How to Design the Best Frequent Flyer Program?

Which airline loyalty programs are the most beloved by customers and how to get yours a good share of love? How do frequent flyer miles work? Which are the best frequent flyer programs? What differentiates them? Why should your travel company invest in these features? We have analysed the top-performing airlines when it comes to customer loyalty and summarized for you the best ideas for a loyalty program. 

Fasten your seatbelts, sit back, relax and have a good read! 

How do airline frequent flyer miles work?

The frequent flyer program is a loyalty program operated by an airline to reward customers for their loyalty. As a traveller, you earn free miles for the miles that you fly on a particular airline. Miles are credits - you can use them to purchase plane tickets and, in some cases, to pay for extra services on your flight like luggage, priority etc. The rules of the program vary by airline.

Some of the airlines have a “tiered” loyalty program. Tiers have different perks, the higher the tier - the better. The more points you have, the higher your tier will be.

What differentiates frequent flyer programs?

Some of the main differentiators of the best airline frequent flyer programs are:

• Earning and redemption values.
• Blackout dates of the rewards (miles).
• Benefits.
• Network coverage. 
• Award flight availability.
• How easy it is to reach the elite status (tier).
• The ease of earning miles. 
• The ease of redeeming miles - the best loyalty programs let you cash in easily.
• Other perks that come with the membership (lounge, meals, special offers).
  

Which are the best airline rewards programs? 

We have collected a couple of different rankings from USnews and Forbes and the ultimate list of the best airline loyalty programs in 2019 is: 

1. Alaska Airlines Mileage Plan
2. Delta SkyMiles
3. JetBlue TrueBlue
4. United Airlines MileagePlus
5. American Airlines AAdvantage
6. Southwest Rapid Rewards
7. FRONTIER Miles
8. HawaiianMiles from Hawaiian Airlines
9. Free Spirit
10.  Oneworld, SkyTeam and Star Alliance
11.  British Airlines (Oneworld)
12.  Air Canada

What characterises the best loyalty programs? 

Each of the programs was awarded the best for a different reason. We have collected the best features of all the “best” airline loyalty programs to find out what customers value most about airline rewards and verified what’s in it for you, as an airline. 

Here is a list of ideas for features of the best airline frequent flyer program:

1. Evergreen miles – rewards that do not expire are definitely one of the most attractive incentives for customers. (Delta, Jetblue)

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Why is it good for you as an airline? 

Even though the common knowledge is that expiration date causes a sense of urgency (leading to more sales), motivates repeated purchases and keeps your brand top-of-mind, here are the 4 reasons why lack of expiration date of your airline loyalty points might be beneficial for your brand: 

• It reduces pressure to purchase, which can lead to higher customer satisfaction.
• It plays into a long-term marketing strategy by developing a benevolent brand identity.
• It can provide a competitive advantage over brands with more constricted loyalty programs.
• May lead to greater satisfaction levels - customers have more flexibility with using their rewards and avoid the stress of having to spend the loyalty points immediately.
  

2. Collecting points when flying with other, partner airlines. The easier it is to earn rewards, the more people want to participate in the loyalty program. It is especially important for those who cannot stick to just 1 airline because of network limitations. 
   

Why is it beneficial for an air carrier? 

If your network is limited, it is difficult to stay top-of-mind as your customers will be constantly looking for other providers because you do not fly to where they need to fly. They will not benefit from your loyalty program because they cannot accumulate enough miles. If you partner with other airlines in the region, offering different routes, you might get your customers hooked. They will book only from the airlines participating in the program they are in - and you will be on top of their mind for the routes you cover with your network. 

3. Additional perks if you are a member of the frequent flyer program - swanky lounges, exit row seats, priority check-in, priority security lane, free checked-in luggage, upgrades to business class, meals on the plane (Virgin, Southwest). 

Why is it beneficial for an airline?

Sometimes, giving away ancillaries is cheaper than reducing the flight fare. Partner services might offer to give perks away for your customers for free, just for being featured. It might be the cheapest way to run a loyalty program, plus it offers additional fraud protection - who would like to hack/sell lounge access, checked-in bags or a priority lane… 

4. Online calculator that gives you simulation on how many points you can earn (Executive Club). Simple rules - good rules! 
   

Why should you have it? 

Customer experience with your program will be high if customers understand the rules from the very beginning and in turn your call centre costs will drop down. 

5. Earning points for something else than flying - for example, for filling out surveys (TrueBlue from JetBlue) or booking partner services like car rental or hotel bookings (Norwegian). 
   

Why should you do it as an air carrier? 

Being on top of your customers’ minds throughout all their (customer) journey is an important part of e-commerce. Do not let them forget you! Plus, if you are a big airline, you can even sell it as a partner benefit in the contract. 

6. Being able to spend the points on something else than just plane tickets. Example: Avios (British Airways loyalty points) can be spent on holidays, hotels, car hire and more or Norwegian where you can exchange the loyalty points for purchases in many car rental companies, Get Your Guide or even Groupon (most of their partners participate in the program).

Why should you enable redemption of your points in your partner’s stores?

Higher customer satisfaction with your loyalty program - they can use the rewards not only when flying, which makes it perfect for less frequent travellers. Being on top of their mind throughout all their travel touchpoints makes you their first choice when it comes to air travel. 

7. Family being able to use your perks – VIRGIN AUSTRALIA has a family pooling for up to six family members; ETIHAD offers family membership account with up to eight family guests; EMIRATES offers a family option with up to eight family members, including domestic helper; JETBLUE'S offers also include family pooling with up to two adults and five children.

Why should you invest in purchasing tickets for the family of your customer?

Customer Advocacy – your passengers will tell their family, they will tell their friends about your program… there is no better marketing than word-of-mouth from friends and family. Plus you will be the go-to option among the passenger’s children. 

8. Easiness of gaining points - Alaska Airlines is claimed to be the best as whichever flight you take, you earn points. Even the cheapest flight gives you some cashback, which makes the customers come back for more. 

Is it worth it?

Giving away something every time the customer makes a “positive” action towards your brand is fostering the wanted behaviour. Have you heard about reciprocity? If you show more benevolence and your program is easily understandable and creates good feelings among customers, they will come back. We think though that a better variation of “easiness of gaining points” is number 5). You do not want to give out too much revenue, but you still want to foster certain behaviours.

9. Possibility to take companions is a great perk - who likes travelling alone? If you can take your friends or family with you on your gift flight, it is even easier to redeem your rewards. Example of an airline using this tactic: Southwest offers one of the most prized perks of any airline loyalty programs, the Companion Pass. This perk gives you a second ticket for only the cost of taxes and fees (usually around $10) anytime you purchase or redeem points for a ticket. You can take along your spouse, your friend, pretty much anyone you choose for next to nothing!

Why is it good for you as an airline? 

You increase the redemption rate of your rewards, which leads to higher customer satisfaction with the loyalty program (and your airline).

Your loyalty program influences more people - companions, that might become your future customers.

10.  The frequent flyer credit card that gives you % back in miles (or points) - customers love it because they can be a part of the loyalty program even if they do not travel that much (yet). They can earn points by spending money from the co-branded credit card and get the cashback in the form of points or miles. 
    

Why is it good for you as an airline? 

You get the non-frequent travellers to become your most loyal customers - when they start travelling more, you will always be their first choice.

What you should keep in mind when releasing and airline loyalty program?

We have listed the best features of the frequent flyer programs, according to customers. These features might be beneficial for your travel company, whether you are an airline, car rental company, bus operator or a travel agency. What you need to keep in mind is that each audience is different and in every case you need to understand your customer, do user research, user testing, A/B test your program’s rules and settings to find the best validation rules set and best rewards. You might finish up at having different rules for different types of travellers. The sky is the limit! 

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