Today, Let’s Talk Loyalty welcomes back an iconic airline brand that is long overdue a return visit to our show.
American Airlines first joined us in April 2020 to share how they were thinking about their loyal customers and the role of the AAdvantage program in those first early days of the Covid pandemic.
Now, three years on, we revisit this iconic program – which is in fact the longest-running computerised or travel loyalty program in the world.
AAdvantage was established in 1981 with a laser focus on rewarding frequent flyers on American Airlines.
Today, the program has more than 100 million members and has evolved dramatically.
AAdvantage no longer considers itself a frequent flyer program, but instead a travel rewards program, and now they are once again leading the industry, with new ways for members to earn and keep their status in return for any of their loyalty within the Advantage eco-system.!
To hear the full story, I’m thrilled to be joined today by Chris Isaac, Director of AAdvantage, to hear how Covid ironically created new insights for him and his team on just how loyal their members were being – even when they were unable to fly!
Listen to enjoy the latest insights from AAdvantage.
1) Chris Isaac, Director of AAdvantage
Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.
Did you know that Mastercard is one of the world’s largest loyalty service providers? Working with leading global brands across financial services, travel, retail, dining, fuel, and consumer goods, Mastercard designs loyalty strategies that build and sustain authentic personal relationships, their loyalty platforms, PowerPoints, cash back, and offers programs to deliver MasterCard’s priceless benefits and incentives in real time to your consumers.
Visit go.mastercard services.com/ltl to learn how Mastercard can help you build stronger relationships through smarter engagement.
Hello and welcome to today’s episode of Let’s Talk Loyalty.
Today, we welcome back a brand that is long overdue, a return visit to our show. American Airlines first joined us in April 2020 to share how they were thinking about their loyal customers and the role of the AAdvantage program in those first early days of the COVID Pandemic. Now, three years on, we revisit this iconic program. Which is in fact, the longest running travel loyalty program in the world.
AAdvantage was established in 1981 with a laser focus on rewarding frequent flyers on American Airlines. Today, the program has more than 100 million members, and of course, it has evolved dramatically. It no longer considers itself a frequent flyer program but instead a travel rewards program.
And now they’re once again leading the industry with new ways for members to earn and keep their status in return for any of their loyalty within the Advantage ecosystem. To hear the full story, I’m thrilled to be joined today by Chris Isaac, Director of AAdvantage, to hear how COVID ironically created new insights for him and his team.
On just how loyal their members were being even when they weren’t able to fly. Please enjoy the latest insights from AAdvantage.
So Chris Isaac, welcome to Let’s Talk Loyalty.
Chris:Thank you, Paula. Pleasure to be here.
Paula: It’s very exciting, Chris. I think the thing I’m most excited about is that you do have a mug from Let’s Talk Loyalty. So do you wanna show that?
Chris: Oh, I sure do. Yeah. So, funny story, Paula. I actually drink my coffee out of this mug every morning. So, even on a day that I’m not listening to one of your podcasts. Let’s Talk Loyalty is right there next to me. It’s sort of an inspiration to me. You know, we, my team and I, here in at American Advantage, try very hard to keep advantage top of mind with our members every day.
And, I think you’ve done that with me by making sure that there was a mug that I could have my coffee out of every morning. So.
Paula: Wonderful. Well, cheesy merchandise all the way, Chris. I’m delighted that it landed and, it’s doing the job it’s meant to do and then I’m there physically present in some ways.
So, listen, we’re gonna get into talking about advantage, Chris, and what I’m hearing coming through first and foremost is I suppose how proud you are of this program and that you’ve started to do things that actually, I don’t think any other airlines are doing. So it’s a great story to tell.
But before we get into talking about advantage, as you know, we always love to kind of pick our guests’ minds and get a sense as a loyalty professional, what kind of loyalty programs other than your own do you respect and admire?
So let’s kick off by asking you, what is your favorite loyalty program?
Chris: Yes. I’m glad you qualified that because of course, Advantage is my favorite, but beyond Advantage, I hope you’ll indulge me. I’m actually gonna give you two because they’re very different from one another, and I want to explain why they resonate with me and how they inspire me and my team to be the best that we can be when it comes to American Advantage.
So the first one is Chipotle, which is the fast food chain that has stores across the United States and Canada. And the UK. And what I love about Chipotle, it’s not just their food. I mean, I do love a good burrito. But I also love how their loyalty program focuses both on short term, immediate rewards as well as longer term earned rewards.
So, it feels like every time I think about lunch and I open my Chipotle app, you know, maybe I’m looking through various apps like, oh, where, what do I want to eat today? There’s always some, or it feels like there’s always some small little offer that just puts it over the edge and makes me choose Chipotle.
I mean, like who doesn’t love some free guacamole or a free bag of chips or a free drink? Right. Something that’s very small. And so that actually gets me in the door. Causes me to go spend money that I would not have otherwise spent with them. It, you know, I, I wouldn’t say it happens every time, but it happens enough times that makes me think about going to the restaurant or, you know, if nothing else, engaging within their app on a very regular basis.
But then on top of that, you know, they have the more typical points program. So when I spend, I earn points and I can redeem that for free food. So it’s pretty typical in that respect. But I think what they do really well is rewarding both, often through surprise and delight, and then also rewarding based on my engagement and activity. So, you know, fairly typical, but it’s a real life example of what drives loyalty for me.
Paula: Well, it’s changing your behavior, Chris. That’s what I’m hearing.
Chris: Yes. Yes.
Paula: Yes. Chipotle is a brand, first of all, took me ages to pronounce because I’ve never lived in a country that had a Chipotle, and I’m like, a chip. What? So I do think they have issues with that, which they’ve acknowledged in a really smart way, actually.
But yeah, the fact that actually you are going and checking for the offers, I think certainly in the US market, like I was actually just talking with McDonald’s the other day as well, about, I suppose, global similarities and differences. And it may be in other countries that those kind of like extra kind of freebies aren’t really expected maybe in the UK perhaps? But it certainly is for you clearly, and is driving you into the restaurant and changing your behavior.
Chris: It absolutely does. So there’s inspiration there. The second one that I would highlight to you is an online pet supply company that serves several states in the US. It’s called Chewy.
I’m not sure if you’re familiar with them. But, what sets Chewy apart is the way they do business. They just make it so easy to transact online. They make it easy to earn and use promotional credits from purchases. Above all, it just. I always feel like they put me first as a customer in everything that I deal with them in.
So you see it in their policies, you see it in their interactions. You know, you can sign up for subscription service to have pet supplies delivered on a regular basis. But they’re proactive in letting you know something’s coming in case you don’t need it. And you can easily delay a delivery, cancel something, or return, like they just make it like I’m in control. And that’s really nice.
And, I think these two companies embody two really important aspects of loyalty. I think it’s a common misconception in the loyalty world that loyalty equals loyalty program. And loyalty is both a program. It’s a tool. The program’s a tool. But being easy to do business with is just as important in fostering loyalty.
Paula: I agree.
Chris: And we’re so focused on that here at American as we think about how to have a convenient, consistent, connected experience with our customers. So those are my examples, that influence, the way I behave in my personal life as well as, you know, perhaps even inspiring us a little bit, here at American.
Paula: Incredible, incredible. And there’s three words there that you used. Convenient, consistent, and connected, which I’m definitely want to explore with you cause I can hear their very kind of core principles in terms of what you’re building with the Advantage program.
But just before we leave Chewy, I actually, again, I’m not in the United States, but what has struck me is, there’s been an extraordinary number of posts on LinkedIn, which is not typically a platform to talk about pets clearly. But what has I think amazed people is you know how the company has taken care of people when they’re grieving for a pet. And I don’t know if you’ve seen this.
And you know, I’m a pet parent quite recently and I haven’t had to deal with that, but you know, with the subscription model that they do have, you know, often, you know people have to call up and say, I’m sorry, but Fluffy’s no longer with us. Or whatever. And the reaction seems to consistently be that there’s a bouquet of flowers arrives out to that person. It’s not about the transaction and it’s not about, oh, grant, we’ll pick it up again if you get another pet.
It’s absolutely, you know, respectful of the devastation that that person’s going through. So, I’ve seen it posted, I’m gonna say like five or six times again on LinkedIn. So Chewy, if you’re listening, we’d love to have you on Let’s Talk Loyalty, because to your point, Chris, absolutely. Like, I didn’t wanna call this, this show, you know, Let’s Talk Loyalty programs because, you know, then we’d be bored. We’ve been talking about points the whole time. That’ll be no fun.
Chris: That’s right. That’s right. And what Chewy’s doing is so much more powerful than points. It’s really an amazing story.
Paula: It is, yeah. With a lot of integrity. So yeah. So, so well done to them. So listen, that gets us into your career, Chris. I suppose we should start with what I’m gonna call the magic moment when I think you fell in love with the whole industry, but actually as a child, which I think is quite remarkable. So, for anybody listening or watching today, Chris, will you tell the story about how you first connected with this idea of being a loyal customer or passenger?
Chris: Yeah. Absolutely. And it’s one, it’s one story that I love to tell because it’s so personal to me. And it, and it dates almost to the beginning of the AAdvantage program. So the AAdvantage Program was born in 1981. And my dad was one of the first members of the AAdvantage program in 1982.
And I remember being on a flight sitting next to him. And I remember some very specific details, like I could tell you where we were going. I can tell you the airplane, the type of airplane we were on. But what I really remember is he reached into the seat back pocket and pulled out the in-Flight magazine and.
And tore out a card and filled it out for me to sign me up as an AAdvantage member. You know, back then everything was done on paper. And so, when we landed, we dropped it into the mailbox. And a few weeks later, my AAdvantage membership arrived in the mail. And so I have been a member since December 5th, 1985. And that was my first experience, or the beginning of my lifelong relationship with American Airlines.
And so fast forward decades, and here I am sitting in this chair working in the AAdvantage program. And talking about, talking with my team about how do we foster lifelong relationships with our members. Just like it happened with me in that moment when my dad filled out that card for me.
So I feel like I’ve come a little bit full circle here. But, it you know, it’s very powerful for me, and I’ve lived it and I want others to experience how wonderful it’s been for me to be a member of the AAdvantage program all of these years.
Paula: That’s incredible, Chris. Thank you for that. Yeah. It’s very endearing to hear that your dad really believed in it himself so much and was obviously feeling that it was something he wanted his son to experience as well with all the joy that comes with it.
So I do, you know, have my own kind of light bulb moment, and I think in loyalty a lot of us do, where you kind of realize that this is a really lovely way to do business and to connect with brands and each other. So, that’s absolutely wonderful.
And then I know you’ve been incredibly loyal to American actually your whole career as well, Chris, we can’t, not comment.
Chris: That’s true.
Paula: So tell us how long you’ve been with the airline and some of the roles you’ve done before your loyalty that we’re gonna talk about today.
Chris: Yeah, you’re gonna age me with that question. I have been with American. In two weeks, I will actually celebrate my 25th anniversary.
Paula: Wow. Incredible.
Chris: So I have spent a very large chunk of my life here at American. And yes, I’ve been loyal to American, but American has also been loyal to me. I actually started in the revenue management group and spent probably half of my career within revenue management, doing various yield management and pricing jobs.
But, you know, American is a wonderful company and has many, many different opportunities, and I’ve used the last 25 years to really explore the company and get more and more experience across the airline. Even though I had a, had and have a very deep background and understanding of revenue management.
So I’ve spent time in marketing, in our onboard dining program a service recovery role, which really puts the customer at the center of everything. And making sure that, when we don’t deliver as we’re expected to deliver, we can make it up on the other side.
I’ve spent a little bit of time in American Airlines cargo. And then most recently, the Advantage Group, which is where I’ve been for the last two and a half years. So, yeah I have a pretty broad perspective on the airline as a whole.
Paula: And honestly, I mean, I’m ex British Airways, as you might know. I did five years with BA, I did a year with Emirates. And I think it gets into your blood. Like we used to say, certainly in British Airways, and again, this was back in kind of the late nineties. It was kind of like they, they put a chip in your brain like when you joined. Like that’s, that’s how excited we were to work there, you know? And of course.
Chris: I think it’s true.
Paula: It totally is. And it’s, just like it’s, it’s an extraordinary connection because it’s so inspiring. Like what you’re serving, you know, and the opportunity to travel and to help people share that beautiful experience and have that experience on board as well as, of course, in their destination. So, totally hearing that coming through as well, Chris.
So, before we move into the loyalty piece, then I confessed to you before we started recording that I was always a bit scared of the revenue management people when I worked in my various airline roles. Because it always felt like, honestly they really didn’t like us very much in the marketing side. Like because we were like giving seats away for free and there was this whole kind of constant battle in terms of justification.
So, I would love to hear, you know, now that you’ve kind of like gone from one side to the other, what is your perception of revenue management as a loyalty program owner and operator? And how does it all work in American?
Chris: Yeah. So it’s so interesting that you brought that up because, like I said, my first 12 years at American were within revenue management.
And at that time, I would completely agree with you. Revenue management and the loyalty program had goals that were very much at odds with each other. And so there were a lot of passionate debates. We, you know, having been on the revenue management side, I remember the days when the loyalty program was thought of as maybe a necessary evil.
We were, we had a very transactional mindset. And so when you have a transactional mindset, you do see a redemption, for example, as just giving away stuff for free or, a part of your product that maybe comes with status as given away for free.
But fast forward many years, and it may surprise you to hear that actually loyalty and revenue management are now in the same organization in American Airlines. So we report to the same senior vice president. And, we have made great strides in actually bringing the thinking together.
So revenue management has moved very much from a transactional view to more of a relationship view. And the loyalty program has adopted some of the thinking of revenue management, understanding what some of the constraints are. And so we work very well together in putting our loyalty program in front of our members.
But making sure that we’re doing it with the mindset that our members are investing in us. And in turn we invest back into them. So it’s a very different way of thinking. And, I love where we have evolved, having been on both sides. This collaborative relationship has really been amazing.
Paula: That’s incredible. Well, congratulations on being on the other side, Chris, because anytime I’ve asked anybody that they still say it’s work in progress. So you’ve obviously, I think the fact that you guys have been doing this for such a long time, you know, advantage is so well loved by its members and clearly the structural piece as well.
I think, you know, when I worked in, again, the corporate world, you know, we probably don’t realize when we’re in it, maybe, you know, especially at a junior level, that the fact that you’ve been, you know, sat beside somebody in a particular role, like there’s thinking that goes into that, that drives business behavior or of course the, as we said years ago, there can be challenges if you’re not aligned or maybe of the same team.
So, super progress and I’m glad that you are I think they call it what, poacher turned gamekeeper. You know, it’s like you’ve totally come to come to the dark side or the good side.
Chris: Yeah, exactly. We brought revenue management over the bright side. How about that?
Paula:Oh, there you go. See, we’re all on the right side now. Fantastic. So thank you for indulging me in that one.
So let’s get into AAdvantage, Chris. We had one of your colleagues on the show back in April, 2020. I was just looking at the dates and clearly that was a traumatic time for all of us. You know, personally, professionally, but particularly of course for an airline, at the time.
And there was some very inspiring stories that came through in that conversation about, you know, how the short term crisis was being managed. And here we are, you know, it’s three years later. And I’m so excited to hear about what you’ve been working on and thinking about.
Because what I gather is, is that kind of like opportunity of when the world kind of ground to a halt, you know, it did give you time to reflect and maybe think about better ways of doing things for AAdvantage members.
So tell us your perspective. Were you, when did you come into loyalty? Would’ve been maybe in the middle of the pandemic, was it from what I’m hearing?
Chris: Yeah, it was actually the summer of 2020. So April 2020 is an excellent starting point for this discussion because you know, we were humming along very well, just like every other airline up until that moment when the world shut down and it happened so quickly.
That you know, we were really in triage mode and I remember back in April of 2020. We were just trying to get our bearings. What does this world look like right now?
And we had no idea what the future would hold. We had no idea how long this was gonna last. We didn’t know how bad it, the whole situation was going to get, and you know, always hindsight is 2020. We can look back now and understand what the whole picture is. But at the time we were making decisions that we’re sort of in our, and our best interest at that moment.
But as the month started to go along and, like I mentioned, I joined the loyalty group in July of 2020. So, we had to adapt very quickly on, what did our program look like immediately, right now with, travel grinding to a halt. And we still have a status program that is very much flight based. People are not flying. What do we do about that? Do we just extend memberships? Do we like, what, what do we do?
And so we were making those types of decisions, but as, as the months continued, what we were realizing was the airline was in very, going through very difficult times. And yet, in advantage, we still had many, many, many members still supporting us in ways other than stepping foot on one of our airplanes. And so we were seeing this tremendous level of engagement.
And we started to realize, we have a program that is really built solely around flight. We allow earn through many different mechanisms much like any other airline. And we were seeing that really take hold.
We were seeing a lot of spend on our co-brand credit cards. We were seeing a lot of engagement in our AAdvantage e shopping portal. People were ordering food out from restaurants and participating in our AAdvantage dining program. And so we were seeing that engagement from day to day continue. But we were not rewarding these members with status.
Like how do we reinvest back into these members other than the long-term process of accruing miles and you know, re redeeming for a, a dream inspirational trip later? What were we doing for them right now?
And so that made us take a step back and say, if the world is truly changing, and that was a pivotal question at the time. Is the world gonna come back exactly the way it was? Or are we going to be forever operating in a different environment? Perhaps we need to make a change in the way that we approach how we reinvest back into our members.
Who are supporting us right now in very unexpected ways. And so, as we were looking at the data and we were realizing that yes, indeed, we do need to make a change.
The question became, what does that change look like? How do we take a program that, for all practical purposes, looks like any typical airline loyalty, frequent flyer status program and morph it into something greater. How do we turn it into a travel rewards program? Not just a frequent flyer program? And so we spent several months figuring out how we take qualifications for status.
And, you know, our method was much like you see with many airlines today where we had qualifying miles or segments and dollars, and it was very flight based. It was somewhat complicated. Those people that were part of it knew how to play the game. But it was not the game for the masses.
And, we said, how do we make it simple? And how do we lean into all of this activity that our members are doing now? And that led us from these three complicated flight metrics to a single metric that we call loyalty points. Which are earned along with the miles that you earn for any type of activity that you do within the AAdvantage program.
Paula: Amazing. And the key distinction then, if I’m following you correctly, Chris, is tier status was previously only available for people flying frequently and earning tier miles. But now what you’ve said is, the simplification piece is you are allowing all of that activity within your ecosystem, which I know is a great word, that you do love to use and that also can be used to elevate their, their tier status and give them that wonderful experience, you know, of, you know, achieving maybe the next level.
So I certainly, I recently got gold on Emirates, and honestly, the joy, I had no idea that, you know, I thought silver was good, but gold. Holy Lord. Here we go.
Chris: So you’ve seen the other side.
Paula: I totally, again, all on the, all on the bright side. So am I right In my understanding is that how this new simplification piece is working?
Chris: Absolutely. So now our members can earn status, whether it’s, through flight or through co-brand credit card spend, or e-shopping purchases, dining purchases, or combination of all of the above. So you have folks that are still the road warriors that are out there flying us all the time and they’re continuing to enjoy the benefits of status. The elevated experience.
But you also have people that maybe don’t step on airplanes, but, two or three times a year. But when they do, they are understanding that the relationship with American and the relationship with AAdvantage actually means something to us.
So we’re able to share that love much more broadly which we love and it’s been very engaging, not just for the members that we had. But for many members that are now joining the program.
Paula: I’m sure. And tell me internally then, once you had this, you know, obviously gigantic light bulb moment that, you know, as you said, we’ve got our road warriors, but we actually have our day-to-day warriors.
You know, if I kind of use that same language, there are people being loyal to our ecosystem that we really haven’t recognized or rewarded. So when you went out with that message that we need to give, you know, status recognition to people who may not be flying frequently, how did that kind of land with the executive team?
Chris: You know, I think if we had done that, two or three years earlier, it would’ve fallen flat. But the clarity that the COVID environment provided really allowed us to highlight what was going on and what was underlying without the noise of what we had focused on for so many years.
And the fact was, we were not thinking about or proposing that we take away that flight benefit. We still run an airline and we run an amazing airline. You know, with our partners though, you know. We definitely didn’t want to turn our back on that, but we wanted to make a bigger tent that more of our AAdvantage members were welcomed into.
You know, we believe at American, travel is better as an AAdvantage member. And when you earn status that experience is even elevated. So, it made complete sense to look at. And to start investing back into those that were, supporting us in maybe non-traditional ways.
So a little bit of a mindset shift for us internally. But I think it was much easier given the environment that we were in versus, maybe if we had tried to make this change a couple years earlier.
Paula: Absolutely. Absolutely. Yeah. No, you’re absolutely right. There’s certainly covid clarified an awful lot of things and the role of loyalty and really the underlying behaviors. Absolutely is obviously what came through for you. So that’s, that’s a, it’s a really amazing insight.
From an operational perspective then, Chris, so actually, how does it work? So just because you used the point simplicity, and it’s one of my favorite principles in terms of our industry and our programs, because I often think we’re very guilty of, you know, tripping ourselves up. Been tripping each other up with the, you know, how things work when they get to market.
So, so how did it work, or how does it work, first of all, operationally, just from a systems perspective and tracking, and then I’d love to hear about the kind of member experience as you made this transition.
Chris: Yeah. So it, it, we did a lot of investment upfront before we rolled out the new program, and we did it in conjunction with our new membership year. So our, we had time to develop the technology. We had to put a lot of thought into how are all of the systems going to work? But we moved away from these flight metrics and our systems now recognize any eligible mile as also eligible for a loyalty point.
So while our members are earning the currency that they can earn, they also earn loyalty points that track towards status. And that happens throughout the year. And with every membership year, it resets, back to the beginning and they continue to earn. So it’s, it’s pretty typical right now in terms of that membership year cycle.
But we sort of joke around now looking back that we had such a complicated program that if I were at one of my kids’ soccer games and I was trying to explain Elite qualifying miles segments and dollars to one of the other parents.
By the time I explained how all the various metrics worked and how they worked at different levels. Like something has happened on the field, I’ve lost the audience and my opportunity to actually be a good ambassador for American and for AAdvantage. But now the message is simple. It’s earn a mile.
Earn loyalty points. And those loyalty points lead to status. And, it really is that simple. Out in the operation now when we say operation, we think the actual airline, you know, at the airport when somebody’s checking in or moving towards, the gate and boarding and such.
There’s been a little bit of a transition for us there too. Because historically, those that were reaching our highest tier levels, say our executive platinum status level, probably knew the business as well as we did.
And so you didn’t really have to coach them. The conversations were very different with, say an executive platinum member, it was much more brief. It was just the facts, what you needed to know to get you on your way. And, we knew how to do that.
Well now we have executive platinum members that are not the road warriors. And so our frontline team members are also having to adjust a bit. Where perhaps we’ve got somebody that is getting that elevated level of care but they also need a little bit of instruction on how to get you know, from point A to point B. And so, it’s provided a lot of new opportunities for us, in terms of the way we interact with our members. And, it’s all been very exciting.
Paula: Oh, I can imagine. And the other group, as you were explaining that as well Chris, that I’m thinking must be equally delighted, are those partners as well within your ecosystem.
Because now all of a sudden, you know, you are actually driving behavior and loyalty, like on just like, just a transformational level for them in a way that, again, as you said, the currency piece has always been there, but this is like a whole other opportunity and where, you know, your example of the ballgame with the other parents, they probably can’t decide to fly more often just for the sake of keeping their status.
But what they can do is they can decide to, for example, you know, enjoy, you know, the dining experience you talked about, use the co-brand card. So I just think it puts more power and control in the individual and they have behaviors that they can change on a regular basis. And then your partners, I guess, must have been delighted to hear this coming through.
Chris: Yeah. Well, that’s exactly right. Like we are changing behavior. So instead of going direct, let’s take our advantage e shopping product, for example. Instead of going directly to a retailer, if you come through our portal, you earn miles. And that’s been the case. But now that added incentive of status has really changed behavior. We’re seeing a lot more engagement outside of the core airline, but with our partners and of course that’s good for everybody. That’s good for American, that’s good for our members. And it’s good for our partners. So it’s been a great thing that we’ve created here.
But, you know, most importantly, what we’ve done is given our members a way to keep advantage top of mind in ways that they’re already, things that they’re already doing today in their daily life. But now we’re a part of it. So that I think is what’s been so unique in opening up this world of status based on an entire ecosystem. Not just one element of what we have to offer.
Paula: Totally, totally. And then the members themselves, Chris, how have they reacted and responded? Because as you said, you guys have been running the AAdvantage program since 1981 and it’s been all about the miles and the sectors and the class of travel.
So moving, you know, the understanding I guess is something that I actually think is always a challenge, you know, for any loyalty program, even without such a dramatic transformation. So how have you been managing the comms and how’s it going down with the members?
Chris: Yeah, I mean, as you can imagine with a program, the size of AAdvantage and we have over a hundred million members in the AAdvantage program.
So, you know, you wanna talk about making a change on a large scale. You have to be very careful when you have a program the size of ours that the changes that you make are ones that you really intend to make. Because it is disruptive to not only our processes internally, and we have months lead time. Like we can adjust our systems.
But when you’re talking to a member that has been part of the program for 20, 30. We even have some that are from day one, 40 years plus with the program. And that program has been relatively stable over their entire engagement with you and it looks like everyone else’s.
It’s pretty easy to just sort of roll along and participate, like you’ve always participated. When you make a change as dramatic as ours, there’s a lot of education that has to go into it. So just like we had to educate ourselves and change our mindset all the way up to our senior leaders.
We had to do the same thing with our members. And in the beginning, you know, it was very difficult. People were used to engaging with a program. They understood how to play the old advantage game. Complicated as it was, they knew what they were in for.
Well we, when we embarked on this, we did a massive marketing effort. We’re still doing it because not only do we have the members that transitioned with us, but we’ve got new members and we’re so different. We’re charting our own course which I am so elated over like, that’s what’s so fun for us is we’re no longer seeing what airlines are doing in their program to inform what we do.
We look at our customers. And we look at our relationship with them. And we morph our program to that now. And so it’s very freeing. The simplicity that we’ve built into our program has provided so much flexibility for us to do things that, maybe we’ve wanted to do for many years, but really couldn’t in a program that was so focused on flight.
So, it’s all about the communication. It’s all about stepping people through the changes. And, what we’ve seen is great response. Like after the initial shock of what is this program all about now? What do I have to reorient myself to? Do we really try hard to keep our finger on the pulse of what our members are feeling, and we do it through, you know, direct interaction with our members. We monitor the blogs, we look at, you know, different chatter and social media and such. So we take all of that in.
One of the most exciting and gratifying comments that I saw was that Americans brought the fun back to airline loyalty programs. And you know, when we saw that, we knew we were really onto something. And we’ve been leaning into that ever since.
Paula: Oh my goodness. Yeah. And it should be fun and it clearly is fun for you, Chris. Both, both personally and you know, obviously as a business. So, so that’s really inspiring to see, and I’m guessing it won’t long before other airlines follow suit.
And I think in many ways that’s a sign of success as well when others start kind of going, actually that’s a really good idea. And, you know, they missed it.
Chris: I think they say that’s the greatest form of flattery, right?
Paula: You’re absolutely right, Chris. It totally is. So listen, with all of that said, I’m sure you’ve got plenty more up your sleeve. You probably can’t give too much away, but, clearly you’re not gonna sit back. Now, the job’s never done.
But how are you feeling about the future? You know, what are you thinking about in terms of AAdvantage’s? We’re coming now, I suppose, towards the second half of 2023. And thankfully, the pandemic is well behind us, but how are you feeling, and what’s AAdvantage thinking about?
Chris: Well, we’re only two or three months into our new membership year, but we’re already focused on what next year is going to look like. When we introduced the loyalty point, it actually gave us much more flexibility to reward our members beyond unlocking the AAdvantage Gold Experience or the Advantage Platinum, Platinum Pro, Executive Platinum experiences.
It gave us an opportunity to reward more often. And reward between our status levels and even before, a member hits AAdvantage Gold. So if you look at our program today, you will see rewarding levels all the way up through a journey starting at 15,000 miles and loyalty points that you earn with us.
So because we have that flexibility now, we’re not locked into just fork status tiers. We can reward all along the way. More of those, maybe even surprise and delight moments for our members. That is what has really started to resonate with our members. We get a lot of feedback on what we’re calling now, loyalty point rewards. So you earn all along your journey. And I think what you’ll see us doing in 2024 is further leaning into that structure.
Paula: Amazing. And I did find some fabulous, I suppose just an overview and nice graphic on your website as well, Chris. So we’ll make sure to link to that in the show notes because again, the audience listening to this show is, you know, very tuned into the detail and what the customer promises, the value proposition and all of that in real detail.
And I saw things like, you know, complimentary upgrades, which of course can never be guaranteed. But you know, if you’re suddenly gonna be able to say my behavior, you know, with this whole ecosystem, this AAdvantage way of being, might lead me to the occasional upgrade, complimentary. I mean, those sort of things are super powerful. So we’ll definitely make sure to link that in the show notes.
Paula: So yeah, that’s everything then I wanted to go through today. Chris, were there any other kind of words of wisdom or parting insights about advantage you wanna share before we wrap up?
Chris: I think that if we think about the trends that we’re seeing. And what I think you’ll see us doing a whole lot more of there’s a couple of angles that I think are really resonating with members today, and that is experiential rewards where we’re very focused on. What is the experience, not just when you’re traveling with us. And of course, that is something that we’re very focused on.
What does that advantage gold experience look like? What does that advantage executive platinum experience look like? And you’ve mentioned some of those, really great rewards that we have at those levels.
But leaning back into beyond just the core airline, what other types of things can we provide as an ecosystem and provide from a redemption perspective? And something that we’ve started to do this year in partnership with our very strong partner, Mastercard is their Priceless Rewards platform.
Paula: Love it.
Chris: MasterCard Priceless. You know, for those that may not be aware, there are these incredible experiences all around the world that Mastercard curates and we’ve been partners with them for a long time.
But starting this year, we actually have the ability to burn miles and redeem those priceless experiences. And so we’re gonna continue to invest in those types of things. So that, those experiences are not just when you’re flying, but maybe when you’re getting to a destination or maybe in your home city when you wanna have some luxury dining experience or a sporting event. So that’s one side of it.
The other that, I think is really top of mind for a lot of people is the sustainability aspect of airlines. That’s a very big topic right now. And it’s something that’s been part of our advantage program for years now.
We actually have, as you move up the loyalty point reward ladder, some of our levels allow a choice of carbon offsets. But we are doing a lot of investment in the sustainability space as an airline by 2030. We plan to replace at least 10% of our aviation fuel with sustainable aviation fuel. We have a goal to be net zero greenhouse gas emissions by 2050. We’re investing in technology for airplanes that will have low or zero carbon emissions in the future.
And so as we’re focused on that as an airline, that’s something that we want to incorporate more and more into our AAdvantage space. And, really, do something that’s important for the world, but also for the members that are coming into our program now. Because it’s something that is so important to them.
Paula: I love it.
Chris: So that I think is what we’re seeing is as the trend and where you’ll see us head a bit, going forward.
Paula: Amazing. Yeah, and it is a big ask, and I totally get it because on the one hand you want people to fly more frequently and everything, and at the same time, of course there’s ethical and moral responsibilities.
But at the end of the day, as a loyalty program, we’re here to connect the dots and make sure that, yeah, we address all of those things and still allow people to enjoy traveling as and when they do. So that’s wonderful to watch.
So I suppose all I will say is I hope you do stay in close contact with us here on the show. You are one of our very first guests that we’re recording in full video and want to say how magnificent you look there with your beautiful background.
Chris: Thank you.
Paula: You have prepared to an exceptional level. So I’m very grateful for that because, yeah, it’s very new to be on screen and kind of have the conversation with all that additional pressure. So thank you for working with us through that.
So, that’s all I have for today, Chris. And any parting, you know, thoughts, do you want to mention anything else before we say goodbye?
Chris: Well, just a big thank you to you Paula, for having me. And, as an extension, my team as a guest on your program today. We’re so excited with what we’re doing with the AAdvantage Program. We really feel like we’re connecting with our members and we’re excited for all of the new opportunities to engage with those that have been in our program, but ones that are joining us now.
So thank you, thank you for giving us the time to share what’s different about American and American Advantage.
Paula: Okay, well, listen, keep up the great work. Chris Isaac, Director of AAdvantage. Thank you so much from Let’s Talk Loyalty.
Chris: Thank you, Paula.
Paula: This show is brought to you by the Australian Loyalty Association, the leading organization for loyalty professionals in Asia Pacific. Visit their news and content hub for the latest loyalty insights from around the world. Or why not submit your own article for publication? For more information on their loyalty services and networking opportunities, visit australianloyaltyassociation.com.
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