31 March 2005

Malaysia Airlines Enrich programme

Enrich is the Malaysia Airlines frequent flyer programme. To qualify for the gold card, you need to travel 35,000 miles in one year in either business or first class. I'm an Enrich member and have been for around 10 years. For a couple of years, I had a Gold card. They took it away from me this week and replaced the gold card with a blue card that offers no other benefits than air miles. Negative brand experience, to say the least.

If we assume that the purpose of the Enrich programme is to gather information, understand customers better by profiling individuals and by being in a position to offer customers what they want, when they want it with a view to change the way the company operates internally to improve customer service and make marketing more segmented which in turn, will lead to improved profitability, then the system is obviously flawed.

Customer loyalty and communication with existing customers are critical to the long term success of brands. In 'Scoring Points', the definitive account of the world's most successful loyalty scheme, the authors talk of the Tesco Clubcard being 'as much about Tesco showing loyalty to the customer as it is about the customer showing loyalty to Tesco'.

Much of this focus on retention is due to the fact that despite US$1.5 trillion a year spent on marketing, 80-90% of products fail to become brands. This poor success rate (imagine an airline with a failure rate of 90%!) is a result of most strategies being acquisition focussed. McDonalds for instance, used to spend 60% of its marketing budget on TV advertising, it is now down to around 35%. The 25% is being spent on retention programmes.

Over the past 10 years, Malaysia Airlines has rarely commmunicated with me. As a result they have little information about my purchasing habits, opinions and preferences. (Even the 'demotion' from a Gold card member to a blue card member warranted a meagre two lines at the top of a generic mailshot!).

If they did communicate with me, they would know that whilst I may not be travelling first or business class as often as I used to, I am definately spending more with MAS than I ever have done!

Let's use Bali as a case study because I recently took my family to Bali and we're going back again in April. Now, according to malaysiaairlines.com, a business class ticket to Bali is RM3,044 return.

To fly my family and I to Bali, all economy class, there are a number of fares quoted (subject to availability) on the above site, ranging from RM3,399 and RM7,161 for all of us. Even if I were able to secure the lowest fare, and invariably the lowest quoted fare never seems to be available, I would still spend more than if I travelled Business Class. Indeed, the last trip we paid around RM5,000. However, none of the miles accrued, and technically I've travelled 6 times further than a business class passenger, would contribute to my attempt to qualify for a gold card.

In April, we're flying around 20 staff to Bali and the cost is approximately RM12,000, equivalent to 4 business class tickets. Despite paying for the tickets and because we are all travelling economy, none of the miles will go towards qualifying for a Enrich gold card.

Outdated yield-management systems and bad pricing strategies have been exposed by the internet and low cost airlines. And because an airlines' internal financial workings are as mysterious as the ability to make airline food taste the way it does - in business or economy, it is practically impossible to find out what it costs to operate the flights to Bali or where the profits are however it is common knowledge that to turn a profit, ASM and RPM need to be as close as possible. But let's not go there.

Come on MAS. The future success of your brand depends on how well you develop relationships with your existing customers and how you encourage them to become brand ambassadors.

Perhaps Malaysia Airlines Enrich team would like to borrow my copy of Scoring Points. Then they can develop a loyalty programme that is relevant to the customer economy of today and is therefore of benefit to customers and not just the airline. Better still, (and this is a shameless plug) get in touch with FusionBrand and let them update the Enrich programme!


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Anonymous Anonymous said...

Interesting article on Enrich. I just went through the very same experience as you did and fully agree with you about Enrich's poor customer service, their convoluted perception of what loyalty is. I can imagine what a customer feels like when they are given a false sense of priveledge only to have it removed just because they do not live up to one criteria although all other aspects fully supercede this. For example, although I may not collect Elite miles, I do fly 8 times a month regionally in Asia and my long hauls are still using MAS. Even that is not sufficient to compensate their narrow minded criteria of Elite Miles.

I wonder if there is any way to set-up a protest against such misleading marketing promotions which in my mind is equivalent to misguiding the consumer.

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Anonymous Anonymous said...

I agree, MAS Enrich definitely leaves a lot to be desired. I have been a member since 2003 but for 2 years, many of the points I accrued mysteriously 'disappeared' due to system error (their explanation) or staff stealing points (an insider's explanation). Therefore they have no incentive to keep their users loyal, it is just a lame prop for them to justify employing a department. Their definition of 'elite' is laughable, but they are definitely not one of the best to fly with in Asia.

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