What the airlines can (must) learn from hotels

In the current issue of Colloquy, a newsletter for loyalty marketing executives, the chief of Hilton's HHonors frequent-stay program, Adam Burke, weighs in on the awards side of travel-rewards programs. His message is one that so far has been mostly lost on, or ignored by, his counterparts in the airline industry.

In "The Moment of Truth," Burke argues that loyalty programs live or die according to their success or failure in meeting the expectations of members when they finally redeem their points for awards.

According to Burke, "The customer's experience in claiming your offered reward will either entice them to reinvest in your program because you delivered on your promise, or drive them away if, instead, you delivered a bad experience. At this point, either you cement the loyalty of your best customers, or expose them to your competitors."

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If this seems blindingly obvious to the average consumer, making award redemption a truly rewarding experience for members of airline programs has proved to be a daunting challenge, unmet by most program operators.

Burke's conclusion, and advice I hereby pass on to the airlines: "The redemption experience is one of the crucial moments when the customer gives you a chance to make a real connection. Seize that moment."

Incidentally, if "The Moment of Truth" sounds vaguely familiar, it's probably due to its presumably intended similarity to a 1987 book, Moments of Truth, in which Jan Carlzon describes the management principles underlying his successful reinvigoration of Scandinavian Airlines System (SAS). A moment of truth in Carlzon's view is simply an interaction between a customer and the airline's personnel, whether it be in regard to sales, ticketing, in-flight service, or the handling of lost baggage complaints.

Carlzon's book was widely read and discussed by airline managers in the late 80s. Its message—that business success and customer focus went hand in hand—was perhaps a casualty of the bruising operating environment of the post-9/11 period. For whatever reasons, it's a theory too rarely practiced.

As is Burke's.

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