Brand loyalty earned or paid for ~ Brand Mix

Tuesday, September 7, 2010

Brand loyalty earned or paid for

By most measures, I'm extremely loyal to United Airlines. I fly United most of the time. I'll even pick less convenient schedules, including one-stop over non-stop options. But there's nothing I particularly like about flying United, nothing enjoyable really. To be honest, I would rather Jet Blue or Virgin America--but I never do.

Why the loyalty? Because it's been paid for by Mileage Plus, United's frequent flyer program. Mine is a loveless loyalty created by paid-for attachment to that program. If that program was to go away tomorrow, my loyalty would disappear as well*.

In the last couple of posts, I introduced the concept of brand value (see here and here), which says that value is the difference between the revenue earned from your sources of differentiation vs. their costs. United and the other major airline carriers build value through their awards programs but it costs them a lot of money. Airline frequent flyer reward liability is estimated in the billions of dollars.

It could be that our flying experience would be a lot better if airlines had never come up with loyalty programs. Perhaps they would have used all of those billions of dollars to try to earn our loyalty in other ways. But, at this point, the airlines are just as trapped as we are. They can't abandon their programs. That would be suicide. But, given the awards program expense and effectiveness, airlines can neither afford nor justify the cost of significantly improving our experience either.

This gives smaller carriers or new carriers an opportunity. Without the same level of commitment to frequent flyer programs of their own, they can use the money not spent to try and build brand attachment in other ways. That won't change the flying habits of the hard core, award addicted travelers like me but they can target people for whom there's still hope.

Meanwhile, I'll be heading back to the United terminal next Monday buying my sandwich beforehand so I don't have to resort to buying one of those dreaded snackboxes in flight. Wish me luck!

* Actually my loyalty wouldn't disappear completely because there's a second reason I fly United--that's the Premium Executive status I've earned as a frequent traveler. Status means better service, access to upgrades, better seats (no 'back of the bus' seating for me) and, the all-important, early-seating-so-you-get-onboard-before-the-overhead-bins-are-full privilege. This range of benefits would mean I'd still fly United vs. any of the other major carriers even without frequent flyer points. On the other hand, I'd be much more likely to switch between airlines and try the new carriers out to see if the experience was really all that much better.

Photo: In-Flight Drink Cart by davitydave (Flickr)


Charlie Quirk said...

Nice post Martin,

Without too many brands to choose from, airlines do have a pseudo captive audience. Knowing they have their customers over a barrel, they try and lock them into these loyalty programs in a loveless marriage.

I'd love to see some innovation from the smaller carriers in this regard. Pity there are so few of them that manage to stick around for any period of time.

seo marketing said...

combination of both makes branding more good...any resource you can use as long as it help its consider good..

branding said...

I agree that it is a combination of both. Usually, business owners pay for it because they look forward to earn from it. You can find online experts in this kind of field that helps company owners start and build up their brand with a boom.

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