It was a family member’s birthday the other day and to celebrate, invitations were sent to a virtual cooking course with a top chef. Everyone had a great time and for a little while at least, the family were able to reconnect and discuss something other than vaccines, masks and all things Covid related.

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All in all, a fantastic experience.

A redemption experience a frequent flyer program could easily facilitate with great flow on brand and financial benefits. 

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The next day, I came across this… Bain’s latest forecast for the resumption of air travel

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https://www.bain.com/insights/air-travel-forecast-when-will-airlines-recover-from-covid-19-interactive

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Sobering.

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Maybe, it’s because I have spent most of my career looking at customer engagement strategies including frequent flyer programs (or maybe because I’m just a bit odd) – but my mind wandered to… breakage.

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For those less acquainted with loyalty program management, breakage is what happens when the member's earned loyalty currency expires rather than being redeemed for a reward. As a member it is universally bad, but for a program operator, in the short term at least, it is highly profitable.

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Whilst expiry rules will vary by program, operators will (or should) be keeping a very close eye on this critical metric as it is one of the more telling indicators of the health of the program.

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With “normal” travel being pushed further and further into the future and consequently the great bulk of redemption of points being deferred, FFPs need to be focusing on maintaining those customer relationships or risk breakage (disengagement) escalating rapidly.

The tricky bit however, is they also need to balance the inevitable howls for cash preservation and new 3rd party (credit card) revenue.

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Given my inbox is full of the usual offers of poorly valued non-air rewards, operators apparently are still willing to take that risk to maintain their margins.

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Hopefully, for their sake, the emails promoting competitively priced fabulous and memorable virtual chef experiences, are coming soon.