Three ways selling miles is driving record-breaking growth for airlines
Over the past couple of decades, airline reward programs have made significant strides in shifting their reputation from cost centers to profit engines for their parent companies. As the effectiveness of these programs grew, so did member appetite for points and miles. So much so that loyalty currency retailing—the sale of points and miles directly to members—now ranks as the second largest revenue driver for most loyalty programs globally.
Who knew selling points and miles packed such a punch? Here’s three reasons why mileage retailing is a key factor in building a profitable loyalty program:
1. Members who buy miles are more valuable
Members who buy points and miles will go on to fly more and engage more within their program lifetime—taking up to five times more revenue flights over the following 12-month period, and redeeming 6-10 times more points than non-purchasers.1 For cobrand card members, their card spend also increases by 37 percent in the three months post-purchase.
2. Mileage sales bolstered airlines and hotels during the pandemic
When travel came to a standstill during the global pandemic, loyalty programs became a crucial touchpoint for airlines to maintain member engagement and brand relevance.
Even without immediate travel plans, members were buying miles, highlighting that mileage sales are more than just a needs-based activity. The desire to travel is an insatiable itch, and members want to have the points and miles they need to travel better, sooner, and with more perks. Data from Points, the world’s leading provider of loyalty solutions, revealed that some loyalty programs even experienced record-breaking points/mileage sales in the height of the pandemic.
3. Selling miles speeds up the member earn-burn cycle
Buying miles emboldens members to top up their balances on their own terms—decreasing the time between onboarding and redemption and speeding up the all-important earn-burn cycle which is critical to fostering lifetime loyalty. Highlighting this program utility with a data-led marketing strategy ensures mileage promotions are customized down to a member level in order to nudge them towards the next step of their consumer journey all while maximizing mileage yield.
1Aggregated Points data
Article by Points
