Change is exciting for some, frightening for others.

Today, one of the biggest global brands in the Loyalty Marketing business changed its name. Groupe Aeroplan has become Aimia.

I can’t imagine what it takes to plan such a change, as the stakes are high and the implications, while seemingly subtle to some, are immensely significant to the broader market. Changes of this nature are not done because someone decided it was time for a new logo, or that there was need to “freshen up our image”. To make a change of this nature, there has to be a core message that is being delivered to the market, and the message is one that couldn’t be adequately delivered under the former branding.

So, what’s the message?

First, listen to what Aeroplan, er Aimia is telling us. In a branding fact sheet, they make clear that the names of the well established coalition loyalty programs they operate (Aeroplan, Nectar (Chile, Italy and the UK) and Air Miles Middle East) will not change. Clearly the new image and branding is not targeted to consumers.

The business-to-business brands LMG Insight & Communication and Carlson Marketing, however, will operate under the Aimia name. Retiring a long-tenured name like Carlson is a bold move.

As press releases and brand sheets explain, the new name is “inspired from the word ‘aim’: highlighting focus and precision, describing our expertise in targeting the right consumers with the right messages”. The name also has roots in French words which inspire the importance of friendship, partnership and relationships. The brand essence here is compatible with the core tenets of loyalty marketing and lays the foundation to build in many different directions.

There are a few other interesting aspects to the new brand. The tagline is “Inspiring Loyalty” and there is intent to point towards the sweet spot where “the needs of clients and the wants of consumers overlap”.  As Aimia states in its new website, “we see relationships differently”.

I think very soon, we will see the landscape of global loyalty quite differently. Airmiles recently announced expansion of its Dotz program in Brazil, and American Express purchased Loyalty Partner at the end of last year.

Through its rebranding, Aimia has further distanced itself from its frequent flyer roots and sets the stage to become the dominant player in creating coalition and other forms of loyalty programs around the world. Global leader has a nice ring to it. Airmiles and American Express won’t stay silent for long but, for now, Aimia has created a nifty advantage to achieve its longer term goals.

Almost 10 years ago, I wrote an opinion piece for COLLOQUY questioning whether Frequent Flyer miles were still the most valuable currency in the Loyalty Marketing landscape.  The premise was that the weakening value of the FF mile might open the door for a better offer to capture the loyalty imagination of consumers. The next best high-value loyalty currency was thought to be coming from a US based coalition ala Nectar or Airmiles.

It’s 2009 and time to ask the question once again.

Consumers and the press are piling on with criticism of airline mile programs. Combine the higher thresholds for cashing in for a free ticket, the seemingly steady decline in the quality of in-flight experience, and the airline’s fascination with un-bundling and charging for services that used to be included in a ticket price and it’s easy to make a case for the demise of FF miles.

The COLLOQUY article was cautious in criticism of the almighty MILE, noting that “Americans are so attuned to earning airlines miles that it’s hard to create a value proposition, either in a standalone program or in a coalition, that can equal them.”

Time and change go hand-in-hand however and the challenge of creating that value proposition to match or exceed the perceived value of an airline mile might be easier to tackle as each month goes by. A recent Wall Street Journal article “Air Rescue: Saving Miles From the Ax” highlighted the many ways which airlines are adding restrictions and tweaking program rules to burn more miles before they can be used.

Many of the rule changes highlighted in the WSJ article are activity related and American Airline’s change from no expiration to an 18 month activity related rule has garnered lots of attention. There are two sides to every story and, if you were running AAdvantage or any other big loyalty program, you too would be under pressure to manage program liability more closely. It’s easy to see why stewards of loyalty programs conclude that customers who have not transacted for 18 months are maybe not your customers any more.

The flaw in the activity rule highlights the dirty secret of airline mile programs: that customers are less loyal to a particular airline than the industry would like to believe and carrier choice is often dictated by lifestyle and business changes more than brand affinity.  I’ll share a personal example. At one time, most of my my travel was in Latin America and I was a privileged flyer with American. Later, the work load swung to the US and I rose in the ranks of Delta Skymiles members while I watched my American status diminish. When I ventured back into LAC, I had lost my status with the airline and had to be patient until I became “visible” again.

The airlines should be able to recognize me as an inherently valuable customer and provide some relief for my straying. Through the data collected, the airlines could identify my return, send me a welcome back email and inquire if I was here to stay. I bet most people would respond to such an email with indication of preferences and plans if they were offered incentive to provide the information. That incentive, of course, would be to have the opportunity to earn accelerated status with the airline. In the current situation, I am more tempted than ever to just shop by schedule, price and airport location.

The other main criticism of airline miles is that they are difficult to redeem.  If you’re like me and redeem miles to take the family to exotic destinations like Buffalo or Cleveland, you’ll never have a challenge redeeming your miles. Try to go to New York for Christmas and you’ll have a different story to tell.

It’s possible that the airlines are their own worst enemy. They have given miles to everyone and are still inviting people to join their programs with in-flight announcements. Even the Economist agreed that this non-selective behaviour would spawn MILE inflation:

“Miles outstanding have risen by an average of 20% a year since 1995 – two-and-a-half times as fast as the supply of dollars.”  Equating this inflationary expansion of airline currency to a key global currency, the article continued, “central bankers would suffer sleepless nights at such reckless  monetary expansion were it not for the fact that they are usually up in first class collecting double or triple miles.”

The state of the FF mile is really quite a mess. There are diverging forces at work: Consumers are less interested to wait and accumulate miles as they know that rules will continue to shift against their interests and their ability to redeem will be challenged. At the same time, the cost of using miles to promote a cobrand or reseller relationship is probably the highest among options in the marketplace.

Invest the same cost per mile into a value proposition that promotes YOUR brand and is truly tailored to YOUR customers and quite likely you will have constructed a value proposition that beats the heck out of FF miles.

Turbulent times for the airlines, opportunistic times for smart marketers……

In the beginning, there was Air Miles. Actually, according to history, it was three men in a room that started Air Miles.

According to Air Miles corporate history, Keith Mills wasn’t one of those three guys, but somehow later it was Sir Keith Mills that sowed the seeds of the Air Miles brand and business model across continental Europe. Eventually, Sir Keith helped to found Nectar, the successful coalition loyalty program based in the UK.

There is a passage in Exodus when God tells Abraham that “I will make your descendants as numerous as the stars in the sky and I will give your descendants all this land I promised them, and it will be their inheritance forever.”  I am tempted to make a tongue-in-cheek analogy between Abraham and Sir Keith, though the family tree is becoming quite muddled at this point in time and the coming battle between Air Miles and Groupe Aeroplan will ensure that no-one’s inheritances comes easily.

Aeroplan, the spin-off of Air Canada’s frequent flyer program, has not been satisfied to improve its core business, but has set about acquiring loyalty schemes around the world, the most notable of which, until yesterday, being Nectar. Air Miles, to its credit, has apparently been eyeing expansion opportunities and recently announced that it has made a 29% investment in Dotz, the evolving coalition program in Brazil.

Yesterday, Aeroplan announced its planned acquisition of Carlson Marketing. It is not completely clear what the US$188 Million price tag purchased, but presumably Aeroplan has just strengthened it capabilities in offering a complete processing and operational solution for the large companies it is seeking as potential clients. It has also significantly added to its strategic planning abilities assuming that Peppers & Rogers is included in the deal.

The announcement will get the attention of the Air Miles folks in Toronto and its subsidiaries LoyaltyOne & Colloquy will increasingly feel competition in a sandbox that was nearly their own to play in until now. Half the residents of St. Louis will stay awake at night as well as Maritz, MasterCard and others seeking the crown of “leading loyalty solutions providers”  find themselves up against stiff competition and deep pockets.

What is means for the rest of the industry will be sorted out over the coming months. One message that is clear is that there is money to be made in Loyalty Marketing, especially if you are the owner of a currency that becomes valued by consumers and is traded widely.

There is also that the likelihood that consolidation will breed greater need for independent viewpoint, analysis and recommendation. Corporate executives making decisions with long term financial implications would be well served to evaluate the source of their advice.

Aeroplan and Air Miles trace their roots back to the same family tree in many ways. Let’s see what kind of family feud will brew now that Aeroplan has upped the ante of the game.

In the beginning, there was Air Miles. Actually, according to history, it was three men in a room that started Air Miles.

According to Air Miles corporate history, Keith Mills wasn’t one of those three guys, but somehow later it was Sir Keith Mills that sowed the seeds of the Air Miles brand and business model across continental Europe. Eventually, Sir Keith helped to found Nectar, the successful coalition loyalty program based in the UK.

There is a passage in Exodus when God tells Abraham that “I will make your descendants as numerous as the stars in the sky and I will give your descendants all this land I promised them, and it will be their inheritance forever.”  I am tempted to make a tongue-in-cheek analogy between Abraham and Sir Keith, though the family tree is becoming quite muddled at this point in time and the coming battle between Air Miles and Groupe Aeroplan will ensure that no-one’s inheritances comes easily.

Aeroplan, the spin-off of Air Canada’s frequent flyer program, has not been satisfied to improve its core business, but has set about acquiring loyalty schemes around the world, the most notable of which, until yesterday, being Nectar. Air Miles, to its credit, has apparently been eyeing expansion opportunities and recently announced that it has made a 29% investment in Dotz, the evolving coalition program in Brazil.

Yesterday, Aeroplan announced its planned acquisition of Carlson Marketing. It is not completely clear what the US$188 Million price tag purchased, but presumably Aeroplan has just strengthened it capabilities in offering a complete processing and operational solution for the large companies it is seeking as potential clients. It has also significantly added to its strategic planning abilities assuming that Peppers & Rogers is included in the deal.

The announcement will get the attention of the Air Miles folks in Toronto and its subsidiaries LoyaltyOne & Colloquy will increasingly feel competition in a sandbox that was nearly their own to play in until now. Half the residents of St. Louis will stay awake at night as well as Maritz, MasterCard and others seeking the crown of “leading loyalty solutions providers”  find themselves up against stiff competition and deep pockets.

What is means for the rest of the industry will be sorted out over the coming months. One message that is clear is that there is money to be made in Loyalty Marketing, especially if you are the owner of a currency that becomes valued by consumers and is traded widely.

There is also that the likelihood that consolidation will breed greater need for independent viewpoint, analysis and recommendation. Corporate executives making decisions with long term financial implications would be well served to evaluate the source of their advice.

Aeroplan and Air Miles trace their roots back to the same family tree in many ways. Let’s see what kind of family feud will brew now that Aeroplan has upped the ante of the game.

Visitors to England usually have an easy to predict list of “must see” destinations during their stay. After coping with the adjustment to a different time zone, most are off to see Buckingham Palace, Big Ben, and the London Eye. With cultural needs somewhat satisfied, a bevy of High Street merchants are on the “shopping” list including Burberry’s, Fortnum & Mason, Harrods and Marks & Spencer, to name a few.

In these challenging economic times, one might assume that these big names might be viewed almost as touristic destinations with discounters being given the nod for actual purchases. That is not necessarily the case as the retail phenomena in the UK seems to favour the high and low ends of the market with only those mired in the middle encountering difficulty.

The grocery price war underway seems to reflect the trend as Asda; Wal-Mart’s European subsidiary is prospering while perennial market leader Tesco is seeking to re-establish its position by offering double points for the first time ever as part of its Club Card rewards program.

There appears to be a significant change in the UK Retail Fashion Market. Similar to the grocery retail sector, consumers are seeking bargains and the trend is for the low-price retailers (e.g. Primark, George at Asda, H&M) to enjoy growth in revenues, the middle-market retailers (e.g. Next, M&S) suffering a decline in sales whilst the high-end market is performing well with the likes of Hackett, Hugo Boss and Harrods showing significant results.

Over the past decade one of the most enduring trends on the UK high street has been price deflation. Fast and inexpensive fashion has become a fact of life for consumers used to being able to grab the latest looks at throwaway prices. The rise of value fashion has seen some of the biggest success stories of recent years with the likes of Primark, New Look and the supermarkets establishing cut-price clothing offers.

Retailers have been working with ever tighter margins to keep pace with the intense competition on price. But the global financial crisis has skewed a lot of the economic dynamics that made the rise of the value retailer possible, and now manufacturers, brands, retailers and consumers are all feeling an unprecedented pressure on finances.

The dramatic changes in the value of currencies, most notably the weakness of the sterling against the dollar and the euro, have meant that in the space of just a few months, suppliers and retailers have seen the cost of buying product (retailers typically buy in dollars from the Far East) rise significantly.

In this sector, Harrod’s posted surprisingly strong results as the Knightsbridge retailer owned by Mohamed Al Fayed said sales grew by 9% to hit a record £751.7m in the year to January 31.  For Loyalty Marketers, the news was good as well as the retailer commented that “take up of its loyalty card scheme had been strong over the period“.

Customer centric marketing combined with capital expenditure of £24m during the year were just a few aspects of Harrods’ secret to success. The fact that Harrod’s credits the loyalty scheme as a contributor to its recent success  tells us that Loyalty works among affluent shoppers as well as the mid-market. There is a similar case in the US, as Niemen Marcus continues to promote its “In Circle” program, generally rated as one of the best structured in the North American retail sector.

In other retail loyalty news, Debenhams withdrew from the Nectar Coalition Programme in 2008 as the relationship had failed to deliver an acceptable ROI for the leading UK department store.  I would suggest that Debenhams may have enjoyed greater success from the Nectar relationship if they had focused their Loyalty activities on Nectar rather than confusing customers by also offering their own Store Card Programme.

Nectar has now recruited House of Fraser and Next as new partners although points are only earned for online purchases. Marks and Spencer also operate a Loyalty scheme for their private label cardholders but also fail to recognise and thank other ‘loyal’ customers that prefer to pay cash or use another form of payment.

Across Europe there are numerous Fashion Retailer Storecard programmes offering rewards for consumers using high APR (average 19.9%) cards but seemingly ignoring the ‘invisible customer’ who may be a more valuable consumer.

It seems that Loyalty works with the affluent sector as in any other but, unlike the grocery market; Fashion Retailers are failing to create effective Customer Management strategies and only use Loyalty as a promotional tactic.

Visitors to England usually have an easy to predict list of “must see” destinations during their stay. After coping with the adjustment to a different time zone, most are off to see Buckingham Palace, Big Ben, and the London Eye. With cultural needs somewhat satisfied, a bevy of High Street merchants are on the “shopping” list including Burberry’s, Fortnum & Mason, Harrods and Marks & Spencer, to name a few.

In these challenging economic times, one might assume that these big names might be viewed almost as touristic destinations with discounters being given the nod for actual purchases. That is not necessarily the case as the retail phenomena in the UK seems to favour the high and low ends of the market with only those mired in the middle encountering difficulty.

The grocery price war underway seems to reflect the trend as Asda; Wal-Mart’s European subsidiary is prospering while perennial market leader Tesco is seeking to re-establish its position by offering double points for the first time ever as part of its Club Card rewards program.

There appears to be a significant change in the UK Retail Fashion Market. Similar to the grocery retail sector, consumers are seeking bargains and the trend is for the low-price retailers (e.g. Primark, George at Asda, H&M) to enjoy growth in revenues, the middle-market retailers (e.g. Next, M&S) suffering a decline in sales whilst the high-end market is performing well with the likes of Hackett, Hugo Boss and Harrods showing significant results.

Over the past decade one of the most enduring trends on the UK high street has been price deflation. Fast and inexpensive fashion has become a fact of life for consumers used to being able to grab the latest looks at throwaway prices. The rise of value fashion has seen some of the biggest success stories of recent years with the likes of Primark, New Look and the supermarkets establishing cut-price clothing offers.

Retailers have been working with ever tighter margins to keep pace with the intense competition on price. But the global financial crisis has skewed a lot of the economic dynamics that made the rise of the value retailer possible, and now manufacturers, brands, retailers and consumers are all feeling an unprecedented pressure on finances.

The dramatic changes in the value of currencies, most notably the weakness of the sterling against the dollar and the euro, have meant that in the space of just a few months, suppliers and retailers have seen the cost of buying product (retailers typically buy in dollars from the Far East) rise significantly.

In this sector, Harrod’s posted surprisingly strong results as the Knightsbridge retailer owned by Mohamed Al Fayed said sales grew by 9% to hit a record £751.7m in the year to January 31.  For Loyalty Marketers, the news was good as well as the retailer commented that “take up of its loyalty card scheme had been strong over the period“.

Customer centric marketing combined with capital expenditure of £24m during the year were just a few aspects of Harrods’ secret to success. The fact that Harrod’s credits the loyalty scheme as a contributor to its recent success  tells us that Loyalty works among affluent shoppers as well as the mid-market. There is a similar case in the US, as Niemen Marcus continues to promote its “In Circle” program, generally rated as one of the best structured in the North American retail sector.

In other retail loyalty news, Debenhams withdrew from the Nectar Coalition Programme in 2008 as the relationship had failed to deliver an acceptable ROI for the leading UK department store.  I would suggest that Debenhams may have enjoyed greater success from the Nectar relationship if they had focused their Loyalty activities on Nectar rather than confusing customers by also offering their own Store Card Programme.

Nectar has now recruited House of Fraser and Next as new partners although points are only earned for online purchases. Marks and Spencer also operate a Loyalty scheme for their private label cardholders but also fail to recognise and thank other ‘loyal’ customers that prefer to pay cash or use another form of payment.

Across Europe there are numerous Fashion Retailer Storecard programmes offering rewards for consumers using high APR (average 19.9%) cards but seemingly ignoring the ‘invisible customer’ who may be a more valuable consumer.

It seems that Loyalty works with the affluent sector as in any other but, unlike the grocery market; Fashion Retailers are failing to create effective Customer Management strategies and only use Loyalty as a promotional tactic.