C is for Coalition, Complexity, and….


Chitra Iyer

July 10, 2023
philip myrtorp

With 26 partners, the big ‘C’ that comes to mind when you contemplate Star Alliance is ‘Complexity’. 

Diving a bit deeper, we surface 5 other C’s that offer insight into how this super successful loyalty coalition actually makes it all work.

Communication and commitment 

26 individual airline partners (several of whom compete in various markets) must balance local customization in ‘home markets’ with a more global understanding of member priorities and needs. Commitment to the coalition also means consulting the larger group before taking decisions at a local level that may impact global members.

How do they do it? Group Director of Loyalty, Renato Ramos puts it down to disciplined communication between partners, following a strict meeting calendar. They set common goals, agree on execution standards, iterate new initiatives, and define technology, data, and insight-sharing protocols. The latter is especially key not only in an era of personalization but also data privacy concerns. 

Convenience and connectivity 

All of this sounds incredibly complex. Yet, as a customer, the experience and value proposition has to be simple and elegant. Star Alliance conveniently roots global reach, worldwide recognition, the ability to earn and redeem across a wide network of airline partners, and seamless service in the member’s primary preferred program. 

It would be easy to get lost in the superficial aspects of this proposition, but the program’s longevity comes from first prioritizing the basic need of frequent flyers: a comprehensive airline network with optimal connectivity and competitive prices. Filling gaps in connectivity and enabling members to earn anywhere is a key reason for Star Alliances’ success.

Consistent CX 

Star Alliance does not run a loyalty program by itself but supports 20 different programs under 26 partners to deliver a seamless, consistent experience to each member.

One of the challenges with multi-partner coalitions is getting all the partners to see the value of each customer through a consistent and standard lens. Aside from the ‘points framework’, this needs people to share a mindset that equally respects the customers of each partner; and the technology and processes to recognize and provide a seamless CX across the board to them all. 

Cost of Retention 

Several studies have recognized that loyalty programs are a critical revenue stream for most airlines, especially post-pandemic. For Star Alliance, loyalty is the core business strategy and not a marketing initiative. Their goal is to retain the most valuable customers and make them more profitable. Tracking and optimizing the cost of retention as well as a members’ share of wallet are thus north star KPIs. Ramos shares a recent example when data from their co-branded credit card partner revealed a mere 50% share of wallet with top-tier members in some markets. This led to a tailored and targeted retention campaign which ultimately grew the share of wallet and profitability.

Customer-centric innovation

The pandemic highlighted the need to keep members engaged even outside of flying. Star Alliance realized the need to elevate the member experience and drive engagement in lean travel times by better understanding their customers’ new way of living, working, doing business, and of course, traveling. 

As a result, they are focusing innovations around ember engagement in non-home markets, and leisure travelers. 

To drive engagement, relevance, and share of wallet in markets not covered by the ‘home markets’ of the 26 members, they adopted a loyalty approach to creating member value with non-airline partners.  For instance, members can avail cabin upgrades on the Heathrow Express to downtown London. 

The pandemic, coupled with a recession and a new generation of hybrid workers has also hit them where it hurts most: business flyers. Despite the fact that leisure travellers fly less frequently, Star Alliance is challenging itself to create a value proposition for them with flight and non-flight-based earning and redemption options in a post-pandemic world. For instance, experimenting with dynamic pricing for anytime, anywhere, no-blackout redemptions; and the ability to buy a limited number of miles per month to ‘save up’ for a future flight. 

Get the full episodes here: 

Star Alliance’s Latest Loyalty Insights, Ideas, and Innovation

Airline Loyalty program Valuations

How to build airline loyalty

👉 Am I missing anything? Share your experiences with coalition loyalty programs below.

👉Want more such insights from the world’s best loyalty programs each Monday? Sign up for Monday Moments here or share with a colleague to earn your Monday karma! 

About the Author

Chitra is an experienced marketer turned freelance B2B content creator. She writes about CX, martech, sales tech, ad tech, retail tech, loyalty tech, and customer data and privacy. Of her two-decade-long career, Chitra spent the first half in senior corporate marketing roles in India. She’s led communications, digital marketing, and marketing ops teams for companies such as Timken Steel, Tata Play Satellite TV, and Procter & Gamble (P&G).

She has served as the editor-in-chief for the pioneering martech site Martech Advisor, which she led through a successful acquisition by Ziff Davis. She also conceptualized and co-hosted three seasons of one of the earliest Martech podcasts, The Talking Stack, with renowned Martech experts David Raab and Anand Thaker.

As a freelancer, Chitra creates original, thought-provoking content for senior B2B audiences, and has authored over 500 articles, white papers, ebooks, guides, and research reports about Martech and CX for clients around the world. She writes monthly columns for CX publication CMSWire and HR tech publication Reworked; and teaches a course on freelance B2B content writing in association with the Himalayan Writing Institute in India.

Chitra holds a Master’s in global media & communications from the London School of Economics and Political Science, and an MBA in marketing from the Institute of Management Development & Research, India.

In 2011, Chitra opted out of the city and moved to a farm in rural Punjab, in the north of India, where she and her husband breed thoroughbred race horses, grow organic food, and homeschool their two boys.

Leave a Reply

Your email address will not be published. Required fields are marked *