Redeeming air miles

"A programme is only as great as the value the customer perceives it being able to provide, so presenting a good value proposition to the right target or the right customer is imperative."

That's all very well, but surely there must be more to ensuring a programme has staying power? There is more, says Papa, and in the 17 years since it was established, SAA Voyager has gained valuable experience in delivering on its promise to customers, while growing its member base and increasing value proposition for its loyal customers.

He says one of the most valuable lessons they have learnt is that, regardless of the complexities behind a programme's structure, it must still be simple to use. "This has been one of the biggest challenges most frequent-flyer programmes have had to confront. In addition, many have experienced problems with respect to customers' misunderstanding of the programme rules or the earning ability, as well as difficulties with redemption."

As with many loyalty programmes, part of SAA Voyager's revenue is generated through its association with other partners. It is crucial to connect with partners that can offer strategic fit and strategic value, says Papa.

"Like other loyalty programmes, we generate benefit from the mining of the database, so we try to identify partners that speak to all our key performance indicators, which increase business for both, increases revenue and increases our member base, and furthermore locks in value for customers."

A major criticism levelled at frequent-flyer programmes is that one has to spend a lot of money before earning just a few miles. Papa agrees that this is particularly true of non-frequent flyers, but points out that frequent-flyer programmes, by nature, are designed for specific niche markets.

"The more one flies, the more quickly one will accrue miles, up-tiers, and the more expensive the ticket, the more miles one earns, allowing one to enjoy the benefits of the programme.

"What it does for the nonfrequent flyer or first-time flyer is it becomes an aspirational programme. If you look at the reward as being air travel, be it a flight to London, New York or Mumbai, as opposed to, say, a kettle, that's what it's all about and why frequentflyer programmes have remained so successful - the overall reward is so aspirational and so big.

"By introducing alternative ways to accrue, we're opening up our membership to a large portion that does not accrue as quickly, as opposed to earning miles from flying, and this is where the criticism comes in. However, we acknowledge that it's essential that we also look after our non-frequent flyers and are currently investigating ways to provide them with more tangible benefits, from both earn and spend.

"What we've already done is to give them the ability to earn from almost any other channel, through our diverse partner relationships, and because of the partners we now have, their earning ability is so much greater than it used to be.

"There are some programmes that allow one to redeem from the first mile, and we are also exploring the possibility of redemption by using part miles and part money."

He says proper communication is vital. "We're working hard at talking directly to customers and personalising our communications." - Erica Webster

Source: Business Times