In 1981, several airlines developed the concept of “loyalty programs” as a means to an end – that end being to attract and hold customers in a free-agent environment. Since then, airline and hotel frequent traveler programs have grown faster than anyone could have foresaw in the early 80’s. But does this growth necessarily signal that these programs have been overwhelmingly successful with respect to their intended purpose? Now, some 20 years later, it seems appropriate to take a step back and see what those mavericks who first launched these programs into our public consciousness have really achieved. We must ask ourselves; Have these programs influenced our loyalty and, if so, how deep does our loyalty run?
There’s no denying that the programs have had a dramatic impact on the travel industry at large. In a recent survey of visitors to the WebFlyer Web site, 89 percent of the respondents said they would not remain loyal to their current airline of choice if frequent flyer programs ceased to exist. The survey results are as clear as they are startling – for many travelers, miles have replaced the cost of tickets as a determining factor when selecting a flight (and an airline carrier).
But do we really care whose miles are being offered? While a growing number of airline passengers claim brand loyalty, this loyalty tenuously hinges on the ever-changing benefits of the associated frequent traveler program. And, the competition between programs is fierce, as members are continually urged, by other frequent flyers and by the programs themselves, to compare benefits and switch their allegiance. Witness the growing problem that such partners as MCI WorldCom, Sprint and AT&T have had with the “spinners” who move as often as they can to capture sign-up bonus after sign-up bonus.
So, despite the loudly heralded claims of increasing passenger loyalty, we need to look at the breadth and depth of this loyalty. In other words, though we may be loyal today, how much would it take to convince us to switch our loyalty? Because, in the end, loyalty is measured not by our continued tenure with a given airline or hotel, but by our resolute resistance to enticements and offers that encourage us to defect.
It’s All About Persuasion
In 1981, the loyalty programs were created as a way to persuade us to remain loyal to a given airline. As each airline (and subsequently, each hotel), created its own loyalty program, more persuasion was necessary to ensure that we remained loyal to the loyalty program itself.
Persuasion, unlike coercion, is an attempt to win the “heart and mind.” Thus, persuasion must induce attitude change, which entails affective (emotion-based) change. Although persuasion is more difficult to achieve than other forms of influence, its effects last longer because the member actually accepts and internalizes the offer, such as unlimited upgrades.
One of the more popular forms of persuasion instituted by the programs is the Socratic Effect. Socrates taught that by logically linking thoughts to attitudes and beliefs, those attitudes and beliefs become more consistent. For example, lets assume your favorite frequent flyer program wants to convince you to always purchase higher-fare tickets. The program might remind you that certain higher airfares would automatically allow you a confirmed upgrade at the time you purchase the ticket – an upgrade that will earn you better onboard service, quicker boarding and de-boarding and a more relaxed and comfortable travel experience. All of this might lead to a change in how you book your travel. Without ever directly pointing it out, this program will have caused you to notice uncomfortable inconsistencies in your belief system. You find yourself thinking, “well, I don’t like coach class. I like the feeling of travel not being a rat race. I hate standing up in the aisle for 15 minutes before I deplane the aircraft – I may as well pay the higher price and get the upgrade.” The logic is certainly persuasive.
If this program is an artful influence practitioner, your purchase of higher-fare airline tickets will cease to be an external imposition – it will have become an internal value. As such, it will become part of your self-concept and will become a long-term behavior pattern.
Education and propaganda are two other forms of persuasion employed by the programs. What’s the difference between the two? Basically, if we believe and agree with information we view it as education, and if we don’t we call it propaganda – especially if the information is advocated through a large-scale, mass media appeal such as program advertising on billboards at the airport, in major newspapers such as USA Today and niche publications such as this one.
The first documented use of the word ‘propaganda’ was in 1622, when Pope Gregory XV attempted to increase church membership by strengthening belief. The term now connotes mass persuasion attempts manufactured by political entities, which manipulate far more than mere belief. Nonetheless, central to both education and propaganda is the role of the fact, the statistic, the element of knowledge that the we believe to be true. This usually gets lost when a program introduces a new award chart or other enhancement and refers to it as “improved” or based on “member feedback.”
A news correspondent first used the term “brainwashing” in 1951 to describe the conversion process that American POWs had undergone in Chinese prison camps during the Korean War. He translated the term from the Chinese concept of hse nao, “wash brain.”
Do programs try to brainwash us? They could probably be accused of that
with the constant bombardment of influence tactics we get from their partners. But for the savvy frequent flyer, this is balanced by the thoughts and opinions of other frequent flyers we often get to know when sitting side-by-side for five hours on the flight from New York to Los Angeles or the person whom we share a table with in the Concierge Lounge on the upgraded floor at a Marriott.
How Persuadable Are We?
Persuasion is difficult to measure. But after chatting with, trading emails with and tallying up a substantial number of answers to questions regarding the topic of program influence, we’ve come to the conclusion that loyalty programs probably aren’t as persuasive as they would hope to be, but are more persuasive than we might care to admit.
The programs attempts at persuasion have been largely effective when it comes to establishing the programs as brands in themselves. For instance, I can’t recall the last time that anyone we’ve interviewed or chatted with refers to the formal name of the Hilton HHonors program. Most simply say “HHonors” or “H Honors.” The Double Dip is synonymous with HHonors and has almost become its own brand. And, how often have you taken the time to say United Airlines Mileage Plus? People recognize these names as entities unto themselves, thus the program has its own brand recognition outside of the tie-in with the airline or hotel sponsor.
In order to create brand loyalty, frequent flyer programs have had to break consumer habits, help them acquire new habits, and reinforce those habits by reminding consumers of the value of their program participation. This explains why both American AAdvantage’s and Northwest WorldPerks’ recent promotions focused on partner participation.
The importance of brand loyalty has been examined at great length. Program branding is by far one of the most important factors influencing a program’s success or failure in the marketplace, and can have a dramatic impact on how the “airline or hotel behind the brand” is perceived by the members. In other words, the program is not just a representation of an airline’s product; it is a symbol of the airline itself, and that is where the core of brand loyalty lies.
On the other hand, when it comes to persuading us to remain loyal to only one program, the programs have been far less successful. Among airline frequent flyer members, some 66.7 percent have switched once or twice. So much for loyalty, as we suspect the larger majority of respondents are in the switched twice camp. And hotel programs display an even more glaring example of non-loyal loyalty – with a grand total of 40 percent of the members of hotel programs saying that they have switched allegiance three to four times. The point of this being that it’s likely that members are loyal only to the currency of miles and the benefits it brings, rather than the sponsor of the program.
Why Has it Been So Hard to Win Our Loyalty?
From the vantage point of a frequent flyer, we are all a massive group of people influencing, persuading, requesting, demanding, cajoling, exhorting, inveigling, and otherwise manipulating each other to further our ends, and in this case it’s more miles, more points and more upgrades.
Influence is a major cause of human change – whether that change is a behavior, an attitude, or a belief (I believe I will always get upgraded on Continental Airlines because of my elite status in OnePass). Inducing a change in behavior is called compliance. Inducing a change in attitude is called persuasion – and this is the much more difficult of the two to effect. If you don’t believe it, just ask any parent which method they prefer when trying to get their child to clean his/her room.
But the difficulty in achieving actual persuasion is only one reason why our loyalty has been hard to come by. When we choose a program, we invariably tend to factor in the value of a particular program in relation to our actual travel habits, and our habits have a tendency to change over time. And, to complicate matters even more, our judgements about the relative merits of a program are often based on that program’s image, rather than its substance.
The image surrounding a program is the principal source of its competitive advantage and is, therefore, a valuable strategic asset. Unfortunately, many programs are not adept at disseminating a strong, clear message that not only distinguishes their program from the competitors’, but also distinguishes it in a memorable and positive manner. Changes such as Delta recently made to its system-wide upgrade policy tend to dilute the short-term memory of the program. The challenge for all programs is to avoid the pitfalls of portraying a muddled or negative image, and instead, create a broad vision or identity that recognizes a program as something greater, rather than a set of partners and benefits that can be imitated or surpassed.
Starwood followed this path when it re-created the status quo of capacity-controlled rewards with the launch of Preferred Guest. The big difference today, as an example, is the American AAdvantage program, which has become a brand separate from the airline and, in fact, is no longer viewed as a product or service of American Airlines. A brand needs more than identity; it needs a personality and American Airlines has a different perceived personality than it’s swashbuckling AAdvantage program. Just like a person without attention-grabbing characteristics, a brand with no personality can easily be passed right over. That has often been the bane of the Northwest WorldPerks program. The WorldPerks program had never been able to establish a characteristic separate from the airline it serves. While it is arguably among one the best programs in the world on paper, WorldPerks is still fighting an uphill battle for distinction.
How Much Persuasion is Too Much?
In researching this article, I tried to count the number of direct attempts to control my thoughts and behaviors with regard to frequent flyer programs that I personally encountered in a single week. This included fellow employees asking advice about a particular frequent flyer program, the number of threads I looked at on FlyerTalk.com that included persuasive opinions, reading the newsletters and statements of a typical weeks worth of inbound email and regular mail from programs and their partners, advertisements in newspaper and radio commercials (as well as the TV ad for American Express Membership Rewards that I saw no less than four times), and a typical read through of an issue of InsideFlyer. By the time I added these things up, I realized I had lost count somewhere around 500. That is a lot of persuasion.
We live in an environment dense with influence attempts. A large portion of the population makes a living simply getting others to comply with their requests. Conservative estimates suggest that a person will receive up to 400 persuasive appeals from marketers alone in the course of a single day. Whether a manager encouraging productivity, a policeman directing traffic, a salesperson closing a sale, or a president telling us we need to spend more money on social programs – each of us is subjected to an uncountable number of influence attempts each day.
Take a look in your briefcase, or incoming mailbox (both real and electronic), or your wallet of “loyalty cards.” Each item you see is a war trophy, representing some program’s victory over its competitors. For some reason – or maybe for no reason at all – they convinced you to trade your hard-earned money for their program. How did they do that, exactly?
The successful-influence program knows that if they can manage the situation and choose the correct technique, your response to their offer will be as reliable as the springing of a mousetrap. The Northwest 10K promotion was a perfect example of just that. A very lucrative promotion was dangled in front of frequent flyers. Those that jumped at the opportunity and completed the promotion earned an easy 10,000 bonus miles. In the meantime, Northwest partners registered a huge increase in participation, which served to reinforce the powerful lure of miles. It then follows that the sale of miles to partners was boosted by the promotion. Same goes for the AAdvantage promotion, except that AAdvantage was clever in that it stipulated different partners, thereby distributing the surge in partner activity. And so the roundabout of frequent flyer activity continues.
It is impossible to measure influence, and it is equally impossible to determine exactly how well these loyalty programs have succeeded at achieving their original goals. But one thing is certain, the programs have had an impact beyond what anyone could have ever imagined 20 years ago – and have evolved in such a way that their continued existence is all but guaranteed. Perhaps those who have been persuaded the most to remain loyal to these programs are the airlines and hotels who created them.