Frequent Virgins
Leave it to Virgin Atlantic to forgo frequent flier miles.
The London-based airline has made loyalty marketing one of its top priorities this year, but don’t look for its frequent flyers in U.S. airports. Instead, Virgin is sending them shopping with American Express cards.
Virgin began a card promotion in March to court business travelers for its frequent flyer program, Virgin Freeway. The program has 200,000 members in the U.S., a fraction of American Airlines’ 32 million members worldwide. Flights between eight U.S. cities and London don’t give Virgin enough destinations to make U.S. passengers want to collect miles. Still, if it could get travelers to “sample” the airline once, Virgin execs feel sure its superior service would win converts.
“We want to get people to try Virgin, then push them through the loyalty cycle until they become evangelists for us,” says director of marketing Sarah Buxton. “Virgin loyalists become almost like a sales force for us – they rave to their friends.”
Enter the shopping spree card. Passengers who buy round-trip tickets and then enroll in Virgin Freeway get AmEx stored-value Persona Select cards worth $50 (for coach passengers) or $500 (for the “upper class”). Cards are good at 150 merchants, mostly high-end retail and travel services “with a high level of remembrance,” says Darryl Hutson, ceo of American Express Incentive Services, Fenton, MO. “We want people to feel special about what they buy, so we stay away from staple items.”
Cards have more cachet than cash. Virgin considered cash rebates – a growing trend among foreign airlines – but “it wasn’t very Virgin,” Buxton says. The appeal of techno-goodies like Palm Pilots was too narrow. But the card has wide appeal, and “we can market it as a shopping spree, instead of just bribing people with cash,” Buxton says. (Virgin Freeway members also earn travel rewards and “activity rewards” like tandem skydiving, hot-air ballooning, and off-road driving as well as miles.)
Response to the Persona card offer was so strong Virgin extended the promo another three months through June. When Buxton travels for business, she queries seat mates. “Lots chose Virgin for the card, and are impressed by the flight,” she says of her impromptu research.
Virgin shook up the marketing mix this year, earmarking a greater portion of its budget for loyalty programs and direct marketing – and hiring its first direct marketing manager. “We’re spending the whole budget more wisely,” says Buxton. Virgin handles promos in-house, with an assist from its general agency, London-based CMG Communications.
