Why is this interesting? - The Loyalty Edition

On loyalty, travel, and unique ways to deliver status

Colin here. In travel and hospitality, loyalty is a big business. What began as a mechanism to enable repeat guests is now a huge force, and loyalty points to airlines and hotels serve as a shadow currency of sorts. Just ask a consultant how much they valued their now-defunct Starwood points, or their status on American Airlines. Peek into countless forums and it is a netherworld of how to optimize, earn, and spend these currencies for free travel, and how to continually attain the coveted top tier status. 

Recently, on a KLM flight to Bali, I was given a small blue and white porcelain house at the end of the flight. It felt very Dutch and also was a knick knack that was worth keeping. KLM is a carrier strangely unfamiliar to me, so their codes and traditions were somewhat new. Turns out this is quite a thing. Josh Barro explains:

It’s a souvenir gift from the airline, but more importantly, it’s a status symbol. If you have a row of them in your home or your office, it serves as a tasteful announcement that you fly KLM business class a lot.

This week, KLM announced the release of the 100th unique version of the so-called Delft Blue houses, to coincide with the airline’s 100th anniversary. Old houses are not discontinued; flight attendants present a tray with a variety of houses on each flight, and customers can use an app to track which houses they already have and which ones they need to collect.

Why is this interesting?

In a world full of digital points, devaluations, and eroding loyalty, the fact that KLM still does this is charming, and smart. There’s a small bit of status signalling involved, but it is also a physical token of the relationship between a carrier and its frequent passengers. 

Barro continues:

But I think KLM’s porcelain houses, first introduced in the 1950s, should be thought of as the physical, low-tech precursor to the status designations we see today. Long before airlines had smartphone apps with bar charts showing how far you had traveled this year — and how much farther you would have to go to be considered truly important to the airline — KLM was giving passengers the figurines they needed to form a physical bar chart demonstrating their importance to KLM.

The key here is an emotional or nostalgic bond can be the thing that gets people over the line. It’s a tradition, and it’s a physical manifestation of how loyalty accumulated over time. This is a genius way to extend the point of loyalty programs, which is to try and ensure people choose you over competitors. Some part of that is making yourself a constant presence, which is why airlines run so much advertising, but this is a smart and relatively inexpensive way to ensure you occupy some physical, and in turn mental, space to encourage repeat purchase. The small blue and white figures add up to something more than their actual manifestation. (CJN

Chart of the Day:

As we approach the new NBA season, this is a great look at the various win projection models for each team. (NRB)

Quick links:

Thanks for reading,

Noah (NRB) & Colin (CJN)

PS - Noah here. I’ve started a new company and we are looking for our first engineer and designer to join the team. If you are one of those or know anyone who is great, please share. Dinner’s on me at a restaurant of your choice if you help us find someone.

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