Loyalty Truth

There are many paths to creating customer loyalty. The models range from promotional (Groupon) to payment based (cobrand cards)  to category alliances (gas/grocery) to solus programs (Macy’s, Amex) to coalition programs (Aeroplan, Nectar).

There are alternate loyalty models based on service, brand, product innovation, or even communication style. Zappos, RedBull, Apple, and Carrabbas’s are examples respectively of those cherished customer loyalty foundations. As you can tell from the list, a select few brands are able to leverage service or product innovation as the driver of their loyalty efforts.

You may not realize it, but there are even price-based models that constitute a loyalty program. Walmart, despite common perception that it eschews the impact of customer loyalty programs, has its own take on loyalty. It’s called “everyday low pricing”. Though Walmart may never have a points based loyalty program, they do have a well executed customer strategy.

Virgin America represents a company with a unique blend of attributes able to be leveraged to drive customer loyalty. They have a frequent flyer program, Elevate, which is nearing its 5 year anniversary. They also have a unique brand that seeks to engage a certain type of traveler (more hip, casual, fun?), and deliver an in-cabin customer experience breaks from the pack of competitors, whether legacy or discount carriers.

On the eve of the 5th anniversary of Elevate, Virgin has announced several significant program enhancements and is grabbing attention with its promotion to offer its top frequent flyer a ticket on Virgin Galactic, the space travel arm of the Virgin empire. The Elevate member who accumulates the most status points between August 8, 2012 and August 7, 2013, will be awarded a seat for sub-orbital space travel on Virgin Galactic, valued at approximately $200,000. That’s a whopper of an aspirational reward in anyone’s book.

Virgin has taken early steps towards Social Loyalty as it teamed up with Topguest in 2010, offering travelers the ability to do a virtual location based check-in to earn frequent flyer points.

All of this taken together adds up to innovative and forward thinking efforts applied to a traditional frequent flyer structure and the result is that Elevate stands out from competing programs. To complement the tangible benefits of Elevate, Virgin offers an in-cabin experience that is also unique.

I had the opportunity to fly Virgin America for the first time recently and the lighting, seat back drink and food ordering, and persona of the flight attendants made an impression right away. The mood was light and gave the impression that the journey was supposed to fun, not just militaristic in compliance with FAA regulations. The experience was a pleasant contrast to others I have had recently and the only thing missing with the cabin experience at Virgin is that reality that seats in Main Cabin are just too darned close if you’re in the vicinity of six foot tall.

Linking back to the discussion of loyalty models, Virgin America is unique in that it combines a distinct brand, stellar service, and product innovation with the essential elements of loyalty – reward and recognition.