Analysis: AirMiles aims to rebuild brand loyalty

The UK’s longest-running loyalty scheme faces fierce competition from budget airlines and alternative schemes. Alex Black asks how AirMiles can differentiate its offering and recapture the sparkle of its heyday

If you have a loyalty card, how many points have you got on it? Is it worth the hassle of cashing them in for a one-way flight to Inverness on Wednesday morning, or is a free kettle more appealing?

Due to the emergence of lower-end supermarket loyalty schemes such as Nectar, AirMiles, which caught consumers' imaginations in the free-spending 1980s, now seems to be coming down to earth with a bump.

But ex-AirMiles head of communications Claire Keane – now at Edelman in Ireland – emphasises that the scheme is still 'about aspirational travel, not 50p off at Burger King'.

Last week AirMiles sat down with newly hired agency Lexis PR (PRWeek, 13 January) to thrash out the details of a campaign that aims to put the UK's original loyalty programme back on top.

Realistically it has only one more chance to impose itself and take ownership of the travel rewards market. Two rebrands, a failed MBO and an increasingly cluttered market have sapped much of the product's prestige over the past five years.

The easyJet threat
To regain its status, AirMiles needs first to rise above the budget airlines. Launch Group CEO Johnny Pitt, whose agency pitched against Lexis for the contract, says: 'The industry is unrecognisable from 1988 [when BA launched the scheme]. Firms such as easyJet have made  flying less special.

He argues that AirMiles should be more about treating the customer with exclusive packages, rather than just giving them a cheap online flight.

AirMiles comms manager Claire Watson says Lexis's brief covers the two core aspects of the business: the collection and redemption of points. The collection aspect of the campaign is essentially a drive to build on the number of corporate partners – 'putting more miles in the customer's hands', as Watson puts it.

Because AirMiles does not have a tie-in with, say, a car maker or mobile phone company, these could become areas of future interest. Watson refuses to be drawn on this, saying the campaign is still in the planning stage.

Redemption of points, though, is the main challenge. AirMiles has six million UK customers signed up to the scheme, but it still needs to encourage them to use the points they have racked up. 'Lack of points redemption means lack of affiliation. If people aren't redeeming, they're not getting involved and that doesn't build brand loyalty,' says Firefly consumer head Brandon Stockwell, formerly in charge of the AirMiles account at Cohn & Wolfe.

One solution is to use points redeemers as brand ambassadors – spreading interest and showing apathetic consumers what they can do with their hoarded miles.

'Get redeemers to share great experiences and show that AirMiles points can quickly be racked up through normal shopping, especially through clever use of credit cards,' advises Stockwell. 'This makes collecting points more of a positive choice.'

That would certainly address the confusing messages  currently put out by the brand, claims BGB Communications director Helen Coop. 'People are confused as to what AirMiles does,' she says. 'They don't know whether it's a tour operator or a reward scheme and don't necessarily know about the partners. Consumers need to be told in simple terms what the company does and why they should bother to get involved.'

Expanded offering
And what about those who believe AirMiles is 'a BA thing'? Watson retorts: 'AirMiles can be redeemed with more than 100 airlines, and can be used for hotels, car hire and holiday packages.'

However, the company has its work cut out if it wants to retain the momentum behind the expansion of its offering, according to Travel Trade Gazette chief correspondent Samantha Mayling.

Rebranding as The AirMiles Travel Company in 2003, the firm now offers paid-for flights and holiday packages.

'AirMiles does tend to get lost in the market,' Mayling says. 'If it wants to push its scheme to the travel sector and build its partners, it is going to have to offer more well-packaged holidays that give  attractive commissions.'

With competition from Nectar on the rewards side, and Lastminute and Travelocity on the travel side, the big question is: will the brand be aspirational enough to stand out?

Fresh from a four-way pitch process that threw up plenty of thoughts on the prestige angle of AirMiles' offering, Watson is keen to focus the product on higher-end consumers.

'If you buy a £1,500 sofa from Heals you get 1,500 air miles; enough for a pair of return flights to Barcelona,' she explains. 'Similarly, if you buy a £3,000 Kuoni holiday from our website, you will also get 1,500 miles.

'In both cases you're getting a free holiday for buying something you would have bought anyway.'

£1,500 sofas? £3,000 holidays? If AirMiles can keep itself pitched at that sort of level, it need not worry about the prospect of free kettles siphoning off its customer base.

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