Any Seat. Any Time.
As the first program manager for Virgin America's Elevate, I led the delivery from initial design concept to transformative airline loyalty program serving millions of Guests. From day one, Elevate was the gateway to better flying and would become the company’s most valuable asset measurably shifting share, recognizing profitable behavior, increasing Guest repeat, and catalyzing industry change.
With a bold product that defied the status quo, Virgin America established a new standard for domestic travel, proving that great Guest experience is not only desirable, but also profitable beyond face value.
Fasten Your Seatbelts
It’s May 1981. American Airlines (AA) has just launched a free flight promotional initiative known as AAdvantage to recognize flyers for making direct bookings, a move that would ultimately disrupt travel agents as intermediaries of the customer relationship. Recognizing the opportunity, United Airlines launched MileagePlus 10 days later.
These initiatives would dramatically transform the playing field, but no one could imagine just how deeply it would enshrine customer expectations and entitlements over the next 25 years: a mile earned per mile flown, fixed reward charts with blackout dates, the storied road warrior with more than a million lifetime miles to their name.
Getting a commercial flight off the ground is a complex journey in an industry already recognized for its tight operating margins. So it is little surprise that launching an airline in a mature industry requires an innovative approach to acquire customers and measurably affect Guest behavior.
Virgin America had a short window of time, perhaps six months from launch, to identify and lock in high value customers before competing airlines launched aggressive targeted marketing at their flyers to retain or win back customers. Legacy programs were squeezed as the mile became a less reliable proxy for customer value, and revenue management prioritized paid bookings over reward tickets. Customer pain points became more acute as increasingly restrictive redemption rules meant that frequent flyers in the legacy programs often couldn’t find seats for the flights they wanted while redeeming their hard-earned miles.
Making Flying Good Again.
Virgin America had the opportunity and even the imperative given its brand and customer expectations to do something different. So we set out to create something new that is:
- Better for the Guest
- Better for the Airline
- And true to the Virgin brand values
Enter Elevate.
Earned Secret
By putting the focus on the Guest, not the mile, Elevate could tailor program elements to Guest behavior, shifting the rewards paradigm in ways not easily replicated by entrenched programs.
Combining revenue-based earning with revenue-managed liability, Elevate would also become the program with the most economic leverage across the value chain without slamming the Guest with restrictions, setting a new industry standard that others continue to try to meet.
How It Works
Virgin’s credibility as an innovative and iconoclastic brand afforded the opportunity to build true loyalty through emotional engagement. Elevate delivered the core benefits and attributes that travelers expect while leveraging “uniquely Virgin” benefits and experiences that reinforced the brand. A chance to win a seat to space? That’s Virgin.
All Guests were encouraged to join Elevate. In fact, they had to in order to access certain benefits. It would take flawless delivery of the expected just to get in the game: earning rewards quickly and fairly, no blackout dates, choosing the benefits you want, no bait-and-switch promises. And as the gateway through which Guests engaged with Virgin, Elevate could recognize not only past behavior and preferences, but also reward future, profitable behavior, creating the platform to maintain and extend the relationship into a Guest’s lifestyle, beyond specific transactions, even when not traveling.
What made Virgin America great was its ability to excel at multiple stages of the journey from launch to scaling, by leveraging the promise of the brand with behavioral insights from its valued Members. Given the high stakes and limited time, the obvious thing to do would have been to launch a legacy-equivalent frequent flyer program that played by the same rules everyone expected, but Virgin America recognized that building a business starting with an experience that prioritizes Guests can create real value worth paying for.
Reflections
Being part of an industry revolution for Guest choice and transparency is about much more than status. Leading with purpose and values that people care about is especially powerful when you affirm your distinctive character by your actions.
It's not: How do I make customers loyal to my brand? It is: How do we demonstrate our loyalty to our customers such that given a choice, they choose us again? This is the essence of the culture-driven brand.
Great Guest experience is great business.
