Airlines and Loyalty, what’s the problem

Airline were the first to develop loyalty programs known as “Frequent Flyer Programs”. You would think being the first they would be the best, but I beg to differ. Now if you are a gold of platinum member of some programs they seem to work ok for seat upgrades but other than I find them restrictive and not customer friendly. I booked a trip two weeks ago and  decided to try one of the airlines that’s third on my preferred list. I had sufficient miles in their program to get a free round trip. My travel date were blocked out so I decided to test the program and came up six alternative dates which as it turned out were also blocked out. Sensing my frustration the booking agent suggested that I could donate my miles for use by military personnel. On the face that sounded like a good idea but I asked if they would also have the same problem with blocked out dates and was informed they probably would.  So in essence I was donating a gift that would cause them the same frustration I experienced. So how does this apply to retail? If  the goals of a loyalty program are to extend the life time value of a customer a create good will then don’t develop a program that ultimately frustrates your customers. Make the rules and thresholds for getting rewards attainable and usable. Starting on Monday I will post three articles next week explaining the following:

• How to create a program
• Why its essential to your survival and growth
• Effective ways to use the data you will accumulating