Incentivising members with the world’s best experiences
More availability, more choice and easier than ever before – the reward options with Avios are growing in all directions for members. We caught up with our Head of Pricing, Glenn Commerford, to find out what his team is doing to make our programmes as valuable as possible for our members and keep them front of mind.
“When creating rewards that matter,” Commerford explains, “There are two key factors we think about: how easy are they to use and how relevant are they to members’ needs. When we then start to layer on transactional data and the feedback we are getting in other channels too, the picture then becomes quite clear, and we can see what will resonate best with our base.”
Making rewards easy
In 2021, with a rapidly expanding member base, and the increased demand for rewards that came with it, we were hearing the feedback that members wanted us to make it easier to spend their Avios and that more availability was needed.
In May of that year, we responded on a never-seen-before scale, as we doubled the number of guaranteed Reward Seats available that British Airways Executive Club and Iberia Plus members can book on each flight. It was one of the biggest and most significant launches in IAG Loyalty’s history, with more than one million additional Reward Seats opened up across the networks overnight.
"It was the first of its kind in the industry," Commerford explains, “And it wasn’t long before we saw other businesses and their loyalty programmes following suit.”
In April 2023, we took this approach to a whole new level and made it so every seat on select flights could only be booked with Avios. We chose in-demand destinations like BA’s new route to Sharm El-Sheikh, or flights to Geneva during the February half term in 2024, a high demand time for the ski season, with more destinations to be announced soon.
Commerford adds, “We saw fantastic results straight away with Avios-Only flights; the first flight sold out in less than three hours. Rewards offers like these are core to our strategy to making members feel special.”
Members are savvier than ever
Consumers have to be smart about getting the most out of their money, and – as shown by our research – never more so than now. With this, we have seen customers become even savvier with how they leverage their loyalty points.
“Our members have always had some fantastic opportunities to save cash, but we wanted to take that further. Enhancing our Reward Flight Saver (RFS) product was a major step in this direction. It means that, when flying to and from Europe, members no longer face variable taxes, fees and charges when booking their short-haul flights*, instead they now know that they will just find one very small flat fee of £1 plus Avios."
“As well as being a simpler reward option for members,” explains Commerford, “It also means we can be much more competitive and are more likely to keep our members buying with IAG’s airlines. And for a flight to include a bag at £1 + Avios, it’s a price that even low-cost carriers can’t compete with.”
We have seen customers become even savvier with how they leverage their loyalty points.
In December 2022, we took this further as we opened up RFS to all long-haul routes for UK and US members. Members now have twice the number of long-haul destinations to choose from when booking a Reward Seat and can also book Club World and World Traveller Plus to upgrade their experience.
Commerford adds, “Members can go to more destinations for less cash. We’re constantly looking for opportunities in our programmes and pushing the boundaries of what that can look like. The recent launch with British Airways Holidays is more proof of this.”
The launch he is referring to is that members can now part-pay for their entire holiday with Avios. For some, that means they can now achieve that ‘bucket list’ holiday with the currency.
“We saw immediate results. On the first day we saw that the average spend when the holiday was purchased with Avios was 11% higher on average than when Executive Club members didn’t use Avios in their transaction, and 26% higher than non-members.
“What we are now seeing is that with this new reward option, members can now use the cash that they would have spent to upgrade their experience and get even more value out of their trip. It’s great to see so soon after launch and is something we will be watching closely.”
Choice is key
Away from travel and we have launched even more ways to spend Avios. Our partnership with Sainsbury’s and Nectar enables members to put their Avios towards their weekly shop. Hundreds of thousands of members have linked their accounts.
In a landmark announcement for IAGL, we launched an online wine delivery business, The Wine Flyer. With this, members can redeem (and collect!) on their favourite beverages from Moet to BrewDog.
As of late 2022, members of the British Airways Executive Club can donate Avios to a number of worthy causes through the BA Better World Community Fund. Tens of thousands of pounds have already been donated to more than 100 worthy causes, enabling members to use their Avios in a whole new way to support projects they care about. Iberia Plus members can also donate Avios to a range of humanitarian organisations.
Commerford adds, “Members experience a benefit every time they make a redemption, making them more motivated to collect again and engage more – this is where the lifecycle comes into its own as they will often then seek out more ways to collect Avios.
“By creating so many great choices for members to pick from, we are making it easier than ever for members to find the rewards that mean the most to them and keep engaging with the programmes.”
Step changes and tech changes
“We are always looking at how we can deliver value to the end customer faster.” Commerford explains, “Embracing Agile at the core of our business has enabled this, and ensured we have a relentless focus on members and what matters to them.”
Reward Seats and Avios-Only flights are examples of this in action, but they are not alone. American Express’ Companion Vouchers, enabling a cheaper second ticket for travellers, have had numerous enhancements, from providing access to additional Reward Seat availability in Club World for Premium Plus Cardholders, to members being able to redeem the vouchers on journeys that started outside the UK too, as well as booking on Iberia and Aer Lingus flights. And as of June 2022, we built in even more flexibility as solo travellers can now also use the vouchers to get a 50% discount on the Avios cost of their Reward Flight booking.
“We are always looking at how we can deliver value to the end customer faster.”
These iterations were released over an 18-month period with more to come. They have been crucial in driving up choice, usage, satisfaction, NPS scores and driving members around the loyalty lifecycle.
Head of Pricing, Glenn Commerford speaking at AI Mega in April 2023.
From a tech perspective, we’ve invested in a new rewards platform across car hire, hotels and experiences that is now live with Aer Lingus. As Commerford explains “By investing in this new platform we are enabling a smoother and more seamless redemption flow for our members, which in turn drives more growth for the programmes – it's a virtuous cycle. It’s an investment that builds on the core of the proposition and is set to create a lot of value.”
Looking ahead to the future, Commerford adds “Our ambitions continue to grow. We’re constantly looking at consumer trends and the market, to see how we can add value for our members. It is a proposition that we are only making more enticing, and we are always evolving.”
If you’ve not got a loyalty offering of your own in place yet, why not enter the world of loyalty with a ready-made solution like Avios? With over 1 Million Avios collected worldwide every 60 minutes, adopting Avios as your loyalty incentive is a surefire way to get ahead of the competition. Become an Avios collection partner today.
You can also join the list of thousands of businesses reaching new and large audiences with our Avios for merchants proposition. Whether that's enabling your customers to collect Avios when they shop online with you, or seamlessly collecting Avios with every in-store shop via their registered payment card. Learn more here.
* To be eligible for Reward Flight Saver, British Airways Executive Club members need to have collected at least one Avios in the past 12 months. More information is here.
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