For many frequent travelers in the US market loyalty is increasingly focused on opportunities in the cobranded marketing space. Partners – especially financial institutions – are the key to big earning opportunities. In the Brazilian market that effect is even greater. Essentially credit card is a rewards card with the ability to transfer points into any of the local carriers. That presents both advantages and challenges for those airlines as they work to build brand loyalty and draw customers into the fold.
A couple months ago I caught up with Azul’s Head of Loyalty Alex Malfitani on the challenges TudoAzul faces on this front. He spoke about the successes Azul and TudoAzul have achieved and also some of the failures. Or perhaps successes which have not yet been figured out.
Among the more interesting points which I found interesting…
On co-branded credit cards
[The CC] has a ton of nice benefits and we wanted to make it a rich proposition but one thing that I think is innovative – and we took a little bit of risk in trying it out – is a 10% discount on any Azul fare… Because of our size and our positioning we were able to try it out. We were able to structure the card in a way that it doesn’t really cost us all 10%; there’s a lot of benefit that we get out of it that helps us fund the discount. But it also provides a nice benefit for our loyal customer, a customer willing to issue a credit card with Azul.
Beating the local banks is an uphill battle:
We have to make the co-brand proposition rich because the problem is if you have just a regular, plain, non-cobranded credit card you can actually transfer your miles to any program. The co-branded is a bit of a challenge because if you keep your regular bank card you have the option of choosing any airline. If you commit with a cobranded you’re really committing. So we really want to make the proposition rich enough so that people feel comfortable about making that commitment up front rather than “playing the field” and keeping their options open.
Winning the business traveler (60% of the loads lately) is a major focus for the airline, the loyalty program and the co-brand efforts:
Because so much of our traveling public is flying for business convenience is key. Whatever makes the travel experience more friendly, more comfortable, faster, those are the types of benefits our customers really want and the things we’re trying to do…. The platinum version of the card gives you eight free transfers to the airport in a chauffeured car per year.
Azul has tried to win business from the newer passengers, those who may not have CCs and who likely have not flown before. This is one place where the company hasn’t quite solved the problem, but it is still trying.
We’re trying different ways of enabling people who don’t have a credit card but still have 100 Rials a month and still want to travel. How do we sell a ticket to them? And 90% of our bookings are online so how do do that on an e-commerce platform without a credit card. We’ve tried different things. We tried checks and banks slips but nothing has become popular. Nothing has been convenient enough for the customer to adopt it but we’ll keep trying.
See more of my industry interviews with LoadFactor here.
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Portuguese, not Spanish. Tudo, not todo.
Sherman, set the Way Back Machine.
I wouldn’t say that credit cards are such an earning opportunity in Brazil when compared to the US… The best sign up deal you can get here is something like 10.000 miles on Gol. Compare that to 50.000 UA miles! And Gol miles are much less valuable than UA. On top of that, you can rarely have the yearly fee waived, and they tend to be expensive.
Really, there’s no market in the world with such “free” miles like the US. 🙁
They’re not as “free” with sign up bonuses, but it is still a massive portion of how the earning in Brazil happens, far more than in most other regions of the world. The US market is very much an outlier, not the norm.
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