What shape will Easyjet loyalty scheme take.

Traditionally, low cost carriers like Easyjet have relied primarily on low prices to keep their customers loyal, but as they attract more business travellers to complement their leisure travellers base, they are increasingly over lapping with traditional carriers It is therefore not surprising to hear that new CEO Johan Lundgren’ will be taking their “Loyalty” scheme much more seriously moving forward and investing into it.

Currently, Easyjet say 46 percent of its passengers fly once per year and that returning customers book twice as many flights a year as new customers. This obviously reduces marketing acquisition costs and is as also likely to driver higher ancillary conversion, as returning customers tend to trust the brand more to deliver ancillaries such as transfers and hotel accommodation.

Legacy carriers base their loyalty programs around lounge access, free pre-booked seating and points based access to free flights anywhere on their networks. This allows them to incentivise and inspire business travellers based on free upgrades and seats for leisure travel on both its short haul and longhaul networks.

EasyJets low fair mentality and sophisticated yield model, make the provision of discounted fares based on mileage points unlikely. Similarly, Easyjet are unlikely to want to operate expensive airport lounges, which are primarily required by business travellers needing to work whilst travelling and less attractive to its core leisure customers.

Easyjet could get radical and create a low cost version of airport lounges. For example why not do a deal with common airport locations such as Starbuck’s to offer free coffee and dedicated Easyjet phone charging ports?

It might also decide to offer free or discounted in resort or home to airport transfer services via its existing partnership with Holiday Taxis (I wish!!).

Ironically, the biggest problem Easyjet face is the success of its paid for “Easyjet Plus”  Booking Card. This costs £199 a year, but for frequently travellers flying more than 5 times a year, this still provides great value as it provides an extra carry-on bag, pre-booked seats, priority security clearance and speedy boarding.

It’s hard to see what else Easyjet could cost effectively offer frequent travellers and as such I would expect Easyjet to launch a points based system to reduce the cost of this card for its frequent flyers. This would appeal to both business and leisure travellers alike and would be relatively simple to administer as an add on to its existing “Manage my booking” section which already records all previous and upcoming flights.

The only “Extra” I’d like to see added is some free hold luggage, but given how much revenue low cost carriers make from luggage, now they are yielding prices by flight, I think this may be to “heavy” a cost for them to bare.

The old adage is that “loyalty” comes at a cost, but in today’s google dominate world, this cost is often lower than the acquisition costs of recruiting disloyal customers each time via ppc or price comparison sites.

So for me “Low cost loyalty” is a must and not just a tradition carrier concept.

 

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