it or are too expensive and time-consuming to adapt.
Business leaders need to start taking seriously new opportunities to transform the foundational digital technologies that support their loyalty programs. Fortunately, modern cloud-native platforms can support:
- More dependable business benefits
- A wider variety of customer benefits
- New currencies and “wallets”
- More versatile partner and business integrations
More agility and flexibility airlines need to meet current and future industry challenges.
In this report, we consider the new opportunities these cloudnative digital tools provide when adapting loyalty programs to today’s market realities. We also illustrate how these tools can carry airlines to future success – even in the event of future crises.
To read full download the whitepaper:
Deploying next-generation airline loyalty programs
