Scandinavian Airlines (SAS) wants to drastically boost membership in its loyalty program, a move that will necessitate going well beyond its typical geographic and demographic boundaries.
"We have to get out of our own backyard," says Magdalena Rohdin Hurtig, who is responsible for rewards concepts for EuroBonus, SAS' rewards program.
The airline, which flies 27 million passengers to 136 destinations each year, has hired RewardsPay to enable participants in EuroBonus to redeem their points for goods and services at third-party merchant websites. "By getting on external websites, we can reach and recruit new members. When people see they can use the bonus points at external sites, they will sign up," Rohdin Hurtig says.
The airline has set a goal of serving 5 million people through its loyalty program within the next two years, up from its current level of 3 million. Providing access to its loyalty programs on e-commerce sites allows people who travel less frequently to make better use of the program. Consumers can also earn points by making certain purchases at third-party merchants.
"Today, the membership doesn't have to be a frequent traveler, it can be a consumer who travels every now and then, and can collect points in other venues," Rohdin Hurtig says.
Consumers select the RewardsPay payment button on the checkout page of a merchant's website, or browse thought the EuroBonus rewards portal for participating merchants. EuroBonus members can decide how much of the payment to make with points.
RewardsPay recently added online merchants Boozt.com and Smartbox to its list of partners. Other participating merchants include iTunes, Facebook, World Golf Tour, Livemocha, and Runescapea mix of retailers covering apparel, shoes, gifts, music, movies, books and games. The airline is also working with electricity and insurance companies. "We are finding opportunities to add rewards for everyday spending, so we can expand the ways consumers can earn points," Rohdin Hurtig says.
Boozt.com, a fashion retailer, can help the airline appeal to men between the ages of 35 and 45, Rohdin Hurtig says.
RewardsPay will monitor transactions to track redemptions, and help manage the program. Its network will help SAS reach new geographies by making the program more appealing to foreign citizens.
"For members in New York, Chicago, Washington and San Francisco who travel to Scandinavia, it may not be as easy to redeem points," Rohdin Hurtig says. "This is a good way for us to reach out to them."
The relationships between airlines and rewards can be lucrative for the carrier and payments companyAmerican Airlines, for example, emphasized maintaining its affinity card relationship with Citigroup as part of its bankruptcy plan. And United Airlines recently debuted its MileagePlus small business network, an expansion of United's earlier program, enabling small business to earn rewards miles by spending at the program's vendor partners.
For cross-marketing programs like this to be effective, there really needs to be some kind of substantive connection between the airline and the retailer, says Phil Philliou, a payments consultant, in an email.
"The brands need to somehow be synergistic. The rationale for this program is that the more cardholders transact with your cobranded card and redeem points, the more relevant your program is. It is another way to keep your card top of wallet, top of mind," Philliou says.