Friday, 8 August 2014

Loyalty Cards

Tangentially related to privacy which I'll discuss later regarding information asymmetry, but first I wanted to comment on this article that appeared on LinkedIn: Business Travelers Are Saying "Buh-bye" to Loyalty Programs - Here's Why by Christopher Elliott, a "Reader advocate" for National Geographic Traveler

"After years of putting up with blackout dates, broken promises and bait-and-switch games, American travellers — particularly air travellers — are saying “Enough!”
They’re refusing to play the loyalty-program game, jettisoning blind brand allegiance in favor of a more pragmatic view of travel. Price and convenience are trumping mindless devotion to an airline, a car rental company or a hotel."

This applies equally to European travellers to I suspect. But let's look at the price-quality-customer service dimensions. I did as the article states a few years ago and switched allegiance from one to another, despite accumulating a sizeable amount of points and occasionally using them to upgrade it actually became too difficult to actually use those points.

I remember a few cases clearly. The first was trying to enter a business lounge at Helsinki Airport - according to the "loyalty" scheme terms and conditions I had enough flights to qualify for an upgrade to the next tier, thus allowing me access to the business lounge. Except that there was a mistranslation between the English translation and the "correct" terms and conditions. The airline customer service basically stated it wasn't their fault. Given that the lounge at the time was empty, but staffed by no less than three "customer representatives" make it all a little too surreal.

The second was at Heathrow when lounge entry was not just dependent on the card but on the airline that issued to card, despite both airlines being part of the same alliance. It worked like this: if you gained the second tier on airline A you could enter business lounges run by the alliance that A was a member of, except, if the lounges were at an airport where airline B, also of the same alliance, was the major carrier.

The third was when trying to book a flight with air miles. For my selected flight I had enough miles and successfully made the booking until it came to select my seats, where upon the whole process failed and I was unceremoniously ditched out of the booking process with a terse error about the flight no longer being available to points holders. It turns out this was an artefact of the internal IT systems and actually you had to call the customers service department to book the flights - after a long hold where you were constantly told that all of the customer service representatives were busy, but you really are valued by the company you're trying to spend you money with.

After a few flights across the Atlantic I switched to Lufthansa - Frankfurt and Munich are clean, efficient and as pleasant as airports go. Lufthansa may not have good economy seating on long haul but the crews are some of the most professional (and smiling!) I've had the pleasure to be on an aircraft with.

I actually have no idea actually how to redeem the points I've collected with Lufthansa and SAS - they'll probably expire or have expired without my knowledge without me ever receiving any bonus from my loyalty as a customer.

A few years ago a colleague of mine called a major Nordic airline in response to a request for customer feedback. It turns out that they couldn't care why he stopped flying with them. Surely with all the data analytics being applied to our data collected, the airline never stopped for a moment to question why customers suddenly stopped flying with them. 

Now due to primarily economic reasons, I fly with whoever gives me the best deal. Given that the terms and conditions are pretty much the same regardless whether you fly a national carrier or a "cheap" airline, price will always win. 

Given that many established, major airlines decided to compete with the cheap carriers by matching their standards and terms, it is no wonder that the loyalty of the customer to the airline has all but disappeared?

Then, we come to credit cards and store cards...will these go the same way as air miles as customers realise that the deal they get is barely worth the loyalty?

But as a final statement, given that this is all about customer loyalty - has anyone ever been contacted by an airline, shop or other about why they stopped using those products offered?


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