Five (nearly) zero-cost solutions for low-cost carriers to reward loyal customers and drive loyalty

Note: This is Part 3 of a three-part series on low-cost carriers (LCCs) and loyalty. The first part offered five compelling reasons to start thinking about loyalty. The second part provided three easy ways to track loyal customers. This final part offers five nearly no-cost solutions to drive loyalty.

Update: The entire 3-part series is now available as a single, downloadable pdf here.

After last week’s article, you now have a fair idea of where to find your loyal customers. Hence, it’s time to actually set the virtuous cycle of loyalty in motion. Why cycle? The age of social can no longer bear the burden of two-way traffic not looking each other in the face – it’s no longer the age of broadcasts or pure need-based consumerism where a cold, dispassionate relationship develops between the customer and the airline. Instead, social interactions between the airline and customer can evolve into life-long virtuous cycles of buying and selling based on not just mutual needs but mutual respect based on the value each party brings to the other. At its very basic, this can be broken down to a couple of scenarios: “I will reward you because you spread goodwill about me and get me new customers”. And on the obverse, “I will fly you/recommend you because not only is your service excellent but you also understand and acknowledge that I bring value to you.” See the cycle now?

The conversation economy

Social media, in many ways has taken us back to the market of yore. Remember the tales your grandma used to regale you with? Of the small corner shop where she always bought her wares from? Where she’d have long chats with the shop-keeper and he’d offer her tea and special discounts on his wares. Social media is bringing back the “market” of the old days. It’s futuristic in its technology, tools, presentation and sophistication. But at its heart is the simple, old belief in the “conversation economy”. But care must be taken to understand that the economy functions not because of the “conversations” but the subtle parameters hidden behind those conversations. These parameters would include – you guessed it right – respect, loyalty, admiration, trust etc. And these tie the customer and airline into a closely-knit unit destined to be together for a long time.

The question is: can your low-cost airline, which might already be strained for resources, offer something to your loyal customers by way of rewards to tie them into such a close knot with you?

Yes, you can

Here’s the essential idea broken down into three simple tenets: first, reward the customers in ways that compel them to either fly with you again or recommend you wholeheartedly; second, ensure that the rewards are within your means; third, ensure that the rewards make tangible differences to the travel experience or airline perception of your customer.

So I offer you five really low-cost (closer to zero, I’d say) solutions for your low-cost carrier that will immediately make those who fly you a lot, much happier to not just fly your airline repeatedly but also recommend you to their social circles:

  1. Priority check-in: For a person who travels a lot, one of the most depressing sights when you enter the airport is looking at a really long check-in queue. I remember actually SMSing Shashank (CEO of SimpliFlying) while in a long queue once about how nice it would feel if LCCs would start offering priority check-ins to their most frequent customers. To keep the sanity of things intact, you don’t even have to offer it to me everytime. You can limit it to, say, just 3 or 5 priority check-ins per flight and do your brand a world of good. Costs much? I hardly think so.
  2. Priority boarding: If you’re flying an LCC, the chances are you want to be at the front of the boarding line so that you can get arrange all your hand baggage comfortably in the overhead cabins before the crowd comes rushing in and blocks the aisles. Why not allow me (or similar) frequent-flyers of your LCC the opportunity to be one of the first to board? I know some airlines (such as Tiger) earn ancillary revenues by selling “boardmefirst” coupons. Even if you have to forgo $10-20 per flight (for those who’re not Tiger, there’s no real opportunity cost), wouldn’t such costs be mostly negligible? If you’re really afraid of losing the money, why not set parameters? Say, 1 coupon per 2 flights flown in the last month?
  3. Seat-selection: This is possibly trickier to negotiate. You’d possibly need to set up some sort of coupon code generation system for enabling customers to get the discount during booking. Also, I understand that this is potentially a big ancillary revenue generator for LCCs. But still, after setting more stringent parameters for awarding this (fewer people awarded, more flights to qualify), I’m sure there’s much to gain from the pleasure of customers who recommend the airline wholeheartedly. Why does the recommendation of a frequent-flyer matter? Remember when you asked an expert about a certain thing and went against his advice? I don’t either.
  4. Baggage vouchers
  5. Food vouchers: I’m clubbing the two together because they behave similarly. Both offer things customers value free of cost. But, for the airline, there’s often respite in the fact that while frequent-flyers will, in general, be very interested in selecting seats of their choice, I’m rather certain that they will not always want to have free food nor will they always have extra baggage that will make them redeem the free baggage vouchers. By making the vouchers time-limited, airlines can ensure that while they do offer sufficient value by way of loyalty rewards, the cost of these rewards is generally a negligible amount of ancillary revenue compared to earning huge swathes of goodwill and repeat business.

That brings us to the end of this special series on LCCs and loyalty. I look forward to your views on the points I’ve put forward.

Let us know what you thought of the articles and the ideas within them. Agree? Disagree? Write to us in the comments box below or tweet us @simpliflying.

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