Gamification: Taking airline loyalty programs to the next level

Brenda logs into her Frequent Flyer Program (FFP) member portal. She has been accumulating Frequent Flyer Miles that she intends to redeem. Brenda realizes that she needs 300 extra miles over her existing balance of 9000 miles to complete the purchase. Will Brenda now have to buy additional miles? Or will she have to wait till she accrues enough miles? Or, is there a brilliant marketing opportunity hidden in this potentially frustrating customer experience? One that not only rewards the customer, but also helps the airline collate more member information and actual purchase preferences?

Today, almost all airlines have a mature FFP aimed at not just improving customer loyalty but also to fend off fierce competition from low-cost airlines on short and medium-haul as well as international routes. Way back, when Texas International introduced the FFP in 1979 to award miles based on distances flown, it was the only way customers could earn loyalty miles. Now, anything from dining out to shopping online on co-branded credit cards does the trick. However, the key to customer loyalty remains a positive, end to end travel experience. Accrual of miles alone can’t do this.

In Brenda’s case, the airline which had ‘gamified’ its FFP immediately helped her overcome her dilemma. It prompted her to fill in additional information related to her personal travel preferences. While this earned her extra miles, it gave the airline precious member data that helped them refine their services. Interestingly, it does not stop here. Brenda utilized her newly earned miles to book her holiday tickets. Later, she came to post travelogues on their website and shared these on social media, which kept earning her more miles! Of course, Brenda is thrilled. But, so is the marketing team at her favorite airlines. For, not only do they have information related to Brenda’s actual preferences and her lifestyle, she is also their very own brand advocate on social media!

While a positive travel experience includes minutest details like zero re-booking fees, quick and hassle free check-in, more legroom, inflight entertainment (especially in long haul flights) or free Wi-Fi, airlines cannot ignore the
omni-channel loyalty experience through multiple access points across social media. Passengers use social media to check-in to locations, endorse the airline, participate in their social media activities, provide valuable feedback and become the airline’s brand ambassador.

Social media is a powerful tool in driving meaningful passenger experiences and can add value in terms of incentivizing options that include non-mileage-based rewards. Airlines can no longer ignore this emerging reality. Especially, not in a competitive environment where customers are subscribed to multiple loyalty programs that vie for their attention. This has meant a steady decline in the number of ‘active’ members despite ‘new’ memberships.

Airlines looking for customer-engagement find that relationships have become more transactional than emotional. Another critical aspect is the information database itself has become huge and unwieldy, resulting in abundant transaction data but scarce personal member information.

What airlines need is detailed, authentic data supplied voluntarily by frequent flyers that can be used for effective customization and personalization. Most of the personal information comes from the enrolment form that members fill-up. On an average, of all the fields in an enrolment form, only a few are mandatory. Often, customers choose to skip the non-mandatory fields leaving behind a large void in the information related to valuable details like relationship status, family members, employment, actual travel preferences, etc. This information is critical in behavioral analysis and subsequent personalization. This is where ‘loyalty gamification’ steps in.

Airlines need detailed, authentic data supplied voluntarily by frequent flyers which can be used for effective customization and personalization.

The Power of Gamification

Unlike the misconception, gamification is not necessarily about building games. It is about engaging customers actively by applying game-based thinking. Gamification leverages the innate human motivations to keep gathering rewards or miles. This matched with their sense of loss aversion – rewards lapse when members are inactive for a long period – ensures that engagement is continuous. However, game mechanics are constructs of rules that ensure enjoyable gameplay using positive feedback like points, badges, status, progression, etc. to build up the users’ motivation that they can share on social media. In fact, it is the social aspects integral to gamification that makes it so powerful. Based on incremental levels of activity, gamification helps increase engagement without incurring additional spend.

Once gamification is incorporated into an airline’s FFP portal, it helps build an information trove. Besides motivating Brenda to provide additional information, as mentioned above, FFP brand managers can derive important travel behavioral patterns from her travelogues. Further, they can identify how other passengers are reacting to it and sharpen their segmentation and targeting strategy. This will be a key pillar for personalization of offers and other communication. (See Figure 1: The Cycle of Gamification) Also, Brenda earns additional miles once her travelogue is published as well as encouragement and more miles when other travelers ‘like’, ‘share’ or ‘comment’ on it. This triggers a chain of events that not only encourages her to write more but other users as well. Slowly, a searchable repository of travelogues build up. Travelogues and other member-generated content have critical data elements ingrained in them. Deciphering these allows micro-segmentation of customer database through deep data analytics. No doubt, it helps in subtle yet sharp targeted selling of destinations and travel experiences directly related to the airline or its partners.

Based on incremental levels of activity, gamification helps increase engagement without incurring additional spend.

Figure 1: The cycle of gamification

Along the same lines as travelogue, contests, polls, raffles, etc. too may be deployed to obtain information from passengers. Each of these will infuse a sense of friendly competition, recognition and a sense of community fueled by ability to earn additional FFP miles.

Airlines have realized that it is important to focus on making all loyalty processes including accrual and redemption not only transparent but fun too! The prime component of engagement mechanics is the analytics engine that tracks, analyzes and deciphers user activities across multiple channels. This information enables businesses to construct models that support engagements and interactions that users prefer thereby influencing their behaviors and ultimately meeting business objectives. Gamification is not a tactic but a strategy!

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