As I passed through the US Immigration recently, when the official asked what I’m going to the US for, I replied, “I’m delivering a speech at an airline loyalty conference”. To which he casually exclaimed – “loyalty for airlines? I just go for the cheapest fare man!”. That gave me even more impetus to try and find the answer to the loyalty puzzle at the conference.

In late February, I spoke at the Loyalty11 conference, where a majority of the leading airline loyalty executives gather annually. This year, it was held in Dallas, and I managed to round up some key experts in airline loyalty business – from the stalwart AAdvantage program, to the soon-to-be started AirAsia’s loyalty program. And asked them just one question – what will have an impact on the future of airline loyalty. Here’s what they had to say:
[youtube]http://www.youtube.com/watch?v=w_h8m_sq9EQ[/youtube]

What does the future of airline loyalty programs hold?
Looking through my notes from the conference, here are five indications towards the future (including some quotable quotes from the conference):

“Loyalty is no longer defined by the repeat customer” – Tom Klein – President, Sabre
There are three customer segments: the satisfied customer, the …

It may seem like an absurd question – why would an airline know a cryptic user id? But what if he’s a real person, on Twitter? Moreover, if he’s a top tier frequent flier? And tweeting about you all the time too! Then I’m sure the airline would want to know about him.

I just encountered such a person. His name is Tim Feyer, and just by looking at his last 15 tweets, I’m able to tell a log about him.

He’s an Executive Platinum on American Airlines’ AAdvantage
He’s flown 100,000 miles in the last two months, almost all on AA and over 3 Mn lifetime miles!
He almost always only travels First or Business Class
He always uses the Admirals Club
He’s engaging with other fliers on Twitter, and actively sharing his own experiences and helping them out

Now, I’m sure American Airlines has a ton of information about Tim in their AAdvantage database – but do they know how active he’s been on Twitter? Probably not. In fact, after speaking at the Loyalty11 Conference and the Social Media in Travel Conference in February/March, I don’t think most airlines are yet able to differentiate their frequent fliers amongst the hundreds of …

It’s a very simple proposition. “Like” a Facebook fanpage to get a random reward. In the case of American Airlines’ AAdvantage, the reward is to get between 100 to 100,000 miles just for liking their Facebook fanpage, in their Mystery Miles contest.

If the smart folks at AAdvantage had run this campaign a week earlier, they’d have surely made it to the Top 10 Facebook Contests by Airlines, which we put out last week. Because the results they’ve achieved in just three days seem phenomenal!
The most successful Facebook contest by an airline, till date?
The loyalty group at American Airlines, AAdvantage, set up the Facebook fanpage on Feb 1. And in the first couple of weeks, they managed to garner 2000+ fans, organically. Then they decided to launch the Mystery Miles campaign to drive membership, and the numbers hit through the roof.

In 24 hours, they went from 2,558 fans to 163,000 and had reached a staggering 210,000 fans at the time of this post, just 54 hours after the campaign was launched. Moreover, the interactions and engagements on the fanpage increased dramatically too, from just 41 likes for one of the initial posts, to over 1,200 likes for …

In the last two months, I traveled on a dozen different airlines, in three continents. Each with a different loyalty program. And each just a difficult to understand for the so-called “elite” traveler. It seemed that while trying to please an ever-increasing variety of travelers, airlines were creating a veil of confusion before the traveler even signs up for the program.

So then, what should an ideal frequent flyer program look like to make it truly work for the airline brand? Taking inspiration from the best loyalty programs in the world, as well as my own observations from the two conferences in Miami I spoke at last week, here are some thoughts.

What would make me a loyal traveler with an airline?

Simplicity – How often do you know exactly what you can redeem from the points earned from your next flight? What if it was as simple as for every $1 spent, you will be able to redeem $0.01 off your next ticket or a partner purchase? I think keeping the earning-burning process as simple as possible would attract many more customers for …

Last week, I spent three days in Kuala Lumpur, Malaysia, hanging out with Loyalty marketing professionals from around the world at the Loyalty 2010 conference. I met a number of very talented and interesting people, from airlines, hotels and even retails chain that are trying to drive loyalty.

Also part of the event was the Loyalty 2010 Awards for the Most Innovative Loyalty program. The judges had shortlisted the Top 3, and the audience voted for the best. Air Berlin came out tops, though I think each program was very unique. And I share with you here, what makes them so good!

1. Air Berlin’s MyRoute customers earn double miles on their frequently flown routes
Try to solve this problem. You need to get price sensitive customers to fly you on their most-flown routes, which are also the most competitive due to many airlines offering an undifferentiated product on those routes. You know you got to think out of the box when solving this one. And Air Berlin’s Johannes Ganser and Sophie Wennekers, along with their Loyalty Marketing team, did just that.

In April 2009, the airline launched MyRoute where members select …

If you’re already up and running on Twitter, Facebook or other social media tools, a great way to augment your social media efforts is by tapping on one of the hottest trends around, location based services (“LBS”). Location based social networking is something VERY well suited for airlines. Just like “Tweets” was the buzzword of 2009, by the end of 2010, I expect “Mayor” to be the buzzword. And, these services are made to work well in the travel industry.
Popular Location Based Services
If you’re unfamiliar with LBS, here are a few that are popular, including a couple of travel specific ones:

Foursquare – Foursquare is a location based game/application, where users “check-in” at places around the city.  They get points for check-ins, adding new locations, and extra points for multiple check-ins in one day.  Check-ins can be automatically shared on Twitter and Facebook.  They can also become “Mayor” of a location if they have been there the most out of all Foursquare users.  Friends have access to see where you are, and where you’ve been, which can facilitate social gatherings that might have not otherwise happened.

Some companies are starting to use this application to …

.
Continuing my conversation with Randy Petersen – probably the world’s best known frequent flyer – we chat about the relevance of social media to airlines, the future of Flyertalk and Randy’s predictions for aviation in 2009.
Frequent Flyers + Web 2.0
.

Traditionally, travelers have picked frequent flyer programs for convenience, not always because they are the best program.

But today, they choose a program because of its merits, because the Internet is open and it breaks down boundaries. “Self-selecting… is the biggest testimony of a good program”, Randy claims.

Randy believes that most of the current business travelers are going to retire soon and will be replaced by the next generation that lives and breathes social media. These customers are going to be totally immersed into it, and airlines need to adopt it sooner than later. Exactly the same point I’ve been trying to make in my recent articles on airline branding and social media.
Flyertalk as the next Web 2.0 powerhouse?
Flyertalk, a community for frequent flyers Randy started 11 years ago is one of the most popular of its kind out there. Though Flyertalk wasn’t started as a social media …