With an award-winning loyalty program and over 30 million outlets to spend their miles worldwide, both Etihad Guest and its members have good reason to celebrate. Last month Etihad announced that it formed a separate company, Etihad Guest LLC, to manage the (Etihad Guest) loyalty program. Etihad Airways, Air Seychelles and Air Serbia currently use the program.
One of the best minds in loyalty, my old friend Barry Green, has developed Etihad Guest since the initial design stage in 2005. Barry has been Vice President Customer Relationship Management & Loyalty for the airline and was named as the Etihad Guest Managing Director during the spin off.
I caught up with Barry in Seattle at the 2014 Freddie Awards where Etihad Guest won the award for the Best Loyalty Credit Card for its Abu Dhabi Islamic Bank (ADIB) cobranded card (Middle East / Asia / Oceania Region).
Roger Williams: Since the program’s launch in 2006, Etihad Guest has made non-flight rewards a priority and integrated them with a clean-sheet program design. As Etihad Guest becomes a separate legal entity can we expect to see further enhancements and an emphasis on non-flight and lifestyle rewards?
Barry Green: In a word, “yes”. We have, as you rightly point out, always put a big emphasis on the need to make it easy for members of our program to use their miles – and to give members a big choice in how they use their miles. This approach is not driven by Etihad Guest becoming a separate legal entity – this has always been our strategy.
We understand that our members are all different and therefore have different preferences when it comes to how they use their miles. This desire to give the member the maximum choice when it comes to spending their miles, is what prompted us to introduce PointsPay last year. This gives members the ability to ‘spend’ their miles at any one of 30 million outlets world-wide. This facility complements our online RewardShop, where products can be ordered using any combination of miles and cash, and delivered to the member’s chosen address anywhere in the world.
In addition to allowing members to spend their miles for products, we have ‘money-can’t-buy’ rewards available too. These range from exclusive tickets for sought-after events (such as paddock club passes for the Formula 1 Etihad Airways Abu Dhabi Grand Prix) to a chance to meet famous sporting personalities, who are available to us through our sponsorships of famous sports teams such as Manchester City Football Club.
RW: There has been a steady rise in airline loyalty programs positioning their miles as a viable currency that competes in many ways with local monetary currency. Taking this trend into account and the surge of crypto-currencies like BitCoin, what are the possibilities of Etihad Guest emerging as a notable currency – how do you balance this possibility with the priorities of providing loyalty for the airline?
BG: When we launched Etihad Guest in 2006, we always thought of ‘Etihad Guest Miles’ as a currency in its own right – internally at least. As we have developed the program, this perception has developed externally too, as we make more airline and non-airline products available with miles through the introduction of PointsPay.
As we introduce more and more methods for both accruing and redeeming Etihad Guest Miles, this position strengthens. However, we never forget that our major ‘raison d’être’ is to support our airline, by providing a compelling reason for passengers to be loyal to Etihad Airways and its airline partners. After all, one of the most sought-after rewards is still airline tickets – especially on a carrier with such a tremendous reputation for service and product excellence.
RW: Etihad Guest has gained a reputation as a technologically innovative program, with awards to prove it. Can you comment on what challenges you face on running a successful loyalty program and the application of technology to solve those challenges?
BG: In today’s world, technology can be a great enabler. However, the pace of change in the technology arena brings its own challenges. We could not have achieved what we have with Etihad Guest without deciding to be innovative from day one – and to do so by taking advantage of new technology. The concepts at the heart of any loyalty program are not new – it’s just that the methods we use for achieving the same goals are different and often much more immediate.
We are constantly faced with the dilemma of how to introduce new technology, new ways of giving choice to our members, whilst at the same time sticking to our mantra of “ keep it simple for our members”. Another challenge we face as an airline loyalty program is that we have some of the most complex combinations of IT systems, and it’s not always easy (in fact it’s rarely easy!) to effect changes to these systems quickly. This is one reason why retail programs often feature more highly in the ‘top ten’ of the ‘best’ loyalty programs.
RW: Is there an Etihad Guest IPO in the cards, or is the new separate legal structure more of strategic accounting/finance reasons?
BG: There’s no immediate plan for going down the IPO route with Etihad Guest – nor are there any compelling reasons for doing so. Rather, one of the major reasons for separating Etihad Guest from the airline is as part of the general move towards establishing the Etihad Aviation Group and separating the different entities into stand-alone businesses – the airline being just one of many. This allows those businesses to focus their attention on what their prime goals are, and deliver on their own business plans. Etihad Guest has its own business plan for the short, medium and long-term future, and will continue to make a significant contribution to the overall Group figures for 2014, and the years to come.