Living the dream or just dreaming? An airline loyalty programs report

Executive summary

Consumer loyalty programs have proliferated as companies compete for new customers and seek to retain customers in an increasingly competitive environment. The airline industry has arguably the longest history in developing these programs. But the growth of non-airline loyalty programs – such as those in retail, car rentals, financial services, and hotels – has put increasing pressure on airline points (or miles) currency. This Deloitte POV report, “Living the dream or just dreaming: Does your airline’s loyalty program align to your commercial strategy?,” examines the current state of airline loyalty programs, which remain an important channel for client engagement. It outlines some ways that airlines can get the most return from their investment.

“Living the dream or just dreaming” discusses the optimal design of a loyalty program, and explains why it is so important that the strategy of the program is fully aligned with its operational design and monitoring method.
Deloitte suggests airline executives consider four key questions regarding their loyalty program:

• Is it designed as an integrated part of the broader strategy of the airline?
• Is it designed with a deep understanding of the target customer?
• Is it maximizing the value it delivers to the airline and to its members?
• Is the airline enabling the program to be successful?

The report also outlines a loyalty program maturity continuum, with the objective being a leading program focused on united value creation.