#458: IAG Loyalty shares Strategy, Innovation and Insights
Nov 14, 2023
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Rob McDonald and Silvia Espinosa from IAG Loyalty share insights on their loyalty business with 40 million members. They discuss partnerships, Avios-only flights, gamification, and innovative loyalty initiatives in the travel industry. They highlight the importance of innovation and good execution in customer experiences and the growing significance of loyalty programs.
IAG Loyalty collects over 60% of Avios outside of flying through non-airline partner redemptions and innovative features like Avios Booster.
IAG Loyalty aims to become a global loyalty currency, expanding partnerships with airlines and other businesses while prioritizing customer needs and delivering a seamless digital experience.
Deep dives
IAG Loyalty's Transformation and Expansion
IAG Loyalty, formerly known as Air Miles and Avios, has rebranded to reflect its expanded offerings beyond airline rewards. With over 40 million members worldwide, the loyalty program collects over 60% of Avios outside of actual flying behavior. They have introduced innovations such as Avios Booster, allowing customers to double, triple, or quadruple their Avios earnings. A subscription model has also been successful, providing customers with the option to purchase Avios on a monthly or annual basis. IAG Loyalty has formed significant partnerships, including Qatar Airways and FInnair, which enables Avios members to redeem and earn points with these airlines. The program aims to become a global loyalty currency, exploring opportunities to collaborate with both airlines and other businesses.
Customer-Centric Focus and Improvements
IAG Loyalty prioritizes customer needs and continually works to enhance the customer experience. They have shifted their programs to a spend-based model, providing more value to customers. In addition, they focus on non-airline partner redemptions and have launched Avios on flights with BA, enabling customers to redeem Avios for every seat on certain routes. IAG Loyalty also offers options for Avios redemption outside of travel, such as their own wine business and partnerships with programs like Nectar. Furthermore, they introduced a charitable redemption option, allowing customers to donate Avios to supported causes. These customer-centric improvements and enhancements have been well-received and have significantly increased customer engagement.
Innovations in Loyalty Programs
IAG Loyalty constantly seeks to innovate and improve its loyalty offerings. They have launched Avios Booster, a product that allows customers to amplify their Avios earnings. The initiative has received an incredible response, with customers flocking to use it. The subscription model, introduced about a year ago, has also been successful, offering customers the ability to purchase Avios on a regular basis. The program has seen high adoption rates and impressive renewal rates. IAG Loyalty finds inspiration from the hotel industry, particularly IHG, Marriott, and Hilton, which have transformed their loyalty programs, providing seamless and consistent experiences across their brands. Additionally, they look to companies like McDonald's, which use loyalty to better understand customers and improve their experiences, as examples to follow in enhancing their own offerings.
Expansion and Future Focus
IAG Loyalty is constantly expanding its partnerships and global presence. Aside from their collaboration with Qatar Airways, they are also planning to include Iberia in the partnership. Furthermore, Finnair will adopt Avios as its loyalty currency in 2024, becoming the second airline outside the IAG group to do so. IAG Loyalty aims to continue expanding its loyalty currency to other airlines and businesses, focusing on clear customer benefits and value. They believe there is a real opportunity to transform Avios into a global currency and plan to explore collaborations beyond airlines, all while maintaining a strong focus on customer needs and delivering a seamless, digital, and engaging experience.
