In early 1995, Lufthansa announced the expiry of all miles that had been earned 3 years and more before – “bad news” that received major media coverage and public attention. As a result, a wave of demand for free travel overwhelmed the airline.
This was when I was asked to move from my previous position within Lufthansa.
MoreWhat were the challenges
- First and foremost: recover customer service and restore trust in the programme
- Integrate with partner programmes within Star Alliance
- Turn Miles & More into a profitable business unit
The approach we took
- Created multiple and timed opportunities for members to ‘burn’ their miles and hence eliminate peaks demand on customer service
- Negotiated the integration of programmes within Star Alliance through initial harmonisation of accrual and redemption across the partner network
- Later also harmonised the up-tier qualification criteria within Star Alliance
- Introduced instant enrolment, simplified tier structure, and targeted emotional benefits
- Developed the sale of miles to airline partners to become a major generator of incremental revenue
- Resources: then 2 m members, 40+ staff, € 95 m budget
The results we achieved
- Turned lost call rate of 95% into 95% calls answered
- Laid the foundation for Miles & More to become Europe’s leading Frequent Flyer programme