Written by Marisa Garcia – Flightchic.com
As Virgin Atlantic moves to split its loyalty program into two separate companies, with the new Virgin Group Loyalty Company (VGLC) launching this month to manage the miles element of the airline’s loyalty strategy, we spoke with Donna Orman, VP of Loyalty to discuss strategies for fostering long-term relationships with customers and positive brand association.
“Any loyalty program and any loyalty strategy should always be an extension of the brand,” Orman says. “I would always say that, whatever I’m doing from a loyalty perspective, we have to make sure that our product is excellent first. That engenders real loyalty. Then you add the icing on the cake—with the sprinkles—that make it much more enjoyable.”
Making it better
There is a competitive element to loyalty schemes, especially with airlines offering a wide range of incentives to loyal flyers. Virgin Atlantic has enjoyed a positive brand reputation for many years, but that doesn’t mean that the airline can take customer relationships for granted, Orman explains.
“We need to ensure that our proposition is as good, and then we would like to say it is better than in market. That’s the next layer,” she says. “What is the market doing and how can we make sure that we are giving customers what is expected? How do we make it even better?”
The move to create VGLC is intended to make the offering to customers better. The tier program, Flying Club, will still be owned and operated by the airline. VGLC, which is led by airline industry veteran Andrew Swaffield as CEO, will open up new opportunities for customers to earn and redeem miles with Virgin Group companies and other partners.
“A big part of what we will focus on this year is differentiating the customers’ experience based on their loyalty to the airline and their tier status..making sure that their experience is differentiated; that it is better as a result of being part of the program and better than our competitors,” Orman says.
“The other part is the currency, where the customer is able to collect and spend miles when they interact with us and engage on a regular basis. Then you get added value, a result of their loyalty. They get back the value proposition that we give through the currency.”
“Customers will be able to spend across a number of other Virgin companies and maybe other products as well. Equally, they can collect miles much quicker and perhaps get the opportunity to redeem points for flights much quicker as well.”
“That’s the main driver for the airline: that we’ll give more choice to collect and spend their miles as a result of a program. That increases interaction and satisfaction for our customers which, ultimately, we hope, will increase their loyalty to the airline.”
VGLC will remain as part of the airline during the first part of this year and will subsequently become an independent company, with time in between to align values and ensure the long-term success of both loyalty elements.
“What Virgin Group Loyalty Company (VGLC) is going to do for us is that, by creating a program that operates across the whole of the Virgin Brand, we can expand the Virgin Brand,” Orman explains. “We are pulling all of that together and giving more strength and value to the Virgin Group brand.”
At the same time, Virgin Atlantic is the process of partnering with the Air France/KLM loyalty program which will further extend the value offering for customers, particularly an opportunity to earn on European routes. Orman was unable to say at this time what the plan might be to extend the loyalty scheme to FlyBE, due to the very recent nature of the airline’s acquisition.
Given recent high-profile data breaches of airline loyalty programs, and the attractiveness of travel company loyalty databases to criminal actors, we asked Orman for her views on data protection and account security.
“[Security is] at the top of any businesses’ agenda,” Orman says. “We constantly review that and ensure that our security, the protection of the customer data and their miles is at the top of our agenda at all times. As we move to VGLC, our systems will remain the same.”
“There’s no systems change so it all remains secure and protected. At any point in future, should VGLC wish to introduce new systems and new databases, then the same rigor and protection of the customer data and miles will be carried through. We provision to be sure that there is no question that this issue is of paramount importance for us.”
Virgin Atlantic has also been concerned to ensure that the new organizational structure will only add value to customers and not negatively impact them.
“An important point to make for all of our existing Flying Club members, as VGLC kicks off, is that there’s no change for them,” Orman says. “Their miles are protected. The currency remains the same. There may be a point in the future where VGLC changes the name of the program but there will never any risk to their balance or to the value of their miles as a consequence of this change.”
“From an airline perspective, the part we’re really excited about is the ‘Virgin’-ness of this. How we make this feel more ‘Virgin’. Our customers love the brand. The more we make it feel part of the Virgin Group, I think that’s a value-add for our customers.”
“What we are developing in our loyalty program is giving customers choice and value based on their engagement with Virgin Atlantic,” Orman adds. “That’s the kind of thing that, as we look to this year and how we continue to evolve the core tier program, how do we continue to make that something that the customer is in control of and choose and how do we continue to add value to our most valuable customers.”
Airline loyalty programs have also given rise to a community of loyalty scheme “gamers,” individuals who have turned miles accrual and redemption into a rewarding hobby—and in some cases a lucrative profession. We asked Orman for her views on the value of the “gaming” for the brand profile.
“There is a cohort of people who feel like they like to play the system and feel that it’s worked to their advantage. They feel pretty smart about that, and that’s quite an addiction. I can relate to that, having worked in the loyalty industry for more than 20 years,” Orman says.
“If you look at the Virgin Group loyalty company and their Virgin Red app—which is a non-currency cross-Virgin Group loyalty proposition—they have a lot of gaming within that. The people who are in that program are very loyal Virgin customers. They love playing the game and they engage with the app in a very personal way.”
“They have a lot of direct contact with many of the staff that work on the team because they’ve built that kind of rapport. I do think it’s an exciting part of loyalty development. It forces interaction, and interaction gives you an opportunity to have conversation and build a relationship with the consumer.”
“I think, from that perspective, it’s a really important part of loyalty. It isn’t necessarily for everyone. It’s for the points chasers and the gamers who like to be part of that, but it’s a really important part and I think it’s where loyalty is moving to.”
Gaming isn’t just about earning and redeeming miles for a great value offering. It includes a strong and vocal community of DYKWIA (do you know who I am) travelers.
“The big part we have to think about how we increase the customer experience. A pure currency and the transactional points part is a really important, but what the customer also wants is an element of experience. They want you to demonstrate that you know who they are. They want you to be using their data effectively. They want some immediacy on what they are doing.”
“I think the way that VGLC will be building out their plans, to make the currency even more engaging, I would expect over the next few years for more and more of that to come into play. I think we’ll see that [trend] across the whole loyalty business.”
While many travel brands go out of their way to recruit “Influencers” to promote their brands on social media, the Frequent Flyer and Points & Miles community already includes influencers who are highly engaged on multiple social channels and who have fostered a large following based on genuine feedback. Orman recognizes the value to the airline of building strong bonds with these individuals.
“Absolutely! Your super-users are the key of what you’re doing,” Orman says. “Many would argue that the impact of that community is better than you can buy in any other environment. That’s why when we talk about the strategy moving forward, we need to be listening to the customer and the choices that we make need to be customer-centric.”
“The power of social media and the voice of the customer is so loud now that you can’t afford to ignore it. You need to centre your strategy on what the customer wants. You need to think about what is being said about your product and your proposition across that social media platform; and you need to be responding to it—forming relationship with those people as well.”
So what is the secret-sauce to building those strong relationships with ready brand advocates?
“You have to be authentic. You have to be genuine and hone your proposition. The social media environment are quick to sniff out the rubbish.”