Loyalty takes flight - Air Berlin interview

The Air Berlin topbonus frequent flyer program (FFP) boasts over 2 million members.  With roots back to 1978, the airline started flying in 1992 with two jets and 150 employees. By 2003, the company was the second largest airline in Germany and today the airline serves 154 destinations throughout the world. 

It has also earned its share of awards.  Recently it won the 2010 Loyalty Innovation Award voted by key airline loyalty professionals and also the "Business Travel Award 2010" for "Best Short-Haul Airline". 

Johannes Ganser, Head of Loyalty & Partnerships for Air Berlin shares his thoughts with us on the reasons behind the continued success of their loyalty programme and also some of the future challenges they face.

1.      The Air Berlin topbonus Program was merged with the TuiFly blue miles programme in 2009 - how did you approach this and what was the outcome?

The blue miles programme was integrated at the end of October 2009 and we have allowed blue miles members a period of 6 months until April 2010 to transfer theirblue milesstatus and reward miles into our existingtopbonus Program.  Where customers were members of both programmes, their accounts were aggregated and if the new miles balance entitled them to the next tier level, the member was automatically upgraded.  The integration created a new customer segment in thetopbonus Program, which currently has over 2 million members.

1. 2.      The "My Route" initiative was recently recognized with a Loyalty Innovation Award, what was the reason behind launching My Route and what has been the result?

In 2008, ICLP supported Air Berlin in the relaunch of the topbonus Program. By analysing our customer data we identified that many customers followed a regular travel pattern using the same departure and arrival airports. The key insight from our analysis was that these customers were potentially more price sensitive than others on competitive routes. We had to find a way of differentiating our product to support our existing members in maintaining their status, and minimising their churn rate, thus increasing the loyalty of these business travelers and commuters. The My Route programme offered members to select a primary route, for which they would be rewarded by receiving double miles every time they flew.  The result was that a large percentage of upper tier members have selected their preferred route since the launch in August 2009. The flying frequency of members who have chosen My Route has risen compared to those members who have not activated My Route, and in addition the return flight rate increased since the launch of the initiative.  

1. 3.      Have you noticed any interesting member trends or behaviour over the past year that you can share? How are you using these insights to develop topbonus?

In March this year Air Berlin introduced Business points - a program for small and medium-sized companies which allows the company to benefit from the miles earned on business trips to be taken by an employee. We also adapted our product offering for the business traveler which has helped secure more corporate deals than the market average by catering for their needs and delivering a high quality service at reasonable prices.  Air Berlin has grown significantly over the past few years and we have to stay very flexible and continually adapt thetopbonusProgramto market and customer trends. As a result of this we refreshed topbonus a year ago to introduce many new features to the programme.

1. 4.      What are the main challenges you see ahead for Air Berlin in 2010, and in particular with respect to customer loyalty?  

With loyalty we want to increase the customer's bond with our brand, and to continue to differentiate ourselves through providing great service at the best price. One key focus in 2010 will also be to enhancing the offer to our gold tier members and also to improve the value proposition to our other segments to ensure they are relevant and personalised.

1. 5.      What are the key developments that you think will impact the airline industry in the next year?

An ongoing challenge is to accommodate all target segments under one programme. Redemptions are popular during an economic downturn but we need to consider how this will be impacted when the markets improve.  A frequent flyer programme should be a true loyalty programme and especially serve the status of the most important members.