It is no secret that the airline loyalty programs are part of the sales process when it comes to negotiating corporate contracts. Those conversations often involve granting status to top executives, even when they do not necessarily travel enough to rate that on their own. That might happen a bit less frequently going forward thanks to Altéa Corporate Recognition, a new technology option from technology provider Amadeus. Lufthansa and its Miles & More program are the launch partners for Altea Corporate Recognition. The arrangement allows the carrier to customize the benefits granted to corporate customers. It also integrates into the booking process, considering both the corporate status in addition to the more traditional loyalty program status as travel is booked.
Speaking at the Loyalty 2015 conference in Istanbul last week Stephan Bingemer, Lufthansa’s Project Lead Corporate Sales Tool Landscape, addressed this issue and talked to how the carrier is implementing the new system internally.
We do not want to give [the CEO] all the things he could earn via status….We want to give him the recognition for being the good corporate [customer]. But do we want to give him the recognition as if he has flown three years with us? No. So we have here clear complimentary separation. …
What we really need to do is bring together two worlds that are existing today: The pure travel experience that is very well managed through the frequent flyer program… [and] on the other side we need to take care of our B2B contracts.
This split, taking some key benefits like priority check-in or security access and differentiating them from additional mileage earning or upgrade certificates, it key to the new system and to Lufthansa’s offering. It means the ability to better target benefits and to give more in situations where the company wants to offer some recognition but not to simply give everyone at a company a Senator card. This is perhaps more important as the corporate contracts identify project team groups of other mid-level employees who are semi-regular travelers. These are the passengers which the new program is truly designed to benefit, and they are the customers which Lufthansa has historically shied away from granting status to. For the airline and loyalty program this new platform means not giving away more status or benefits than it chooses. Bingemer continues,
The question is what we want to have. Do we want to give status for free? We don’t think that this is the answer to the question. What we should do is give the recognition to the corporate [customer] according to the needs he has…he doesn’t need emotionalized travel. But we need to make the CEO recognized as he is part of our deal. You can’t give everyone status and you can’t give everyone all benefits; that needs to be clearly balanced and supported by data analysis. …
We would not tend to give away status for free. Status is something to be earned.
Another key benefit of the Altéa Corporate Recognition program is that it can offer the negotiated corporate benefits through the booking process even on indirect bookings, something which is important for corporate bookings. Custom bundles of benefits can be built such that during the booking process the system “automatically offer packages of tailored ancillary services which are focused wholly on corporate travellers’ needs, such as, baggage and preferential seat options.” Those “split” benefits can be fully integrated into the travel process from initial booking contact to the check-in counter at the airport to the baggage claim belt.
As for whether this is a good development, I suppose it depends on which side of the negotiations you’re on. For companies which previously negotiated elite status for more of their employees this could be seen as a downgrade. But if it helps the programs loosen the reins a little bit and grant benefits where they had not previously then this could be quite beneficial for everyone involved.
See more stories from the Loyalty 2015 conference here.
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Refreshing to hear something I have believed for a while, ie that status is most valuable to both parties when it has to be earned. The more you give it away the less valueable it becomes. United would do well to pay attention, judging by the legions of 1k’s on the upgrade lists these days.
Agreed, this is very interesting to hear – I’m curious what sort of recognition they come up with, apart from all the “recognition” that loyalty status is supposed to confer.
The philosophy is correct, but the implementation is going to be interesting.
The specifics suggested during the presentation were things like priority security, check-in and boarding but not bonus miles nor upgrades. At first blush it was basically soft benefits which have no real cost to them.
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