Note: This is Part 1 of a three-part series on LCCs and loyalty. The first part offers five compelling reasons to start thinking about loyalty. The second provides three easy ways to track loyal customers. The final part will offer five no-cost (nearly!) solutions to driving loyalty.

Before you raise your eyebrows, let me declare that yes, I do know why you might be slightly surprised to read the title of this article. You might say that LCCs exist to carry customers cheaply from one point to another without offering peripheral services or caring about customer loyalty because everyone will come if your price is low, right? You might say that LCCs themselves couldn’t care less about cultivating loyalty or building loyalty programs because that would be an unnecessary investment of time and resources. Right? Wrong! This article will build on the premise that while LCCs have been doing one L (low-cost) well, they need to start thinking about an equally important L – loyalty!

Before I go on to my thesis, let me state upfront that I am not talking about creating loyalty programs. I’m only concerned with …

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’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 …

If you’ve been in aviation for some time, you’re probably familiar with the Freddie Awards. In fact, that’s where I gave one of my first keynotes on social media for the airline industry. In fact, in May 2009, I also had the opportunity to interview Randy Petersen, the man behind the awards, right here on SimpliFlying. Alas, that same year, it was announced that the Freddie Awards would end, leaving no one to speak for the frequent traveler.

Now, the folks at Airline Information have taken up the challenge to honor the best airline loyalty programs, at their Mega Awards ceremony next week in Montreal. And in the Freddie Awards tradition, the Mega Awards also have a public voting component, which will determine the People’s Choice Awards. Voting is now open (till 13 Oct) and you can vote here: http://ow.ly/2Qyqx

While it is probably difficult to replace the Freddies, I think the Mega Awards are a step in the right direction. The best part is that the awards will be presented by Freddie Laker Jr. himself!

I will be …

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 …