At first glance, loyalty may seem like a bit of an odd thing for an airline to focus attention on during a pandemic. With air travel down by more than 95%, you might think airlines would be more concerned with getting people into seats rather than rewarding them for it.
The reality is that airline loyalty, even during the pandemic, is more important than it has ever been. An airline’s entire reputation can often lie with its loyalty offerings. If that program becomes more accessible and relevant, it makes the bounceback that much easier. So when a company like Air Canada launches a completely revamped digitally-focused Aeroplan Rewards Program 10 months into a pandemic, the timing isn’t off at all—in fact, it right on schedule.
Getting off the ground
Across the retail sector, a strong rewards program is punctuated by its ability to be delivered as a compelling and functional digital experience, along with the levels of recognition and personalization it offers along the way. But for retailers, loyalty isn’t exactly an absolute influencing factor. Things are different in air travel.
First, a bit of context. Aeroplan has been on a turbulent three-year trajectory, which is actually what forced Air Canada to rethink its digital roadmap and really scrutinize how customers interact with their brand.
“Digital customer experience was among the biggest motivators of the overall digital transformation journey we’ve been on for several years now,” says Derek Whitworth, senior director of loyalty products for Air Canada.
“Digital customer experience was among the biggest motivators of our overall digital transformation journey.”Derek Whitworth, senior director of loyalty products, Air Canada
Here’s a quick breakdown of the most important moments on the Aeroplan and Air Canada timeline:
- 1984: Air Canada introduces the Aeroplan frequent fliers loyalty program. It grows quickly and becomes a leading Canadian loyalty program,
- 2002: Air Canada decides to spin Aeroplan off into a subsidiary.
- 2005: Air Canada sells 12.5% of the company in an IPO, creating the world’s first publicly-traded loyalty program.
- 2008: Air Canada fully divests its remaining holdings of Aeroplan, meaning the rewards program is no longer under the direct control of the airline.
- 2017: Air Canada announces it will not renew its partnership with Aeroplan and instead launch its own rewards program.
“One of the main drivers of canceling the Aeroplan partnership was the program’s inability to holistically manage the member experience,” says Whitworth. “People would interact with Aeroplan, then have to switch back to Air Canada, then go back to Aeroplan, and it often didn’t make sense.”
When Air Canada divested its Aeroplan holdings in 2008, the impact a poor digital experience could have on a brand was not nearly as strong. Now, 12 years later, the airline’s digital team knew everything had to exist under one roof.
“The old partnership offered disparate experiences, and from a digital customer experience point of view, the relationship between Air Canada and Aeroplan was just not clear,” adds Pritesh Gandhi, senior director of e-commerce and digital channels for Air Canada.
A year later in 2018, Air Canada purchased Aeroplan back, realizing it had become one of the popular loyalty programs in the country. Plans began immediately to relaunch it within two years, and by mid-2020, Air Canada unveiled plans for the new Aeroplan program, and this time it would be optimized for the digital audience.
Air Canada leveraged input from over 35,000 consumers and employees to rebuild the airline’s technology infrastructure and allow it to focus on the digital customer experience.
“Fundamentally, what’s different now is Aeroplan is embedded within the overall Air Canada digital experience,” says Simon Rucker, an associate partner with IBM iX who worked with Air Canada on the project. “There’s now a huge opportunity for point-to-point integration between loyalty and everything else Air Canada does.
“Now, right off the Air Canada homepage, if a customer wants to book a ticket using rewards, they’ll see the same experience as if they were using cash,” adds Whitworth. “It’s the same look and feel, and searches return the same results. There’s no disconnect.”
Every seat on every Air Canada flight is available for rewards redemption, without any cash surcharges. New partners have been added to help increase earning power, and new tools like the Points Predictor offer estimated ranges that members will need for their flight rewards.
“With this transformed program, we’ve been able to overhaul our backend technology infrastructure, allowing us to have this unified digital experience and then build on top of that,” says Gandhi. “We now have that ability to self-serve and deliver on all the promises we’ve made.”
“With this transformed program we’ve been able to overhaul our technology infrastructure and have this unified digital experience.”Pritesh Gandhi, senior director of e-commerce and digital channels, Air Canada
These new features share a common theme of simplicity. They let Aeroplan members do what they want with their points, and show them the easiest way to do it. This is what the Air Canada digital team values as the gold standard of digital experiences.
Taking Aeroplan back under the Air Canada banner propelled the entire company to rewrite the way it treated the digital customer experience. The new north star became delivering a unified and transparent program, and that roadmap began influencing the airline’s entire digital presence.
“A lot of times people confuse amazing digital experiences with something being flashy,” says Gandhi. “People think of digital innovation and they think of brand new technology. To me, we always think of how to deliver a frictionless experience across multiple channels while anticipating the needs of our customers. What we’ve been able to deliver is relevancy—that’s what we call it when we talk about personalization and the new contextual elements of Aeroplan.”
The impact of relevance in a digital rewards program is difficult to understate. By using real-time data and contextual information to deliver in-the-moment rewards, it creates a deeper relationship between the consumer and brand, and for airlines, that can mean a lifetime of business flights. This application of personalized rewards could never have happened without Air Canada’s new digital infrastructure, and now the notion of relevancy is completely rewriting the airline’s traditional loyalty norms.
There’s a term in the loyalty world used to describe many programs—”earn and burn.” Members do whatever they can to earn points, then flip them right away for the highest value item they can get their hands on. This used to be true for airline rewards programs, but the power of a strong digital experience and its ability to deliver relevant rewards is shifting the narrative.
“One thing that has recently been brought to light is that earn-and-burn is starting to not to matter as much compared to the recognition you can deliver based on a member’s level of engagement,” says Whitworth. “Digital channels are important to us because they create this ability for us to scale that sense of recognition with members.”
Whitworth explains that if Air Canada and Aeroplan can offer contextual information and rewards derived from member interactions, it creates a sense of recognition that far surpasses traditional status level programs.
“We always think of how to deliver a frictionless experience across multiple channels. What we’ve been able to deliver is relevancy.”Pritesh Gandhi
A big part of how the new Aeroplan program brings relevancy and recognition together are microtransactions. One thing every loyalty program operator knows is that member satisfaction is at its absolute highest when they redeem something for a reward. With that in mind, microtransactions let members spend small amounts of points on things like seat selection, in-flight wifi, upgrades, and more. Creating more opportunities to redeem offers a more holistic sense of recognition for a member.
“Digital is a critical enabler of these microtransactions because it’s the best way to deliver the offers and rewards in a contextual way based on where they are in their journey,” says Whitworth.
The impact of recognition and relevance goes even further when microtransactions are combined with real-time digital integration. Imagine boarding a plane and taking a seat, then hearing it pull back and start to taxi. After it leaves the gate, points would immediately be deposited into a member’s account. Then a relevant reward that offers in-flight wi-fi would pop up, creating a seamless experience where a passenger feels recognized for their loyalty and then turns that loyalty into a positive benefit.
Whitworth and Gandhi admit that this particular implementation might be ambitious right now, but the shift from earn-and-burn to recognition and relevance is still very real. An integration that may be closer to going live involves letting members better understand their status through a more transparent approach to rewards benefits.
“A big thing is customers aspiring to get to the next status, so that’s how we can use relevance to make it important,” says Gandhi. “If someone gets on a plane and they push off, they will get points automatically and see their status rise. Pushing that information to them in a contextual way is so much more important than just having it on the site.”
Air Canada’s new bread and butter
The digital relaunch of Aeroplan also let Air Canada focus on normal travelers—that is to say, not just the super elites that usually make up the lion’s share of frequent fliers. Other new features in the newly-updated program include the ability to share points between family members, as well as earn points from new relevant partners like Uber Eats. And because the most-frequent of fliers are grounded right now due to the pandemic, connecting with normal travelers through the new loyalty program has become a huge value proposition.
“Creating that stickiness with less-frequent flyer members, that’s actually becoming Air Canada’s bread and butter,” says Whitworth. “Our loyalty program is a critical asset to engage with those customers and inspire them to pick Air Canada first because we have that contextual digital experience.”
“The amazing digital experience and everyday relevancy wasn’t as important before, but now through this pandemic, we can be relevant in everyday life,” adds Gandhi. “People who travel infrequently are getting a taste for what could be. Things like microtransactions allow a lot of people to bring rewards a bit more within reach, and they can do it all digitally. By being relevant, we unlock so much more for them.”
In 2018, Air Canada set out to rethink what it could do with loyalty and its newly-reacquired Aeroplan program. But almost three years later, in the heart of a pandemic, Air Canada’s loyalty goals set off a chain of events that forced it to value digital customer experience above all, and right now, that’s the only thing that matters.