Why ancillaries are the new loyalty programs

When airlines ask for loyal customers, they usually like to pay in rewards. How about an upgrade in exchange for some of your points that have probably taken you months, if not years to collect? Or a new pair of earphones? Is this what customers really want in return for their loyalty – and is it the right approach to only reward loyalty members with those exclusive benefits?

Even as a frequent traveller myself, I have struggled to reap the full benefits of the loyalty programs I have joined. While I try to stick to those particular airlines when booking my flights, sometimes the price just doesn’t justify the number of points in return. A cheaper option with a different airline means that I will have more cash to spend at my destination. In other cases, flight times just aren’t very attractive.

That’s why I believe that loyalty the way we know it is going to have to change.

Airlines must find new ways of generating brand loyalty in their customer base. In future, the key will lie in creating unique customer experiences. The more convenient and tailor-made they are, the more customers come back and choose an airline again. And airlines need to understand that every customer is an opportunity – not only frequent flyers.

I am fully convinced that ancillaries will play an essential role in creating these experiences. They will be the customer loyalty programs of the future.

Ancillaries are the new loyalty programs

Nowadays, a brand’s purpose is just as important as its products. When people make a purchase, they are increasingly doing so because the company shares their values and convictions.

What does this mean for airline loyalty programs?

A traditional loyalty program which offers rewards in return for miles rarely lives up to customer expectations. The best way to build loyalty with your customers is to show them that you understand their preferences and values.

In the case of airlines, this goes far beyond the booking process, the airport and in-flight experience. How the airline keeps you engaged when you’ve arrived at your destination matters just as much.

Just imagine the difference the right ancillaries at the right time through the right channels could make to your trip to – let’s say – Berlin.

You’ll receive a voucher for a free bike rental through the airline app because the airline knows that sustainability matters to you. The app will recommend you the best craft beer bars in your neighbourhood because it knows that you are keen to support local businesses. The next day, the app will offer you a tour of the city’s most sustainable architecture, and it will make it fun and entertaining in a gamified manner.

Just brainstorming here, but how about this: Visiting five architectural landmarks on the tour and collecting digital tokens using your camera and AR at those sites, will not only reveal some fun facts about the landmark but you’ll also get you a voucher for one of the city’s hippest vegan eateries as a prize?

Sounds better than that pair of noise-cancelling earphones that you didn’t really need, doesn’t it?

Understanding paves the way to the heart of your loyal customer

The sole prerequisite for the scenario above is knowledge.

Knowledge of who your customer is. Understanding what they like, value, and cherish. Now don’t go ahead and imagine airlines digitally stalking passengers. Data protection laws exist for a reason.

It’s about understanding shopping and buying patterns for certain customer segments.

With the help of these patterns, the way airlines engage with their customers will become more meaningful. Using the right data, they can connect with their customers at the right place and at the right time. Making relevant offers is the essence of every positive customer experience.

At the end of the day, that’s what brand trust and in turn loyalty are truly all about.