Let’s start with the definitive question of the new era for airlines. If all prices are equal, how do you win a customer?
Technology is certainly a part of it and the on board experience unquestionably is too. But let’s be real — it’s usually chicken or fish whatever airline you fly and every airline can buy the same technology.
So how do you separate yourself beyond shared catering or identical seats with unique color schemes? Perks and loyalty is the latest answer. The way things are going, you no longer need to be a frequent flyer to have tangible benefits, just one who is loyal.
Airlines Move To Milestone Perks
JetBlue and American have started the year off by doing something few other airlines have, but many more airlines will in the future.
Both airlines now offer customers perks before they hit any official “tier” or “level” in their loyalty program. These are perks for crossing achievable milestones which many people should be able to accomplish with as little as a couple annual trips.
Hotels were already on this trend, but more on the in between elite statuses, and not so much the “before status” ground. The exception would be free wifi for anyone who enrolls in their loyalty program. It’s quite a powerful driver in this age.
The goal? Capture those annual trips. Every one of them.
With basic economy, legacy airlines made a conscious choice to compete with discount “no frills” carriers on price and that was important, even if unpopular. Consumer data suggests at least 90% of passengers make purchases based on price alone.
And yes, many may fail to factor the cost of ancillary purchases like seats or bags with some lead in prices, but that’s another story for another day.
The risk with that price based strategy was that if everything differentiating part of the legacy airline experience was stripped away, price would always be the only deciding factor. Would brand, or perception of a better experience be enough? Not always.
So here we are with customizable perks before status.
Fly or spend with us a couple times and you might earn priority boarding, passes for preferred seats or a beverage on board. Both American and JetBlue are now allowing customers to choose their perks as they earn them.
At just 15,000 loyalty points, which can be earned from spending or flying, an American customer can now pick between having priority benefits for one trip, a higher group boarding for the year or preferred seat coupons. JetBlue’s choices are arguably even richer and more broadly appealing.
For a customer booking on price but with multiple airline options to choose from at the same price, the ability to actually achieve rich rewards should certainly fuel the purchase decision.
If I can fly Frontier and get absolutely nothing for my $50 fare, or fly JetBlue for the same price a few times a year and get some drink tickets or security fast track passes, I’ll absolutely choose the latter.
This makes the concept of customer loyalty extend well and truly down to the base, and to people who aren’t frequent travelers. Loyalty is valued, even if it’s for one or two annual trips, rather than once or twice a week.
It’s a powerful notion and one that will be incredibly fun to watch, as more airlines bundle their lower tier perk options.