Though mileage retailing has only been around since the early aughts, today it ranks second-largest ancillary revenue driver for airlines and travel brands around the world. As these airlines grow, so too are their mandates to make their loyalty program—and their currency retailing factions—bigger, better, and more profitable.
Our CEO, Rob MacLean, covered these topics and more at Loyalty Summit Americas in Chicago with Emirates Skywards VP of product and member engagement, James Curry. Here are five takeaways on how selling points and miles drives immediate revenue and long-term engagement.
Most people are familiar with the concept of Loyalty Currency Retailing—selling program points/miles to members—as well as the economics of this transaction. Mileage retailing is straight cash inflow for a loyalty program, and at a high margin to boot. But the long-term profitability of a mileage transaction goes far beyond a single mileage purchase.
Members who buy miles go on to fly more and engage more within their program lifetime. Members who purchase points/miles are known to take five times more revenue flights over the following 12-month period, and redeem 6-10 times more points than non-purchasers.1
When international and regional travel came to a halt, loyalty programs became a crucial touchpoint in order to maintain member engagement and keep their brands top of mind when travel resumed.
Interestingly, despite travel restrictions, some brands that leveraged their loyalty programs during this time experienced record-breaking points/mileage sales, solidifying that there is a real demand for program currency outside of immediate redemption needs.
From a currency retailing perspective: the more data you have, the more sophisticated your targeting, the more miles you sell. Of course, there are a lot more steps in that process but the headline is: tapping into advanced loyalty analytics allows programs to grow faster, do more, and up their program engagement.
With so much pressure on databases, programs need to be strategic about how they communicate with their members. Leveraging personalization, advanced analytics, segmentation, and triggered communications ensures each member receives the right offer at the right time, in the right channel and with the right messaging.
The Beatles said it best: you get by with a little help from your friends. It’s simply faster, easier, and more profitable to set up or relaunch a buy miles program with the help of an expert partner. Take for instance Emirates Skywards, which used to have a solid in-house buy miles solution. When Points partnered with their Skywards program, mileage revenue increased by nearly fourfold!
Today's loyalty programs are highly sophisticated, but many brands are finding that when they look to the future, they don’t or won’t have the bandwidth to keep up. Leveraging loyalty expertise and products means programs can have the capacity and the creativity to grow, innovate, and adapt now and into the future.
Sources:
1. Aggregated Points Data