1. • Cognizant 20-20 Insights
Social Loyalty: A Way Forward for Airlines
Executive Summary on consumption of a particular service, such as
purchasing an airline ticket, buying miles using a
For most airlines, social media engagement is a
branded credit card or partaking of a service via
given. Any airline that is not yet participating in
a channel partner. But none of these incentives
social media is missing out on a major business
account for a customer’s social interactions.
opportunity to connect with customers.
Airlines have typically awarded miles based on
Most airlines have a Twitter or Facebook account. customer transactions with any of the aforemen-
Twitter is the primary channel for customer com- tioned services; given the torrent of social media
munication and, in some cases, for delivering activity, it’s essential that airlines now integrate
customer service. Facebook is predominantly their customers’ social interactions with their
used for creating brand awareness, and some loyalty programs.
airlines have created apps for booking tickets
or choosing seats. Outside of these company-
State of the State
controlled accounts, review sites such as Trip With advances in smartphones and high-speed
Advisor provide a way for consumers to share data networks, consumers can always be
their travel experiences and offer feedback to connected to social networks. They look at their
airlines. social networks as an important source of advice,
solutions and a way to share their experiences.1
It’s relatively easy for airlines to monitor their Such constant connectivity was among the key
brand mentions and engage with customers factors in driving airlines to set up accounts
on corporate accounts residing on Twitter on Twitter or Facebook, thereby establishing a
or Facebook. However, many users are also presence where their customers are talking or
discussing their experiences on thousands of socializing.
other platforms that need to be monitored and
addressed with a proper engagement strategy. Examining the Twitter accounts of some of the
front-runners in this space, it is clear that each
For any social engagement to be successful, the company has a huge number of customers
first and most important step is to identify where following them, and most are using Twitter to
the conversation is happening. The next step is to provide customer service (see Figure 1).
engage with customers to create a positive brand
image and, based on ongoing conversations, The large number of followers shows the amount
identify brand advocates and detractors. of social capital that an airline can generate if it
engages with customers effectively. Today, many
Traditionally, brand advocates are assumed to be carriers are using Twitter in a siloed fashion
customers in the top tier of the loyalty program. to provide customers with a quick response to
These traditional loyalty programs are based one-off inquiries and, in some cases, to engage
cognizant 20-20 insights | february 2012
2. Getting Social
Airline Twitter Handle Followers Tweets
Delta @Delta 283,677 4,249
Southwest Airlines @Southwestair 1,211,047 8,225
Air Asia @AirAsia 288,050 8,938
American Airlines @AmericanAir 316,406 17,391
Note: Twitter metrics as of Jan. 16, 2011.
Source: Cognizant
Figure 1
in problem-solving. Additionally, many carriers go unnoticed by the airline. Meanwhile, no matter
use Facebook to introduce special offers and as how — or whether — the airline responds, any
an alternate channel to initiate the ticket-booking commentary on social media can greatly impact
process. the purchase decisions of the customer’s network
of followers, since they would most likely trust the
Delta2 and FinnAir3 both host blogs to share authenticity of the customer’s comments.
behind-the-scenes activities, experiences, stories
and ideas generated by employees, as well as Air travel is a commodity business, with punc-
to converse with customers tuality and price being the two most important
There is no to better understand their factors impacting airline choice. However, 35%
of the decision-making process is influenced by
enticement for likes and dislikes. However,
engagement on both of these other perception factors, so brand image can play
customers to blogs is exceptionally low. To a big role in shaping ticket purchase decisions.4
share their good boost activity, these airlines By identifying influencers, and engaging with
them on social channels, companies can nurture
experiences on need to ask an would a
question: Why
essential
these relationships, transforming the influencer
social media sites. customer come to the site, into a brand advocate. By sharing their particular
read the blog and comment? travel experiences and writing reviews, these
What’s in it for him or her to share their thoughts influencers can help promote the airline, resulting
with the airline and their followers on Facebook in a superior brand image.
or Twitter? Beyond customer service, it remains
These social contributions need to be incorpo-
unclear why consumers would feel compelled to
rated as a key part of airline loyalty programs and
discuss their experiences, good, bad or ugly.
rewarded with miles or another valued reward.
Social Loyalty The challenge is that social media and loyalty ini-
tiatives at most airlines are operated by different
Challenge: Rewarding Social Behavior
groups that do not work in conjunction with one
Traditionally, loyalty programs have been another. This is a major reason why loyalty teams
designed to reward users with points when they fail to identify and reward social influencers.
consume an eligible service. For example, by
purchasing airline tickets or using a co-branded Another major big challenge is that airlines can
credit card, customers are awarded with miles. be so focused on their Twitter and Facebook
accounts that they neglect listening to customers
Conversely, customers receive little value (and conversing on other social platforms. They do not
no remuneration) for sharing positive experi- have a strategy in place to identify the influenc-
ences on social media. No airline, according to ers, nor the social tools to enable the process.
our research, offers to reward their customers’
social engagement, whether in the form of loyalty Solution: Overlapping Programs
points or any other award. There is no enticement Social loyalty is a program by which an airline
for customers to share their good experiences offers loyalty rewards not only in return for the
on social media sites. At most, the customer who consumption of goods or services but also for
submits a review might receive a response from activities on social media. It requires airlines to
the airline, provided the review was on an official overlap their social media programs with their
airline account; at worst, the customer’s efforts large and well-established loyalty programs. It’s
cognizant 20-20 insights 2
3. not just high-mileage customers who should be be redefined to translate customer loyalty into
placed in the elite tier of the loyalty program; brand advocacy. To accomplish this, the focus
airlines need to make sure their most influen- needs to shift from one-time transactions, to
tial customers on social media — the customers interactions and engagements. Rewards and
who can increase brand image by sharing their incentive programs, there-
positive experiences — are also categorized in the fore, need to be designed Social loyalty is a
top tier of the loyalty program and rewarded with to act as catalysts for
program by which
preferential and differentiated treatment. travelers to share more
and engage more with the an airline offers
To maximize the benefits of both their loyalty brand. loyalty rewards not
programs and their social media initiatives,
• Technology: By investing only in return for
airlines need to overlap the two so that customers
in technology enablers like the consumption of
can be rewarded for their social media activity
social media monitoring
and text analytics tools, goods or services but
(see Figure 2).
To enable social loyalty, successful organizations airlines can identify who is also for activities on
need to focus on the following components: talking about their brand social media.
and on which networks.
• Organizational structure: Most social media
Also, by deploying a
initiatives are undertaken by the sales and
location-based strategy, they can provide the
marketing business unit, which operates in a
rewards within the right context and at the
silo. A dedicated group needs to drive all social
right time. One enabler that should play a much
initiatives, working in a hub-and-spoke model
bigger role going forward is gamification. By
with other business units. This would ensure
applying game mechanics to the entire process
that the loyalty programs are designed with
of rewarding social activities and building
traditional loyalty rewards and incentives for
loyalty, airlines can take brand awareness
social media initiatives from the get-go and
to the next level. With game techniques,
that this strategy is embraced by each and
airlines can use extrinsic
every business unit across the organization.
motivators such as With game techniques,
• Culture: When multiple groups need to work miles or free tickets to
across business units, it’s important to foster influence customers to
airlines can use
a collaborative culture. Each group needs easy share more and more extrinsic motivators
access to information, requisite support (both about their experience such as miles or free
monetary and technological) and the respon- on social platforms. This
sibility and incentives to work in collaboration approach can also ensure
tickets to influence
with others. that the customer sees customers to share
• Loyalty programs: Traditional loyalty pro- real value in the rewards, more and more about
grams are designed to generate ever-increas- which would motivate
ing customer loyalty. However, this goal must him to share his positive
their experience on
experience with his peer social platforms.
community, potentially
Colliding Worlds triggering a viral effect. To encourage this kind
of behavior, airlines need to embed catalysts
into their social loyalty programs.
A Two-Pronged Approach
Social Loyalty
Going forward, airlines need to structure their
Social CRM Loyalty
social and traditional loyalty programs in a way
Initiatives Programs that maximizes the benefits of both initiatives.
Not only do they need to be able to identify the
high-fliers who consume their services; they also
need to engage with influencers who can become
brand ambassadors, enhancing the airline’s brand
image by sharing positive experiences with their
Figure 2 peers worldwide.
cognizant 20-20 insights 3
