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How Did the Coveted Gold Luggage Tag Lose Its Lustre?

27/04/2015 11:31 BST | Updated 24/06/2015 10:59 BST

Something strange is happening in the airline industry. Frequent Flyer programmes, once the vanguard of the loyalty industry, are fast losing their shine.

In fact, airlines are juggling a liability to the tune of over twenty trillion un-used Frequent Flyer miles. But why are we turning our backs on the very schemes we once advocated so fiercely? After all, we're all still flying, probably more than ever before. So why have we lost faith in those hard-earned miles?

During my career I've helped set up and develop some of the UK's biggest loyalty schemes. I've also consulted for a whole host of airline brands, which is why I find today's frequent flyer inflection point irresistibly fascinating. And as carriers begin to frantically re-think what customer value means, I am convinced airline loyalty will become increasingly me-shaped.

Here are six ways in which airlines can make the necessary me-shaped loyalty shift:

Recognise my value, not just frequency

The name says it all. Frequent Flyer schemes reward those who travel most. But is miles flown a true indication of value? What about ticket spend? BA's recalibration with Avios is a partial move towards recognising real value without alienating the less frequent flyers among us, but it doesn't go far enough. No wonder all eyes are on Delta and American Airlines, whose spend-triggered scheme launches later this year.

Give me more ways to earn

Miles flown is the traditional currency. But sitting in row 14 for six hours is just one way to demonstrate my brand preference. What about our other interactions? Take engagement in the social space, for example. If my comments, reviews and recommendations influence others, shouldn't they be rewarded too?

And what if I don't fly often, but steadfastly choose the same airline when I do? The chance to earn rewards through everyday spend, such as the EasyJet and Nectar partnership or the BA and American Express tie-in, is a welcome way of recognising less frequent flyers beyond the confines of ticket transactions.

I am not just a seat number!

Being data savvy customers, we have little patience for 'catch all' communications. And the airline industry is no exception. We demand a certain level of personalisation and today using data in meaningful ways (such as customised offers shaped by behavioural tracking) is no longer a nice to have, but a necessity. Airlines need to equip themselves with smarter tactics - such as in-flight gamification - in order to collect personal data in the simplest and most unobtrusive of ways.

Recognise me and I'll remember you

Maybe BA took remembering customers a step too far with their facial recognition 'Know Me' programme for First Class passengers. But arming the cabin manager with an iPad bearing customer profiles is a clever way to prompt in-flight interactions which aren't just exclusive and unique but have a very positive impact on how we perceive, choose and recommend brands.

Indeed, in today's connected world we all demand a fair data-for-experience trade-off. In return for sharing our data footprint, we expect cross-channel recognition and for brands to react accordingly.

In the airline world, this means we no longer differentiate between an information request made via the website, social media or the in-person follow-up at the check-in desk. Brands need to follow suit - and definitely never ask us to repeat our data preferences.

I've earned them, let me burn them

If we have played by the rules and earned our miles, airlines must let us redeem them when, and how, we want. Lengthy phone calls navigating blackout fly days belong in the past. The future has to be about smooth, effortless, frictionless redemption that genuinely improves the travel experience. And what about other privileges like extra leg room, complimentary extra baggage allowance, companion flights plus exclusive partner deals at destination? It's time for a real breadth and choice of privileges.

You know where I am going, help me when I arrive

Geolocation tools. Social media. They're crying out to be used smartly, with localised deals and information. By making new destinations more accessible and interesting, airlines can become a truly indispensable part of our worlds, not just the means of getting from A to B.

I'll close with a smart thought from Brian Kelly, founder of ThePointsGuy.com the other day. He said "You need to identify what you want out of your programme." Notice it's 'what you want' and 'your programme'. Forget 'one size fits all' - airlines absolutely must think me-shaped loyalty to get passengers talking about them again. Get it right and airline schemes might just take off again.