When Miles Merge: How American and US Airways Can Make a Runway Success
Fewer words will test the mettle of a loyalty plan operator than these: Merge 100 million frequent flyers, and do it without a hitch.
That is the number of loyalty plan members American Airlines and US Airways will have to combine once the two companies merge. That task may be a while off, but make no mistake, the people responsible for managing these programs are already thinking about it.
One of the most difficult and critical steps of a major merger, particularly in the airline industry, is in combining the complex technological systems and reservation networks of the two. A misstep or breakdown can cost an airline millions in sales and who knows how many customers. Rivals such as Delta and Continental, meanwhile, will be circling the territory, waiting to pick up any discontented travelers.
While the consensus has been that the frequent flyer miles of American’s and US Airways’ loyalty programs are safe, it does not mean that the program options, once merged, will remain the same. Already, talk about consolidated routes and seats has many wondering if that will result in fewer opportunities to redeem reward miles.
American and US Airways—actually, any organization required to combine its loyalty program—can use these changes as an opportunity to stand apart. The early steps in the loyalty merging process can set the tone for how the customer experience will be post-merger, and distinguish the company from its competitors. This is what I would advise to any executives looking to combine their loyalty programs:
Make the miles go farther: Transform American’s AAdvantage and US Airway’s Dividend Miles to include additional forms of reward currency that expand redemption options for members. The airlines already have the needed insights, in the data collected through their loyalty programs, to identify which services or products are most relevant to their best customers. By expanding the rewards selection, as suggested below, they could capitalize on these insights to enrich the customer experience while not putting added pressure on the merging airlines and their route structure.
Some examples of how the points can be used include:
-Airport parking
-Baggage delivery from the airport to the traveler’s final destination
-Food and drinks in the airport or on the flight
-Access to airline VIP lounges
-Transportation from the airport
Secure status, assure members: Recognizing and preserving, or even enhancing, membership status is critical. Assign a team to bolster consumer confidence in the program. Synchronize messaging across the organization to regularly assure passengers that their status in the new program will be maintained, and potentially enhanced if they were members of both programs and splitting their activity.
Stay on the passengers’ radar: Don’t leave loyalty members guessing, ever. Provide them timely, relevant information about frequent flyer program changes via preferred communication channels (email, online, direct mail, mobile). Use the data gleaned from travel patterns to tell the Seattle-to-Toronto flyer specifically how program changes will affect her travel plans in good ways. Create a dedicated website and hotline, and monitor social media and call center activity to gain insights from customer comments.
Empower employees to “do the right thing”: Remember that workers are going through a tremendous amount of change, which can significantly alter customer service. Invest in the resources to keep your employees involved and familiar with every step of the transition process. Genuinely engaged employees will deliver something that strategy and effective execution never will, and that’s heart. Further, engaged employees are more apt to create engaged, and therefore loyal, customers.
Buckle up in case of rough patches: American and US Airways have the benefit of learning from the mistakes of others. Combining reservations systems is a hair-raising prospect, and both airlines should prepare themselves for potential issues involving delayed or canceled flights, lost bags or untracked miles. While it is essential to take care of all customers, the new airline should be especially in shape to manage the experiences of its best customers. They use the airline the most, and therefore are most likely to encounter any rough patches in the merger. Be ready with relevant makeup offers (such as bonus miles) and personalized notes apologizing for any inconvenience. With well-timed, resonant messages, the likelihood that brand advocates become “madvocates” can be quickly diminished.
