How Southwest Is Scoring Big With Its Loyalty Program
This article is part of CMO.com’s Industry Spotlight 2019 collection. Click here for more.
Southwest Airlines has found the key to driving deeper customer engagement with its loyalty program: simplicity.
Jonathan Clarkson, Southwest’s managing director of loyalty, partnerships, and products, is leading the charge. Clarkson has been with the company since 2007. Before that he held marketing positions at Pepsico, Pizza Hut, and Dr Pepper/Seven Up.
Read on for how he’s helping the airline stand out in a highly competitive industry.
1. What is one marketing topic that is most important to you as an innovator?
Differentiation. Loyalty programs serve as a powerful differentiator for competitive industries like airlines. At Southwest, we are able to differentiate our product in many ways, such as Bags Fly Free, no change fees, and through our Rapid Rewards loyalty program. Customers often tell us, whether traveling for business or leisure, that Rapid Rewards is a driving reason for choosing Southwest, often when the other factors their consideration set are relatively comparable.
2. Why is this so important?
This is important because in the airline industry, price and schedule are often established in response to competition, and depending on the city a person is traveling to may mirror that of the competitor closely. A few years ago, we decided to revamp our program to make it more relevant to a broader base of travelers. By creating lower/more flexible redemption thresholds and making every seat a reward seat, we built a version of Rapid Rewards that was useful not only to our core customers, but for many who had not used us in the past.
3. What makes for a good customer experience?
Flexibility resonates strongly with our loyalty program members. Ease of redemption is one way.There are no blackout dates when seats are unavailable, and a customer can shop in dollars or points on our website and mobile.
Overall, features like these bring an element of ease to a process that many customers associate with friction and confusion, leading to higher engagement. Through regular surveys, we measure program value internally, a diagnostic which characterizes our customers’ overall experience. The score a customer gives us is often indicative not only of their feeling toward the Rapid Rewards program, but also the Southwest brand. We often find that our initiatives designed to remove friction have the most positive impact on program value ratings.
4. How does this improve the effectiveness of your marketing efforts?
Simply put, a truly differentiated program makes it more fun to talk to customers about, and that comes through in marketing. We use a fun, familiar tonality and message in our marketing of the program, which communicates the personality of the Rapid Rewards program as a sub-brand of Southwest Airlines. Also, by marketing in an increasingly personalized way to engaged members, our marketing ROI improves because we are speaking with the right message to the customers who, based on their experience with us, are most likely to want to take advantage of it.
Bonus: What do you do outside of work?
For many people in the travel business, myself included, the fact that we work in it every day only increases our desire to hop on a plane and get out to see the world. My best moments outside of work are when I’m traveling with my family, domestically and abroad, and getting to see new places and recording new memories. That simply never gets old.