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Customer loyalty still defined by mileage program in the airline industry

Travel protocol at major corporations dictates that senior executives can’t fly the same airplane on business trips. The lawyers claim it’s too risky. Actually, I think the real reason that executives don’t travel together is because they are heavily vested in different airline mileage programs…

I’m flying Lufthansa because it’s part of United’s Star Alliance, and Sanjeev and Jon are flying British Airways because it’s an American partner. We’re talking 15,000 miles, people! It’s worth it to arrive in Delhi two hours later, don’t you think?

The major transatlantic airlines fly the same equipment, the food and beverage service in Business class is comparable, and the seats all fully recline into beds so nobody watches the entertainment on overnight flights anyway. So unless you’re flying Singapore Airlines to Asia, there’s not much to the major carriers. It presents an interesting customer relationship dilemma. For business travelers with a couple hundred thousand miles in a program (I crossed 300K in United’s Mileage Plus program a few months ago), an airline has to screw up pretty bad to lose a customer. I know, because Jon Sawyer and I trash-talk each other’s choice in carriers all the time, and neither of us has convinced the other to budge!

So the marketing strategy for the business traveler would seem to be 1) treat your most valuable customers really well so you have some good will in the bank to cover the times when you will inevitably screw up, and 2) identify as early as possible the young business traveler (your most growable customer) and suck them into your mileage program as quickly as possible. It’s an ugly way to achieve customer loyalty, but it works.

From the Lufthansa Senator Lounge in Frankfurt, listening for my name over the paging system that means it’s my turn to take a shower.