How airlines can heighten customer experience through payouts and rewards

When it comes to air travel, your customers have officially taken the pilot’s seat. In a new, ultra-competitive travel industry marked by changes spurred by the pandemic, airlines are facing strong headwinds to reinvent and improve their customer experience (CX) strategies. And in addition to lightning-quick industry evolution, the White House has now outlined specific guidelines on when and how airlines must issue compensation or refunds to inconvenienced travelers.

Airlines are going to need every tool available to keep up with increasing traveler expectations and added regulatory requirements. Fortunately, there are a number of smart, flexible strategies airlines can employ to improve CX across the customer journey, from providing rewards to issuing disbursements and everything in between.

It’s time to depart from miles and vouchers

For decades, airlines have offered bonus frequent flyer miles and credits for future flights as go-to payout strategies. But as new technology and payment options have become available, those traditional compensation tactics to appease customers after a bad experience or make amends for a disrupted trip are not always the most effective ways to build brand loyalty.

Since the pandemic hit, business travel has dropped dramatically and many businesses continue to leverage digital networking tools to manage travel budgets; and while leisure travel is up, people are taking flights less frequently. This decrease in airline traffic decreasing opportunities for people to use their vouchers and miles – rendering your appeasement strategy largely ineffective.

Further, sending the message to travelers that you will only reward or compensate them with miles or a voucher that must be redeemed at your airline can come across as more self-serving than sincere. People crave genuine engagements with the companies they do business with and expect brands to value them. If people feel like they are pigeonholed into only flying with your airline or that their negative brand interactions result in forced future engagements, they may feel underwhelmed. Think about it this way: if you dine at a restaurant and find an insect in your food, are you really going to want to return to that same restaurant to use a voucher for another meal? No thanks.

Provide flyers with the flexible options they want

Flexible payout options that move beyond brand-specific redemptions help airlines send a much stronger message. For example, versatile appeasement and reward options like gift or prepaid cards provide travelers with more options to redeem their payout the way they want. Plus, research has found that these types of payout options top peoples’ wish lists; our research 1 found that U.S. respondents, 56% felt prepaid cards are good options for loyalty program rewards or as a means of airlines apologizing for a travel issue. Consider the following:

• Offering choice doesn’t have to impact your bottom line. In fact, our research 2 found that 55% of the people we surveyed plan to use payout funds like prepaid or gift cards
  at the same organization that issued them.
• On the other hand, it’s inevitable that not all recipients will have a reason to spend payouts with your airline immediately. But more flexible rewards that can be quickly used elsewhere will provide more immediate satisfaction with your airline and send a more positive message from your brand.
• Gift and prepaid cards can be delivered almost immediately digitally, allowing your airline to appease and reward customers in seconds. Our research 2 found that about two thirds of US respondents consider digital prepaid cards the most exciting payout options, probably because these virtual payouts give travelers near-instant gratification, while also helping airlines streamline processes (an added bonus when you’re looking to comply with the recent regulatory changes).

Properly thank the people who fly with you – and the people who power those flights

Extending strategic goodwill can show flyers that you appreciate their business and their decision to fly with your airline. Whether you’re issuing a refund, making good on a mistake or rewarding a customer for their loyalty, brand credits like miles and vouchers don’t always resonate the way they used to. And they certainly don’t nurture personal connections with travelers. When you consider the multitude of reasons for sending funds to flyers, settling for the status quo clips your wings when many airlines are trying to fly higher. Consider peoples’ preferences for quick, flexible rewards and leverage modern solutions to reward, engage and appease them.

But don’t stop there! Your workforce ensures your customers’ safety and positive airline experiences – and would very much appreciate tokens of recognition for their efforts. Flexible rewards like prepaid and gift cards that empower your employees to treat themselves or save a little money on everyday household items (especially important as people face the headwinds of inflation) can be incredibly effective in driving productivity, retention and satisfaction. Happy employees are good for business, and can make a huge difference in driving positive airline experiences.

It’s time to spread your wings

The travel industry has changed dramatically over the last few years, and that evolution isn’t going to slow down anytime soon. It’s never been more important for airlines to secure traveler loyalty and engagement. You have the ability to weather any storm by implementing the above recommendations to optimize CX at a time when securing market share is vital to survival.

1 BHN EQ, Global State of the Union Insights, March 2022, n=2,165, 18+, U.S.

The article How airlines can heighten customer experience through payouts and rewards first appeared in TravelDailyNews International.