What does Loyalty mean to Cathay Pacific?

FFP Online Interview with Dominic Purvis, General Manager,

Cathay Pacific Loyalty Programmes

With 15 years of airline experience in marketing and general management, Dominic Purvis has covered a lot of territory.

As General Manager Cathay Pacific Loyalty Programmes (CPLP), Dominic manages the airline’s customer information strategy and is responsible for loyalty marketing initiatives, partnership development and database marketing, as well as day-to-day management of The Marco Polo Club and Asia Miles.

CPLP, a wholly-owned Cathay Pacific subsidiary, was established in 1999 as a satellite company to manage the airlines’ loyalty programmes. Cathay Pacific’s signature loyalty and recognition programme is The Marco Polo Club. Membership is tier-based with members receiving more benefits, privileges and special services depending on membership level.

Club benefits range from lounge access to excess baggage allowance and guaranteed seats. More exclusive are the ‘by invitation’ events where high value Club members sip Lynch Bages and Krug Champagne under the guidance of wine consultants or take in a game of Rugby Sevens from the Cathay Pacific Box, for example.

Cathay Pacific management is well represented at Club events in Hong Kong and in other cities where events are held. The rationale behind hosting such exclusive and intimate gatherings is that by fostering a personal relationship with Club members, there is a greater sense of belonging.

It is also a vital opportunity for the company and its 250,000+ Club members to develop a relationship which has been tested and proven over the last 35 years.

The travel patterns of all Club members are actively monitored.  A process known as “life stage management” includes communications with members at different phases of their membership period to retain and activate them.

Communication can be in the form of targeted promotional offers that are in response to specific travel patterns or simply reminders of what members need to do to maintain their current membership tier.

The results of effective customer management were amply demonstrated during the 2003 Asia SARS crisis. Despite a 75% decrease in Cathay Pacific’s overall passenger revenue, the proportion of revenue contributed by Club members grew by 50%.

Separate and distinct from The Marco Polo Club, Asia Miles is a neutrally branded travel reward programme, which has 19 airlines and over 240 partners in 9 categories.

Miles can be earned for everything from flying and using credit cards to purchasing home furnishings and dry cleaning.

Miles can be redeemed to almost 1000 worldwide destinations with the rich array of airline partners or in a number of other redemption categories.

The most recent airline to join Asia Miles is Air China, which will come on board in October 2005.

Asia Miles has aggressive plans to further grow and expand.

“Asia Miles is already a well recognized brand in Hong Kong and we hope to firmly establish our Asia Miles footprint in Asia and regionally. Our plan is to further raise awareness by broadening the partnership base and adding more partners in more categories giving members depth and breadth in terms of earning opportunity,” said Dominic.

“Asia Miles redemptions are also becoming more attractive. We are continually adding more lifestyle rewards to the programme because it adds aspirational value and it’s glamorous to our members,” Dominic continued.

Asia Miles has enjoyed a lot of success in its relatively short six–year life. The programme has won many awards for its offerings, promotions and website. Asia Miles was named Best Frequent Flyer Programme by Asiamoney and at the recent Freddie Awards walked away with four honours.

CPLP runs a tight ship with a core team of less than 30 professionals setting the strategy and vision. “In a complex, multiparty environment, it is vital to keep our small management team focussed on driving value for members, for Cathay Pacific and for our partners. Wherever possible, we outsource the fulfillment and day-to-day management component,” says Dominic.

The labour-intensive running of a loyalty club is done with the help of vendors doing everything from partnership management to club communication mailings and above-the-line and below-the-line marketing campaigns. They also manage the 24-hour multilingual call centre.

CPLP has made significant investment in its vendors, who at any given time have up to 400 people on staff delivering services to Cathay Pacific’s loyalty programme members.

Additional growth will be managed by encouraging online self-service for member administration and further developing e-communication tools to support relationship management.

Managing the growth of Asia Miles and The Club both in terms of partnership development and in terms on membership growth is a continuous challenge, “but it is certainly one which we are happy to have!” said Dominic.

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