Frequent flyer programmes and strategies are being put under the spotlight at the 2010 Loyalty event, being held in Kuala Lumpur and organised by Airline Business and Global Flight, writes Mark Pilling in London
The topic of customer loyalty is one close to the heart of Azmil Zahruddin, the chief executive of Malaysia Airlines, particularly for a carrier with the boast that its "MH" IATA code stands for "Malaysian Hospitality". He will be outlining how important loyalty is to the Asian carrier during a keynote address before 200-plus loyalty programme senior executives and specialists from around the globe at Loyalty 2010.
For over a decade, Malaysia Airlines has sought to win and keep customers loyal through its Enrich FFP. It is a key element of its commercial strategy. "Enrich holds the key in consumer data and a wealth of membership analytics that the airline can capitalise on for all types of communication strategies," explains Raja Dato' Nordiana Zainal Shah, general manager corporate marketing & loyalty programme at Malaysia Airlines. "Consumer loyalty needs to be constantly nurtured and in times of any market downturn it is these customers that will continue to support us."
Although Enrich itself is a fairly young programme, Malaysia Airlines was one of the first Asian carriers to create an FFP. In 1987 the carrier launched the quaintly named Esteemed Traveller FFP. It built on this in the early 1990s, making another innovative move by teaming up with Cathay Pacific Airways and Singapore Airlines to develop a joint FFP called Passages.
Passages was officially dissolved in 1999 as the carriers went their own ways on FFPs. "Enrich started on a two-tier membership programme - broadly categorised as Blue upon membership entrance and Gold for the high mileage achievers," says Nordiana Shah. This has expanded to four tiers "in line with the dynamics of market circumstances and the evolving needs of our members".
The highly sought after Platinum tier was introduced in 2002, originally by invitation only and confined to a selected group of frequent flyers with the highest miles within the Gold membership. Benefits range from a meet-and-greet service to a dedicated pre-flight departure lounge and personal menu of choice.
However, the carrier felt the top three categories covered too broad a base of customers and was very much skewed towards front-end travel. "In 2006 we launched another milestone with Enrich Enhanced which saw the birth of the Enrich Silver tier as the stepping tier into our elite membership benefits," says Nordiana Shah. "This decision was driven by the need to address the frequent economy class traveller which, in our market base, is especially relevant to the corporate traveller. [This is] particularly applicable in an economic slowdown when corporate policies were predominantly redesigned to a cutback on front-end travel. Our Silver tier is today the fastest growing base and makes up about 4% of our total membership."
As it celebrates its 10th birthday, Enrich now boasts a membership of 1.65 million people spread across 248 countries with Australia and the UK the largest member bases after Malaysia. The FFP has been growing at a steady rate of 10-12% a year over the past five years. In 2007 it added its first co-branded credit card in Malaysia, which produces a "lucrative revenue stream...in addition to boosting our brand visibility".
For Nordiana Shah the immediate aim is to stimulate a higher rate of membership activity within its Enrich Blue base and to roll out activities that will accelerate these members to the elite tiers which make up about 5% of the total base. Another objective is to expand Enrich activities beyond Malaysia.
"More than 50% of our membership today rests within Malaysia," she says. "And even though our bank and lifestyle partners are globally spread out, our partnership marketing activities today are still mainly confined to within Malaysia and, to a limited extent, the region. Australia, which is a key market for us, remains to be tapped more significantly, similarly so too with the UK and our neighbouring markets of Singapore and Indonesia."
Nordiana Shah adds: "Enrich continues to be a key revenue stream for the airline, a trend we will continue to uphold and enhance especially as we venture beyond Malaysia's borders."
Loyalty 2010, the annual gathering for FFP and travel loyalty professionals, will take plan on 23-24 February 2010 in Kuala Lumpur. It is being organised by Airline Business & Global Flight and the conference manager is Kelly Farley. Contact Kelly on +44 20 8652 3492 or e-mail her at kelly.farley@flightglobal.com for further details or take a look at the event website.
Source: Airline Business
