Advice on creating private jet frequent flyer program
 

FlyerTalk members have been a great resource for me as a travler and I'm hoping you can help me with the creation of my private jet company's frequent flyer program. We've surveyed our clients about what they would like to see offered, but I wanted to also get your opinions.

1. Do you prefer smaller incentives more often or do you prefer programs that offer free flights, but don't offer smaller incentives such as in-flight amenities, upgrades, etc.?

2. How important is the quality of your physical frequent flyer program card?

3. Does the quality and personalization of the welcome pack and the way you are notified about moving up a rewards level matter?

4. What's the frequent flyer perk that you most remember?

Here's the first draft of our Privato PrivateMiles Program:

http://www.flyprivato.com/privatemiles.html


Thank you,

-Brad

I perused the Privato website for a few moments and it's riddled with missing punctuation, awkward phrases and text that needs significant editing. I think you need to focus on this before concerning yourself with the specific details of a frequent flyer program.

First off, welcome to FlyerTalk!

Browsing your website, it appears the focus is on charter luxury leisure travel to certain destinations, more so than on-demand business/corporate travel is that correct? A leisure-heavy customer base (even if they are well-to-do) likely has different needs and priorities than one built on a higher proportion of business travel.

Do you only fly routes among the listed cities (all in CA except LAS) or could someone in ORD book a flight to, say, LAS? If the route structure is fairly limited, I think that limits the utility of a rewards program, or at least changes is focus. There are probably only so many times a person would hop on any of those routes in a given year, I would think.

Much of your proposed amenities for rewards are geared towards in-flight amenities and experiences. They sound very nice, but could you give us an idea of the level of in-flight service as well as the "hard product" (seats, legroom, IFE, etc) that a customer would experience on a regular flight? I think that would better help to understand what upgrades and freebies would be more desirable compared to a normal flight experience.

I would be wary of creating 'tiers' in a frequent flyer program for private jets. If I were to hire a private jet I would like to think that I was getting the 'ultimate' in priority, attention, rewards etc. If this is not the case and there is a tier above me, then the experience would be 'cheapened' somewhat.

1. I personally prefer to save up and redeem for 1 big amazing trip 1x/year but like the flexibility of knowing that if I need to, I can use the miles to upgrade, book hotels, etc.

2. I like the way most companies tier their cards and really like the carbon fiber design of the top level card you have.

3. Absolutely. I find some airlines really skimp on this and it does have an effect on their image. Even low end (i.e. 25k/year) fliers are valuable frequent fliers to the airline and should be treated as such.

4. Being able to redeem for flights that I otherwise wouldn't be able to enjoy (i.e. First class on LH A380 this coming summer that I won't be able to do again until LH allows them to be redeemed by other *A partners or I start making quite a bit more $$$).

A big perk of many other programs is the ability to earn points/miles through methods other than flying alone. This is beneficial to the company because they can sell miles to partners and add another revenue stream, but the redemption levels must take into account the easier accumulation of miles as well.

Ability to spend CC points (from your branded card, AMEX, etc.) on private jet seats.

Ditto to what most of the previous posters have said.

Beyond that, you seem to be putting the cart before the horse. Frequent flyer (or guest, customer, etc.) programs do not exist to reward past behavior, though that's the visible part of how they work. They exist to motivate future behavior. You have to ask: what sort of future behavior do you want to motivate? Who do you want to motivate? What rewards would this person value?

In terms of this last point, FlyerTalkers are not your target market. We tend to be fanatic about FF miles, levels and so on, often as a hobby or "game." We are not representative of commercial air travelers, even less of private or fractional jet users. We respond to different motivators. If something will work for us, that's near-definitive proof that it won't work with the people you're talking about. (That may be a slight exaggeration, but only a slight one.) As one example mentioned earlier, as a commercial frequent flyer I value elite status and understand that those who fly more than I do will have a higher status, but if I was paying hourly jet charter rates I wouldn't want anything like this to show me how small a fish I really am.

So, I think it needs some basic business school re-thinking rather than imitating what works in a very different business environment.

It seems that you don't actually operate any flights, but are a travel agency that books the flights and services. That said... A couple thoughts.

It seems to me that most reward programs give the user something like 10% back(whether this is a sandwich card or a frequent flyer program). What does your customer base look like? How many are flying 10+ private jet roundtrips in a year or two? Those customers might be wooed by the offer of a free flight.

On the other hand if a lot of your customers fly by private jet once or twice a year I would try and focus on getting them to fly _once_ more a year. Some in flight amenity would probably be best here.

The last group are those that fly once - how do you get them to fly again?

Depending on what the market looks like, then you need rewards designed to meet that.

Also, be careful that you offer awards you can actually make money providing. Airlines provide class upgrades because it doesn't actually cost them very much to give you the upgrade (except in the possible sale of the seat). Same with award tickets. On the other hand, is your mark up so high that you can make money providing a "heavy" jet for the price of a "mid size" jet?

Also, the leisure issue is important. Most FF programs started and often focus on remaining a way to get flyers to choose a particular airline when someone else is paying. If these are people paying for their own flights, I might focus mostly on every flight value and amenities. And if you do a FF program, make it very simple low cost reward system (e.g. southwest).

A loyalty program for this kind of thing is going to be tough, since your customers are paying more for one trip than most people on FT spend annually. Unless you give them a free trip, it is going to be hard to use smallish freebies to motivate someone who can afford a private jet.

Also, airlines run loyalty programs to give them a competitive advantage since their prices are mostly fixed to those of their competitors. No such thing in private aviation since it's prices are negotiated.

One last thing. You want to make sure that whatever incentives you have in place are there to motivate the purchasing decision makers. Showering the passengers with goodies won't really help if they don't have authority over the purchase decision.

The pax are also going to wonder why they aren't already receiving all the various in-flight amenities that you are offering for redemption awards.

I don't know what airframes you are operating, but the in-flight spa services, which probably require an additional crewmember to provide, will be a source of continual frustration to your customers when you say "We can't bring the massage therapist because of weight & balance issues." And what happens when you get to your destination with a beautician on board, then the pax decides he wants to go to Timbuktu ASAP, but the fuel requirement won't accommodate the beautician? Or if the pax decides to bring along someone else from that intermediate stop? Even if you get a simple, 1-way trip with a pax who wants a spa treatment, the extra person will limit your ability to pick up business from that destination airport. And finally, in any of these cases, you might not be able to boot the spa technician off to fly commercially, depending on where you are. Oil fields in Canada or Montana ranch towns don't exactly have convenient or cheap air carrier service. That is why these pax are hiring your jet in the first place, isn't it?

Also, what is your business model, because I'd love to know how you are able to eke out big enough profit margins to afford to give out these perks by flying charters. I know the business and know how razor-thin margins are (excluding fractionals and corporate flight depts).

Speaking of razor-thin margins, you wouldn't be ignoring the financial liability assumed by giving out all these points/miles because you are already looking to sell the company or file for bankruptcy, are you? All FF programs are usually "subject to modification or termination at any time," so I hope this isn't a last-ditch attempt to drum up business by pulling the plug. You will have some angry (former) customers, then.

This not my type of product, but recently somewhere I read about the Delta Private Jet Service and the benefits offered by their card (with $100,000 deposit), those can be found here:
http://www.deltaprivatejets.com/jetcard/Features.aspx