Air Miles Canada

Rebranding the Air Miles Reward Program

 INTRODUCTION

Objective-

• Intended to re-energize the brand and the

Program’s more than 9 million active household
accounts, representing more than 14 million
Canadians.

• The campaign was also meant to refocus the

brand’s premier position in the loyalty industry.
 INTRODUCTION

Rebranding Campaign featured two approaches that

were new-

• Background consumer research had not followed

the conventional route of focus group.

• The campaign had strong emotive elements in its

design and execution.
 THE COMPANY

The program was owned and operated by Loyalty

and Marketing Services - subsidiary of Alliance
Data Systems Corp. (ADS) - based in Dallas,
Texas.

ADS was a leading provider of transaction services,

credit services and marketing services.

Managed more than 105 million consumer

relationships for some of North America’s leading
companies.
 THE CUSTOMERS

Program had 3 sets of customers: Sponsors , Collectors, Suppliers.

Sponsors:

• More than 100 brand-name business partners, utilized the coalition loyalty
platform offered by the program - issuing reward miles to shoppers for every
purchase.

• Sponsors included supermarkets, financial service providers, national

petroleum retailer, consumer and B2B services - forming the largest coalition
offering a common loyalty platform.

• Canada Safeway, Bank of Montreal, Shell Canada, Amex Bank - Largest

Sponsors, 44.6%.
 THE CUSTOMERS

• Each Air Mile reward was both a reward to the consumer for shopping at
Sponsor’s location and an incentive to shop again with same retailer.

• Program offered category exclusivity to Sponsors on a regional or

segment basis.

Benefits to Sponsors-

• Program contributed to sponsor’s effort to change consumer behavior .

• Enabled the business to operate a loyalty program at a lower cost.

• A dedicated team was assigned for each sponsor who guided them and
serviced each account.
 THE CUSTOMERS

Collectors:
Individual consumers and households acted as
collectors – accumulated reward miles on purchase at
sponsor’s location or by using one of credit-card
partners.

Reward structure facilitated a quick and easy manner

for collectors to earn a broad selection of awards.

The program has issued 17 billion reward miles since

1992.
 THE CUSTOMERS

Suppliers:
Included airlines, leisure and entertainment providers
and manufacturers of consumer electronics.

Provided products and services that collectors could

receive in exchange for accumulated Air Miles.

Program featured 300+ suppliers, offering 800+

reward opportunities in multiple categories
 The Business Model
The Revenue System

 The program collected fees from sponsors based

on the number of air miles issued.
 Fees for marketing and administrative are

provided to sponsors- “Deferred revenue”

 Some reward miles went unredeemed by

collectors – “Breakage”.
 Air miles rewards were never expired.
 Till Dec 2005, $610.5 M as deferred revenue and

3.25 billion reward miles are issued.

 The Competition

 The program competed against loyalty

programs by other companies.
 Remain partnered with sponsors that were

desirable was crucial to remain competitive.

 To attract new sponsors and consumers –

sustain active collectors.

 Maintaining differentiation was crucial to

remain competitive.
 Rebranding
 The Canadian loyalty market was becoming
saturated.
 Also popularity of loyalty credit card was growing.
 Company needs to preserve the distinctiveness of

Air Miles brand.

 The Program segmented the collectors into 4

groups based on intensity of their engagement:

Best, Next Best, Maintain and Low.
 The Rebranding program was targeted to Next

best collectors.
 Other reasons for rebranding:
 The program was no longer earning a bulk

of its revenue from air travelers.

 Collectors had limited awareness that the

program went beyond the flight reward.

 Aeroplan, the Frequent flyer program was

indicating its goal to replicate Air Miles

model.
The Rebranding
Methodology
 Stage I

Examining two traditional approaches

•Look Inwards
•Ascertain gaps
•Change Positioning
•Seek differentiation
to reflect deeper
by filling them
insight

More
Meaningful
 Stage II
Expectation from rebranding.

Inc. in
Supplier Cust. Consumer Issuance
or Acquisiti Awareness of Reward
sponsor on Miles

Attitude of
collector
segment
 Stage III

Consumer Insight

Focus Group
Storytelling
Format
 Storytelling
Theme: “Feeling Rewarded”

Group Split: Each group was split into teams.

Team Activity: Develop a story about “feeling rewarded”.

Wrap Up Activity: Each participant was invited to write a personal

story of feeling rewarded.
 Learning from Activity.
 Each Story was personal and different.
 Every Story was built around common

elements.
 Each story began with a sense of hope for the

future.
 Then in each story there was a crisis.
 After a period of trial and tribulation, each

story ended with a resolution. The goal was

achieved.
 Conclusion.

Emotions associated with “Feeling

Rewarded” were more important than
the reward itself.

It was this realization that marked the

beginning of a new journey for the
brand, from functional experience to
one that is emotionally engaging.
Thank You