In a white paper aimed at the airline industry, ancillary revenue firm Collinson Latitude has published its top five strategies for increasing the pace at which customers redeem their airline loyalty points and miles. This article is copyright 2013 The Best Customer Guide.

The paper, entitled 'Accelerating Redemption', identified and explained the five strategies the company believes airlines should adopt, based on its experience of managing multiple international airline loyalty programmes. In brief, the strategies are as follows:

  1. Give customers something to dream about
    And apart from feeding their dreams and aspirations, also give customers something to keep them going. Offer programme members transparency in terms of what they can expect to achieve and ensure they receive plenty of 'sweeteners' on the route to attaining their chosen gift or service.
  2. Become part of their world
    Offer members a wide range of gifts and services which are appropriate to their broader lifestyles and tastes. Blackout dates for redeeming free flights frustrate customers where there are no seats at the lower or even standard mileage levels.
  3. Make the programme appealing to all members
    Allow redemption through a range of devices and tablets, not just PCs and Macs, and ensure that there is an attractive mix of both exclusive or aspirational and readily-attainable items.
  4. Don't overlook lower-spending passengers
    Lower spenders, or less frequent flyers, arguably have the greatest potential for increased usage, so implement a programme that allows members to 'top up' their points with cash in order to access preferred rewards more quickly.
  5. Keep in touch with programme members
    Have a clear strategy for communicating with members using a range of channels including newsletters, websites and email. Allow self-selection of preferred communication channels.

"No rewards programme, however well-researched, well-funded and well-intentioned, genuinely drives customer relationships and improves sales unless customers actually redeem their points," explained said Dan Martin, commercial product manager for Collinson Latitude. "The programme can only add value when they start redeeming, so it's vital for airlines to kick start that redemption habit as soon as possible. But with US$16 billion worth of rewards earned each year going unredeemed, it's clearly proving to be a hard habit to instil."