The loyalty currency (points) model is without a doubt, the most commonly used framework in major enterprise loyalty programs.
This is particularly true for the Airline industry, whose brands provide an abundance of points programs that are often heavily transactional, monotonous and lack differentiation. The saturation of meaningless mileage programs throughout the industry has caused customers to increasingly feel disinterest or weariness due to perceptions surrounding complexities in redemption, and a lack of transparency and value.
So why are there so many points programs?
Despite its repetitive nature, there are many reasons as to why a points model may appeal to businesses, some of which include:
- Tangibility – points are a concrete and measurable reward which in many cases possess monetary value
- Value – businesses can often exaggerate the earning of points as opposed to cash rewards e.g., earning 100 points as opposed to earning $10 cash can appear more appealing
- Flexibility – points earn can be extended across many products and services both within a brand or through a coalition of participating merchants
- Delayed or Instant gratification – depending on the reward, points can potentially be redeemed immediately, providing instant gratification. Alternatively, members may choose to delay redemption and accumulate their points for a better reward in the future
- Gamification – brands can easily develop ad hoc bonus earn campaigns to boost engagement at critical times e.g., off-peak travel seasons
Incentivising spontaneous travel
Differentiation within an industry is critical for loyalty programs to stand out and compete. One notable airline that has differentiated itself from industry standards is Peach Airlines.
Peach airlines have recently introduced a twist on a novelty Japanese capsule vending machine known as ‘Gachapon’ or ‘Gacha Gacha’.
The popular toy machine requires users to enter a coin into a coin slot, at which point a player must twist the knob to release a random capsule. These capsules often contain fun toys or snacks and are frequently engaged by children and adults alike across the country.
Peach Airlines have introduced a viral adaptation of this game known as the ‘Peach Travel Lottery’. Travellers can pay JP¥5,000 ($55 AUD) to unlock, not a toy, but a mystery ticket to an unknown domestic destination. The tickets will illustrate a series of numbers and letters which must be decoded by searching for their numbers on a map of Japan to reveal their mystery destination.
The ticket will also contain a serial number which will enable travellers to unlock bonus mileage points that can be accessed via the member account. The amount of bonus points unlockable varies depending on the ticket and can range anywhere from JP¥6,000 – JP¥10,000 worth in points (approx. $65-$115 AUD).
The program invites travellers to undertake new and exciting adventures and create unforgettable memories.
Share your experience for bonus points
Travellers can also unlock bonus points on their mystery journey by completing missions. Along with a ticket, each capsule will contain a mission card which will encourage travellers to complete a specific task while they are on their journey.
For example. “Break open a crab at your destination and share it with the person next to you”
Travellers who complete the mission can submit photo evidence on the Peach community website Tabinoco i.e., ‘Travel journal’ to enter a sweepstake to unlock a further JP¥3,000 worth in Peach points.
The Tabinoco travel journal is an excellent strategy designed to drive advocacy amongst members. The storybook website was designed for travellers to share their adventures as well as inspire others to discover their next travel destination. Members will find they will also be able to earn bonus peach points for sharing adventures with Peach Airlines outside of the lottery program.
A fun new twist on mileage programs
The ‘Peach Travel Lottery’ program showcases a highly engaging and innovative way of earning points. Incorporating mystery and missions not only gamifies the experience but also delivers a sense of surprise, both of which help to create special and unforgettable memories with the member. The strength of strategies that drive emotional connection has been proven to manifest behaviours such as increased visitation, spending, brand affinity, advocacy, and retention (Shelper et. al 2020, p.55).
The program has unsurprisingly, become very successful since its launch in August 2021, and has continued to develop occasional campaigns such as special discount campaigns, ‘Pair travel lottery’ campaigns (where travellers can invite a friend) and many bonus points campaigns to stimulate ongoing engagement with the lottery program.
It is critical for a loyalty program to continue to differentiate and evolve. This makes it more challenging for industry competitors to easily replicate existing ideas but also acts as a way of continuing to engage and stimulate existing members.
Shelper, P 2020, Loyalty Programs: The Complete Guide, Loyalty & Reward Co, Sydney.
Amy Gavagnin is a Strategy Consultant at Loyalty & Reward Co, the worlds leading loyalty consultancy. She has worked in various areas of marketing, previously supporting departments at Westfield Scentre Group, Cass Brothers and Harvey Norman Commercial Division. As Strategy Consultant, Amy applies her skills across all aspects of the business, including promotional campaign management as well as loyalty program design, loyalty strategy development, and market research.
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