frequent flyer program (FFP) - definition
ICLP – the global loyalty marketing agency – is an expert in developing and managing Frequent Flyer Programs.
Frequent flyer programmes (programs) first appeared at the end of 1970s as a marketing strategy in response to deregulation. They originated in the United States, not appearing in Europe until about 15 years later. The key target of most European programmes is business travellers. Frequent flyer programs allow passengers to earn points or “air miles” each time they fly. Such points can later be redeemed in exchange for free flights or other benefits. These benefits are accrued in direct proportion to the amount spent, and as such are equivalent to a percentage price reduction.
Most frequent flyer programmes (programs) also incorporate strategic non-linear elements, mainly through the concept of introducing an "Elite" status level whereby additional benefits can be earned after the passenger reaches certain thresholds. This has the potential for the airline running the scheme to generate switching costs, because the passenger in the programme, if taking an alternative air service would lose not just the air miles naturally accrued, but any additional bonus points or air miles that go with being an elite –for example a "gold" or "platinum" card-holder.
To find out more about developing Frequent Flyer Programs and how ICLP can help your business, please visit ICLP-the global loyalty marketing agency.