3 In what ways do you think suppliers could benefit from loyalty card schemes? Customer retention and loyalty are prizes worth having in many sectors, and no more so than in supermarket retailing and in the airline business. Neither of them just want one-off customers, but those who come back again and again. Sales promotion has an important role to play in encouraging greater loyalty and repeat business by providing an ongoing incentive to return.

Frequent flyer miles are one of the airlines’ most important marketing weapons and most airlines have schemes whereby miles mean points, and points mean free miles and upgrades. Although the discount airlines such as easyJet and Ryanair have shunned loyalty schemes by letting the regular price do the talking, most of the larger carriers have their frequent flyer clubs such as BA’s Executive Club with three grades of membership, and Singapore Airlines with its Kris flyer scheme.

Frequent flyer schemes took off in 1981 when American Airlines introduced the first mileage-based loyalty scheme AA Advantage. Now 120 million people belong to the various airline schemes, and there is one individual account holder who actually possesses 23 million miles (Clark, 2005a)! Ironically the more miles you accumulate, the less likely you are to want to redeem them, as the prospect of a further long-haul trip may not be that appealing! A standard BA account holder needs to make two economy flights to New York to earn a free one-way flight to Paris.