Considerations Of The Airline Companies For Framing The Rewards Points Scheme

Rewards points are a way in which the service or products suppliers prefer to reward their loyal customers

. For every unit of the product or service bought or for the quantum of money spent, the organization credits the accounts of their customers with certain number of points. When these points accumulate to a good number, these consumers are given the option to get these points redeemed in one or more than one way. Airlines, too, do the same. They reward their customers by crediting their points for every mile flown on them and giving the option of redeeming the same. So, every time you buy the flight tickets, you accumulate the points. Though the airlines generally provide these points, this shall not be thought of a general trend. In fact, there are a number of options open for the airlines.

Whether these schemes shall be provided in the first place or not? What is one reward point equivalent to? What shall be the threshold level after which the customers will be able to redeem these points? What are the various sources through which these points can be redeemed? What level of ease of redemption shall be built in the scheme to achieve the stated objectives and targets? These are some of the basic questions which shall be addressed by any airline company if it decides to provide the rewards programs.

You would find that though most of the full service carriers provide these schemes, you might not find this trend same in all the airlines. The budget carriers might be focused more on providing cheap air tickets for your travel rather than having the rewards program. Similarly, different airlines have different modes of calculating these points. Usually, the airlines award one point for every mile flown. Even the memberships of these airlines are based on how loyally you continue to fly on these airlines and this is judged by the points which you have accumulated.

Another major area of consideration is to devise the ways and means in which these points can be redeemed. Whether the airline would be offering to fly the accumulated miles free of cost, or will it provide them the online shopping avenues or enabling them redemption in some other way which is actually beneficial for their loyal customers.

The airline has to figure it out what impact will these rewards programs have on the competition? Since any airline would be operating in a competitive environment, it is natural to expect that these programs can also be used for benchmarking of competitors and therefore, these have to be competitive.

by: Shawn Parker

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