Do Customer Loyalty Programs Really Work in Airlines Business?—A Study on Air Berlin

Abstract

Programs to secure customer loyalty have been used by marketers for many years. However, how effective are these programs? More than 50% of marketers said that their loyalty budgets rise during the past two years, while only 10% saw a reduction in budget. This reflects the increase of loyalty programs attracting frequent buyers for everything from food to clothing to entertainment. The main aim of this paper is to identify what extends customer loyalty program work in customer retention, customer engagement, and revenue generation in airlines business taking example of Air Berlin. This paper adopts a single case study design. Relationship management and customer loyalty theory are the theoretical foundations used for evaluation of the aspects of loyalty program effectiveness. It is concluded that though Air Berlin has been successful so far to implement their customer loyalty programs, retaining the customer loyalty can only be possible by being competitive over the other players in the market because customers will look for alternatives on the basic services and that reduces the influence of the drivers that keeps the customers loyal to one single company.