AIR MILES CANADA:

REBRANDING THE AIR MILES REWARD

PROGRAM

PRESENTED BY:
GROUP 2
ABOUT THE CASE:
 The case is about rebranding the Air Miles Program.
 The program was intended to re-energize the brand and
program’s more than 9 million active household
accounts, representing more than 14 million Canadians
 Campaign had a strong emotive elements in its design
and execution
OBJECTIVE OF THE CAMPAIGN:

 To become the premium position holder in

loyalty industry
ABOUT THE COMPANY:
 Program was owned and operated by loyalty and
marketing services, a wholly owned subsidiary of
Alliance Data System Corp (ADS) based on Texas
 ADS provides transactional services, credit services and
marketing services business.docx
 manages more than 105 million consumer relationship
for North America’s Cos.
 ADS employed 8000 associates at more than 40
locations
CONTINUE..
Company’s business:
 It helps clients in building long term relationship with their

customers
 Next step was to reward customer on loyalty
 It develops insight into

 customer behavior

 Create customized solution for individual companies

 Manages all aspect of loyalty program for them
 So main objective was to rebrand the campaign in order to

have more emotional engagement with customers

 CUSTOMERS
Program had two set of customers:
I. Sponsors
II. Collectors
Sponsors
 include: supermarket, financial services provider, National
petroleum retailer, specialty retailer, pharmaceutical retailer,
consumer services & B2B services
 Sponsor’s utilized the loyalty platform offered by a program by
issuing reward miles to shoppers for their everyday purchases
 44.6% of program revenue comes from its top sponsors which
include Canada Safeway, Bank of Montreal, shell Canada & Amex
Canada
 Reward was given to the customers for shopping at sponsor’s
location & and an incentive to shop again with the same retailer
Benefits to sponsors:
 Increases market shares and profitability
 Provides a loyalty program at lower cost
 Program was managed by team which comprises of marketing and
analytical professional

COLLECTORS
 Individual consumers & households signed on as collectors

 They accumulate reward miles based on their purchases at sponsors

by using one of the program’s credit card partner’s
 The program had issued about 17 billion reward miles since 1992
 Suppliers:
 Provides goods & services to collectors in exchange of AIR MILES

reward miles
 it include airlines, leisure & entertainment providers and consumer

electronics manufactures.
 THE BUSINESS MODEL
The Revenue Stream:
 Collect fees from the sponsors based on the number of reward miles
issues
 Also collect fees for marketing and administrative services provided to
sponsors
Breakage
Percentage of unredeemed reward miles by collectors
Reason for breakage:
 Moving out of collector from program area
 Death of a collector
 Loss of interest on the program or sponsors

 Estimated average life of reward miles is 42 years

 COMPETITION

 Program competed with advertising and other promotional programs

 Also competed against loyalty program s and services created by

other companies
 Remaining partnered with sponsors was crucial and reward offered

should be attainable and attractive

 Another issue was to sustain a large number of active collectors

Differentiation: “Democratization”
AIR MILES offers everyday rewards for everyone on every purchases
 REBRANDING
 AIR MILES was well known brand in Canada with 97% awareness
among canadians
 Main objective was to find out the ways to sustain collectors activity

levels in program( by keeping the program relevant to their needs)

Program segmented collectors in four groups:
 The best
 Next best
 Maintain

 Low

The best: (highly profitable) NOT TARGETED

 Strong advocates for the brand

 Collect reward miles regularly & Visit the company’s website

 Respond to surveys & pull out AIR MILES card without any prompt
Next best: Targeted
 Objective was to lift their activity level to that of the best group

segment
 Next group segment collectors used to collect cards but only after a

prompt
REASON FOR RERBRANDING:
 Firstly, Collectors were diversifying their collections across

multiple categories. Program was thus no longer earning a bulk of

revenue from air travelers
 Secondly, Aeroplan, the air Canada frequent flyer program was

indicating that its goal is to replicate AIR MILES models

THE REBRANDING METHODOLOGY
TWO TRADITIONAL APPROACHES

LOOK OUT WARD LOOK INWARD

• Comp. scenario  Get to the heart of what the

• Ascertain the gaps in the
market offerings
• Seek differentiation by
filing one or more of the
gaps
company stands for and
adjust the positioning to
reflect that deeper inside
 Letter through Papadator, there is an opportunity for
the program to reconnect with what had made the
AIR MILE reward program successful as an
organization.
 Such an approach would also provide an opportunity
for AIR MILE as a BRAND, to become more
meaningful to customer
 The goal was to change the attitude of specific
Collector segment.
 The next best from neutral to positive
 Focus group had been a key source of consumer
insight
 No direct question method
 The company looked at alternative forms of research
– STORYTELLING (emerged as a possible format)
 A group of 20 collectors for in-depth research in key
customers market s across CANADA were taken.
 It has taken help from a consultancy firm who is
specialized in storytelling methodology.
 The CEO of the firm Edward Watchman acted as a
facilitator.
 Instead of focusing on customer experience with an
Air Mile card , customers participated in a series of
storytelling exercise that is centered on the theme of
“FEELING REWARDED”.
 Communality emerged in the use of a specific term
and the meanings they associated with those terms
such as GIFTS.
 According to EDWARD WATCHMAN “the story
telling process helps individual let go for their logical
guards so that they have better access to their
emotions”.

 After the session it was found that collectors from one

end of CANADA to other have the similar story about
the reward experience . Although each story in personal
and different, they all followed the same plot.
 Each story be gins with the sense of hope for the
future.
 Then there was crisis.
 And then a helping hand came along.
 The arrival of unexpected help was followed
immediately by goal setting and a period of hard
work.
 After a period of trial and tribulation, each story
ended with a resolution. The goal was achieved.
 That was the reward.
 And then interestingly, in every story there was
second level of reward.
INSIGHTS OF STORYTELLING RESEARCH
 A reward that came out of the blue was not as viable as a
reward that one had worked hard to earn.
 The work of collecting had intrinsic value.
 An equal exchange of give and take in life
 Finally it became clear that the emotion s associated with
“FEELING REWARDED” were deep routed and in
many cases individuals were marked by these defining
moments that gave real meaning to their day to day lives.
 FINDINGS & RESULTS
 Earlier company was not addressing the inherent possibilities of
celebration by collectors. Now brand started focusing from
functional experience to one that is emotionally engaging
 Company formed a new creative platform. It hired new brand agency
which will develop TV commercials, radio spots, employee launch
material, direct marketing materials, and a video message from the
company’s president
 It became mandatory to every employee to “participate” in
development of new brand.
 Voice of brand consistent with “the voice of the collector”
 Results shows that the campaign was very successfulresults.docx