We speak with Nathalie Belanger, Vice President of Product Management at Aeroplan in this expanded version of our 60 Seconds interview. Aeroplan has positioned itself to be much more than just a frequent flyer program, with members being able to earn miles in a vast variety of ways.
InsideFlyer
Can you tell us a bit about the new Luxury Retreats award option?
Nathalie Belanger
Luxury Retreats is one of the leaders in villa and luxury vacation rentals and we decided that they would be a really great partner for us to offer in our program. We have a pretty wide variety of prices of rewards starting at 117,500 miles for a $1,000 gift certificate all the way to 3,639,000 miles for a six-bedroom luxury Mexican villa and we have some other products priced in between in Barbados and Italy. They’re really spectacular resorts.
IF
Why did Aeroplan decide to partner with Luxury Retreats?
Belanger
For us, it’s about giving members more options. And we figured that this particular type of reward would appeal to our more affluent members who might want to use their miles for a really fabulous escape. We like to look for rewards that make our members dream a little bit about what they could get with enough miles and those are definitely very aspirational type rewards. So we like to have a good mixture always of the more functional rewards, like a gas gift card, and we also want to have more aspirational rewards like Luxury Retreats.
IF
Aeroplan is continually adding new redemption partners. When coming up with new potential partners, what do you look for?
Belanger
We definitely are always adding new options to the program and we look for suppliers that are going to broaden the scope of redemption opportunities for our members. We look for products that complement the existing accumulation coalition to make it stronger and ultimately we look at rewards that will entice our members to earn more miles. We really look at member demographics, and we also look at life cycles. We look at what percentage of our members are young professionals, boomers, families and then we try to find products that meet their needs and the current life cycles that they’re in. So we always have a fairly broad assortment of products. We also try to do our best to support our accumulation partners so we’ll include, for example, gift cards from Esso, one of our big accumulation partners in Canada. We would have some of our electronic partners supply products on the site as well. We look for companies that are a good fit for our brand. Aeroplan is a fairly premium brand in Canada so we try to find premium products to add to the portfolio.
IF
How long does it typically take for a new partner to come on board?
Belanger
We add new products on a monthly basis. Some of the simpler products it might take just five or six weeks to add but some of the other products might take a little bit longer depending on how complex the offer is. We have quite a few people on my team whose sole responsibility is looking for new products to offer our members so they’re constantly looking for new options.
IF
Does Aeroplan usually approach partners, or do the partners approach Aeroplan?
Belanger
There’s a bit of both. If there’s a great new product that’s in market that we find at a trade show or we see in new trends magazines, we’ll approach the Canadian distributor for that product. But since Aeroplan is a quite well-known Canadian brand, we are also approached on a regular basis by many product suppliers who want to offer their products to our database of fairly affluent Canadians. So it becomes a great sales channel for them. There are definitely a lot of folks who contact us with new ideas. And sometimes we’ll just look up something on our own. We created the Aeroplan music store a few years ago when we saw that digital music downloads were really coming up. We partnered with a company that offered digital music downloads and we created our own music store. So it’s a combination of those three aspects. The rewards really follow trends that are happening in the industry and in retail so five or six years ago when gift cards started to become very popular we knew that we had to add those into the program and those have been very successful.
IF
Has there ever been a partnership that just didn’t work well–one where your members did not respond well?
Belanger
For a while we had pet products like pet beds, food bowls and toys and for some strange reason those just didn’t appeal to members. We had them on the site for five or six months and then we decided to take them down. Our website is kind of like a retailer’s store shelf so if there are products that are not moving, we’ll just remove them. Sometimes it’s timing also. When we first went into non-flight rewards in 2002 and 2003, we had a lot of experiential rewards. They were quite expensive rewards and they didn’t strike a chord with members. But over the last two years we’ve actually been doing very well with experiential rewards and maybe it’s about timing or finding the right price point. You always have to be testing new types of rewards and seeing what’s going to appeal to members at a certain point in time.
IF
Are there any new types of partners that Aeroplan is looking to add in the near future?
Belanger
We are definitely planning on continuing to expand our experiential rewards to more cities in Canada. We have a lot of theater, for example, in Toronto but not so much in Montreal so we want to expand into Montreal. In the U.S. we have great coverage in Las Vegas with all of the Cirque de Soleil shows, helicopter rides to the Grand Canyon that take off from Vegas. We have reasonably good coverage in New York and in the Orlando area but we’re looking to expand to the West Coast and in other popular cities like Chicago. We also have unique Money Can’t Buy rewards such as an autographed Michael Buble shirt, an Avril Lavigne skateboard that she autographed and a guitar autographed by Iggy Pop. They are rewards that you can’t buy for cash generally and the proceeds of the mileage exchange goes to charitable organizations either of the artist’s choice or one of our Beyond Miles organizations. We think it’s a unique opportunity for members and a great way to support charitable organizations. And we love offering these awards because it supports the community. We’re also looking at adding more Money Can’t Buy rewards and also looking into leveraging the infrastucture of our Aeroplan music store to deliver more digital rewards. We’re trying to figure out which rewards would be more appealing to members so we’re doing some research around that. We’re trying to develop more of those types of digital awards that provide immediate gratification. Basically you go on to the site and within seconds you have the digital reward on your computer or mobile phone.
IF
Loyalty programs in general have been adding more merchandise and non-airline award options in the past several years. Do you see this trend continuing and why or why not?
Belanger
I do see the trend continuing. Flights still remain our most popular redemption but more and more people are using their miles for non-flight rewards and we see increases in that ratio every year. Aeroplan was really one of the leaders in North America for introducing non-flight rewards. We’ve since been copied by a number of U.S. carriers who are now offering a much broader selection of travel and merchandise rewards so I’m pretty sure it’s a trend that’s here to stay. We’re just going to continue evolving that category of rewards to match market trends and member demands.
IF
You mentioned that Aeroplan members are redeeming more miles for non-flight rewards than they have in the past. Why do you think that is?
Belanger
Sometimes people just don’t feel like getting on another flight. I think some consumers just love the ease of non-flight redemptions. You go on our website and within a few weeks or even a few days you get your product. There are no extra costs–you don’t have to buy a hotel night or rent a car or pack a bag. They might not buy the new iPod with their own money but because they can get it for free by using their miles it feels a bit like a special treat.
IF
What are some of the most popular non-flight redemptions?
Belanger
Gift cards really top the list in terms of transactional volume. Some of the more popular gift cards that we have would be Costco gift cards and the Esso gift card. In the U.S. we also offer Macy’s and Bloomingdale’s gift cards for our members who like to go shopping in the U.S. and those do quite well. Merchandise continues to grow year after year and things like the Apple iPod touch, Black Nintendo Wii … lots of flat screen TVs and 3D TVs and all that great stuff. Also things you would take on a trip with you. Luggage does well and the noise-cancelling headphones do well. The final category where we’re seeing some really big interest from members is the experiential rewards. A lot of our members are boomers. Their houses are full of stuff and right now I think they’re looking for experiences as opposed to more things to put in their homes. Things like wine tasting tours and theater tickets and we have a really fun award in Montreal called Sky Venture, which is a skydiving simulator–it’s a huge fan that blows air upwards and you jump onto it after some training and it feels exactly like you’re skydiving. Members are loving that and it’s a fantastic experience. We’re seeing a real increase in redemptions for experiences that you can come back and tell your friends about as opposed to redemptions for tangible goods.
