Southwest Airlines Inertia Loyalty Strategy

1. Inertia Loyalty: Optimization of barriers to exit

This type of loyalty primarily deals with the concept that customers are not motivated to switch brands because it is too much work (Brand stickiness). Common practices are subscriptions and contracts.

• Transactional—Focus is on business renewal. Loyalty marketing is seen more as a cost than an investment in retention.

• Passive—Most members do not care enough to evaluate alternatives.

• Drives Activated—Defend. Consumers defend their time and avoid making any effort to switch.

• Weakness—This program only works as long as the barrier itself remains. There is nothing in addition than can make the customer stay in case the barrier falls.

• Where Do We See This? Airline carriers—retention

• Weakness—Not taking the chance to connect members with each other, to reinforce brand choice. Members in general focus only on their own personal experience.

• Where Do We See This? Southwest Airlines

Southwest mission was for a long time to “democratize the skies”, focusing on affordable fares and excellent service. The crew delivers a more personalized service, including singing occasionally a song during flight, and their “bags fly free” policy, such extras differentiate them from other carriers. On a more strategic level, Southwest increases customer engagement through their comprehensive loyalty program (tracking of status). But the biggest offering is their Companion Pass, that enables frequent traveller to choose a person that flies free with them for a year.

4. Cult Loyalty – Optimization of the social bond. This concept goes even further than True Loyalty. It emphasizes the customer relationship by activating all biological drives and makes the customers to identify with mission and values of the brand and of the program. The member even perceives the program as a part of who they are as

By truly caring about customers’ needs, creative reward programs, personalizing interactions, marketers strive for a complete and engaging human experience (Kirk & McEuen, 2015). It became also clear that airlines use different approaches how to structure their frequent-flyer program, Lufthansa uses mostly Mercenary Loyalty and Southwest is focusing on True Loyalty. These findings are very valuable when structuring a new reward program, as different approaches target different customer groups and lay a completely different focus on how to achieve loyalty to the