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MARKETING & COMMUNICATIONS Last modified on October 5, 2012

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Airports continue to introduce loyalty programmes in a bid to enhance their passenger appeal, but is the tactic working? Jessica Twentyman reports.

When Copenhagen Airport (CPH) launched its CPH Advantage loyalty programme in November 2011, it set itself an “ambitious” first-year membership target of  140,000 passengers.

Any fears that the goal was too lofty were quickly dispelled as it reached the figure in late July 2012 – just eight months into the scheme’s first year.

“Our recruitment drive has been a great success. We’re really surprised to have reached so many members already,” says Karen Bender, e-commerce and marketing director at the airport.

But this is no time for her team to rest on its laurels, because an even bigger challenge lies ahead now, she says: building a thriving community from that membership base.

“Our goal is to interact with members, in ways that deliver real value to them and real insight to us,” says Bender. “We had planned a lot more marketing efforts as part of our initial recruitment drive, but we’ve stopped all that now, because a large number of passive members isn’t what we need. A dialogue with the passengers who spend the most time with us is more important.”

That realisation came during the year-long planning process that preceded CPH Advantage’s launch. Bender and her team looked at other airport loyalty programmes, as well as those run by airlines, hotels and other travel industry companies, to see what worked – and what didn’t.

For example, the ‘killer app’ that has really boosted the CPH Advantage scheme is one not offered by many other similar schemes: free airport Wi-Fi access.

“What we found were a lot of loyalty schemes that had been launched but weren’t really working over the longer-term,” she says. “Our decision was that, if we really wanted to do this, we had to do it right first time, to believe in it 100%, and make sure that we offered benefits that would keep passengers loyal. It’s a lot of work to get it right.”

For many airports, it’s too much work with not enough benefit:  in a recent survey of representatives from 110 airports worldwide,  ACI World found that less than one-quarter (24%) offered some sort of loyalty programme.

More than half (52%), by contrast, are not considering implementing one, or have stopped providing one.

That’s despite a wide range of potential benefits: information about members’ purchasing habits; a chance to differentiate themselves from competing airports; increased expenditure by members eager to collect reward points; and, a closer working relationship with commercial tenants on an airport site, such as parking companies or car rental firms.

Among the reasons cited for the lack of an airport loyalty scheme were that they are too complicated to implement (26%) or too expensive to implement (23%).

Around 23% felt that existing airline loyalty schemes were sufficient to meet passengers’ needs and the same proportion said it might be difficult to convince their commercial partners of the benefits.

That last issue is often a problem when schemes are first mooted, according to the ACI report.

“It is important to keep in mind that implementing a successful loyalty programme requires good planning and collaboration with all airport partners,” its authors write.

To illustrate the argument, they point to the case of a large (unidentified) European airport that had to discontinue its loyalty programme after two years, because it was not supported by all of its commercial partners.

Moreover, they say, this programme was in direct competition with the one offered by its main carrier. This situation, clearly, was not viable in the long-term.

In the US, however, an alternative approach has emerged in recent years – one that seems to enable airports to circumnavigate some of the challenges involved in setting up their own loyalty programmes.

To date, more than 170 airports across North America have signed up for Thanks Again, an independent rewards programme run by an Atlanta-based company of the same name.

Under this scheme, participating airports can award air miles and other benefits to passengers who have registered their debit or credit cards on the Thanks Again website.

Thanks Again uses an airport’s merchant identification number to track transactions conducted at its retail, food and beverage and parking facilities and match them to previously enrolled debit and credit cards.

It then rewards participating customers with air miles from American Airlines, Delta, United, Frontier, Alaska Airlines or US Airways. The company claims it can get an airport merchant up and running in 10 days.

The latest airport to sign up for Thanks Again is Eastern Iowa Airport (EIA), which announced its participation in July.

“Our goal is to ensure that EIA customers receive the absolute best service when they travel through our airport,” says airport director Tim Bradshaw.

“We are always looking for ways to make travellers’ experiences at EIA even better. This programme is a wonderful addition to our services and provides benefits to travellers for purchases they are already making.”

Other airports to join Thanks Again this year include Seattle-Tacoma International Airport (SEA) and Gulfport-Biloxi International Airport (GPT).

However, it’s doubtful that third-party schemes can provide the deep insight that some airports demand from their loyalty programmes.

At London Heathrow Airport (LHR), data collected every time passengers use their WorldPoints loyalty cards is a major factor in strategic commercial decisions, says Nick Adderley, marketing and insight director at Heathrow’s owner, BAA.

While the card can be used by its 360,000 holders at other BAA airports (London Stansted, Southhampton, Glasgow and Aberdeen), Heathrow accounts for 95% of WorldPoints activity.

“What we’ve got is a customer database, behind the scenes, into which we pull all our different streams of customer information, merge it and match it, to the level of an individual customer on a particular journey,” he says.

The deep level of intelligence that this approach provides about loyal passengers and their purchasing habits came in handy, for example, when Iberia flights switched from Terminal 3 to Terminal 5 at the airport back in February.

BAA was able to alert WorldPoints members who travel on Iberia flights regularly to the change, as well as provide them with details of Terminal 5’s layout, the location of the Heathrow Express access at the terminal, and where a passenger’s shopping history was available, information about their favourite shops.

And BAA continues to look for opportunities to expand the range of benefits open to WorldPoints customers, says Adderley.

As of July, they can now earn and redeem points when they use the Heathrow Express service between the airport and Paddington station in Central London.

“With our better understanding of the airport and its passengers, it became clear to us that the journey to and from Heathrow is a very important part of their experience,” he enthuses.

“Now, a whole bunch of people who represent a valuable source  of business to us get the opportunity to earn WorldPoints on  their trip.”

At the same time, however, BAA takes a broad view of loyalty, according to Adderley. It’s not just about the WorldPoints programme, which not all passengers want or need to join; after all, he says, 60% of traffic at Heathrow is made up of passengers who travel less than twice a year.

That’s why the airport’s downloadable mobile app, Heathrow Airport Guide, also plays a very valuable role in customer loyalty too, allowing BAA to communicate with passengers and glean insights about them, without them having to share their personal details.

To date, around 600,000 people have downloaded this app to Android, iPhone and BlackBerry devices – and once they have, they can use it to sign up to WorldPoints if they wish.

That said, it’s the top tier of most frequent flyers that represent  the real goldmine for airports – and the ones that airports are most  eager to attract and retain, by providing them with special benefits  and rewards.

At Copenhagen Airport, for example, the CPH Advantage scheme aims to ensure that, out of its overall membership, at least 10% are CPH Advantage Premium customers, who earn 200 bonus points for every DKK100 they spend at Copenhagen Airport, compared to 100 bonus points for those at the Basic level of membership.

Similarly, the Club Airport Premier programme at Nice Cote D’Azur Airport, has a database of 18,000 members, but only 8,000 members qualify for Gold status and these are the ones that, on average, take  20 flights per year.

“We were the first airport worldwide to launch this type of programme back in 2005,” says Agnes Henry-Scalliet, head of Club Airport Premier.

Like Copenhagen, its first goal, she says, was to start building a  real relationship with the airport’s best clients. The second goal: to build a qualified database of loyal passengers in order to create new products and services and promote new routes.

“And over the years, we get to know them better and better,”  says Henry-Scalliet.

Airports continue to introduce loyalty programmes in a bid to enhance their passenger appeal, but is the tactic working? Jessica Twentyman reports.

Dubai’s debit card

Dubai Airports took airport loyalty programmes to a new level last year when it joined forces with Dubai Duty Free and MasterCard to launch DXB Connect – the first ever airport prepaid card designed primarily for airport passengers.

Dubai Airports claims that it provides a more convenient and safer way to make airport purchases than using money.

It also offers holders exclusive discounts at Dubai Duty Free and at various airport outlets and entertainment venues across Dubai and is accepted anywhere in the world where the MasterCard acceptance mark is displayed.

As part of the package, the DXB Connect card also comes with a ready to use Etisalat mobile SIM preloaded with $7 credit allowing passenger to have a local phone number as soon as they arrive in Dubai.

The cards can be purchased for a one-time fee of $26 and immediately activated at specific stands operated by Dubai Duty Free (DDF) across all three terminals at Dubai International Airport.

When they activate the card, passengers are able to select the amount they wish to load onto it. The card can then be topped up at specified locations in the airport.

According to Dubai Airports, this is the first time in the world where a prepaid MasterCard and prepaid mobile SIM have been integrated into a single package for customer convenience.

Ramzy Al Amary, vice president-Abu Dhabi district manager at MasterCard Worldwide, said: “As the world’s first dedicated airport prepaid card, the DXB Connect ushers in a new era of convenience customised for travellers visiting the UAE.

“The DXB Connect card provides travellers the advantage of carrying a mode of payment, which requires no bank account or annual fees and is more flexible than cash.”

The DXB Connect card is operated on the MasterCard network and issued by Abu Dhabi Commercial Bank (ADCB) in conjunction with Jade Payments and Global Processing Services.

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