In a recent survey of select Cleartrip customers, one of the questions asked why customers selected the airline they did while booking. Here’s a screenshot of the responses to that question:
We’ve previously posted 3 reasons why loyalty programs in the travel industry suck. And it seems that customers agree–the data above is straight from the horse’s mouth and shows that loyalty programs in the travel industry are a fading star. Almost as many people care about the quality of the food as they do about their frequent flyer memberships–maybe airlines should spend on improving the food instead of on flyer miles?
Loyalty programs completely are completely failing to create any actual customer loyalty and are weighing down airline balance sheets with massive liabilities. Should airlines be considering junking their loyalty programs?
I guess most of the end users of loyalty programs are business travelers and cleartrip customers are mostly retail. So yeah it might not be important to cleartrip customers but loyalty programs do factor in for other customers.
Just my 2 cents!
Manu-Actually, Cleartrip counts an extremely large number of business travellers among our customers. We were actually quite surprised at how many of them there were.
Agree with Manu to a good extent. Most corporate travelers dont care about the fares since their company pays for it. Loyalty programs certainly make these guys stick to that one airline to a good degree. Have seen that happen with hotels as well.
I kind of agree with Manu and Vivek.
On business trips (i.e. when my company paid the bill), everyone in my (previous) firm(s) stuck with premium airlines irrespective of fare. However, when I booked my personal trips on Cleartrip, I didn’t care a hoot about reward points/ loyalty programs.
I think the loyalty programs were the greatest invention for airlines. You give away about 3-5% in miles (which eventually expire) to the flyer but get away with billing about 25-50% more to their firms. Good, no?
Hrush – % numbers are a guess. Don’t shoot me for it
Hrush,
This appears to be an over-simplification of the facts. While I agree that most loyalty programmes in the industry ‘suck’, a statement like "Loyalty programs completely are completely failing to create any actual customer loyalty" is not fair.
Certainly, fares, classes, timings and availability are the primary decision-making criteria here. Loyalty programmes can and do influence the decision despite all these factors. For example, one may not choose their preferred airline at double the price of the cheapest, but they might consider flying their preferred airline for a few hundred rupees more than the cheaper alternative. That’s where loyalty programmes come in, not just in travel, but also in banking, retail, automotive sales, etc.
As far as ‘business travellers’ go, I think you are construing them as SMEs. They are by nature very concious of the cost that their business incurs because it is essentially money out of their own pocket. Manu is referring to salaried employees of large corporates. Let me assure you that this breed clearly announces their preference of airline regardless of the pricing, and they will usually get their way too unless their companies are strictly enforcing policies on flying the cheapest available carrier.
Whenever I book a trip, I look at price (like in the survey), but if the prices are about the same, I pick what I have flown and liked before. Instead of money on customer loyalty programs, money might be better used if diverted to amazing customer service. It really counts a lot, I fly Spice all of the time because of it.
Dhruv, that is correct. cleartrip makes travel simple. oversimplification is part of the brief!
for my personal trips, I follow fare, time, airline in that order. For official trips i go for Kingfisher mostly as I am part of their frequent flyer program.
I disagree with you Hrush.
Loyalty programs, in any industry, will work if executed well. The Travel industry is no different. If the offering for a loyal customer is a value proposition, it is bound to work. Since Indians still consider flying an expensive traveling option, a loyal customer can be redeemed through better discounts on connecting flights/ higher luggage limit/ rebates in hotels etc.
Loyalty programs in international carriers have always met with high success rate.
Robin couldn’t have summed it better. It’s true for many of the business travelers. Loyalty programs aren’t a (significant) criteria for choosing an airline on personal trips. But for business trips, they are. And they are a bigger boon for globe trotters – given the added benefits like large number of miles they get to earn, airline lounges, etc. The cost to benefit ratio for such programs on the domestic sector are higher & make little sense for the ‘common man’.
And hence, assuming following are the reasons for the skewed results of your survey –
1. Majority of your customers are retail customers or SMEs & not MNCs. (The company I work for (revenues – 6 billion USD) does business with Thomas Cook for all it’s airline bookings)
2. They largely travel within India.
So IMHO, it would bode well for an airline – targetting loyalty programs at the (budget conscious) Indian flier – to focus on how a customer can redeem more miles than earn more miles.
An easy way to do this would be by making the frequent flier miles more ubiquitous – extra baggage allowance, pick up/drop to the airport by redeeming flyer miles (not earning them for choosing a partner cab service!), ability to redeem miles for the smallest of things within the airport – buying coffee, mags, duty free, knick knacks; buying stuff advertised on the inflight magazines, etc. Dishing out co-branded credit cards to enable faster files accumulation comes later.
Trust me, it’s not very difficult to develop an IT application that would enable all these things. It’s the operational & partnership related issues that the airline would need to iron out first.
My two pence.
Is Cleartrip believable for money transactions???????????
always i’m going by kingfisher airlines, Most corporate travelers dont care about the fares since their company pays for it. but me i’l always thinking about fare before taking ticket