The Advantages of Loyalty Programms for Customers. A Case Study of the Lufthansa Miles & More Programm

Table of Contents

1 Introduction

1.1 Research Question and Methodology

1.2 Definition of Customer Loyalty and Loyalty Card

1.3 Different Types of Loyalty Programs

2 Lufthansa’s Miles & More Program

2.1 The History of Lufthansa’s Miles & More Program

2.2 The Network of Star Alliance

2.3 Ways of Earning Miles in Lufthansa’s Miles & More Program

2.4 Ways of Spending Miles in Lufthansa’s Miles & More Program

2.5 Status Levels for Members of Miles & More

2.6 Customer Data Protection and Miles & More

3 Frequent Flyer Satisfaction Survey: Lufthansa’s Loyalty Program

3.1 The Survey as a Method of Data Collection for Empirical Research

3.2 The Design of the Survey

3.3 Data Collection of the Survey

3.4 Discussion of the Collected Data

4 The Most Important Advantages for Frequent Flyers

4.1 Free Executive Lounge Access

4.2 Free Amenities Attract Frequent Flyers

4.3 The Feeling of Being a Special and Important Customer

4.4 The Priority Pass as an Alternative Lounge Access Program

4.5 The Importance of Collecting Miles is Decreasing

5 Suggestions for Improvements to Lufthansa’s Miles & More Program

5.1 Change in the Earnings Ratio of Miles

5.2 Enhancement of Spending Miles and Reward Value

5.3 Introduction of New Benefits for Frequent Flyers of Miles & More

5.4 Improvement of Customer Satisfaction with Miles & More

6 Conclusion

Research Objectives and Themes

This thesis examines the effectiveness of customer loyalty programs within the airline industry, specifically focusing on Lufthansa’s "Miles & More" program. The primary research question addresses what benefits are most valued by frequent flyers and how these perceptions influence customer loyalty in an increasingly competitive market dominated by low-cost carriers.

• Analysis of customer loyalty definitions and program structures.
• Evaluation of the Miles & More earning and redemption mechanisms.
• Empirical survey of frequent flyer satisfaction and benefit preferences.
• Assessment of the importance of lounge access versus mile accumulation.
• Strategic recommendations for enhancing program appeal and customer retention.

Excerpt from the Book

Summary of Chapters

1 Introduction: Introduces the research question regarding airline loyalty and outlines the methodology, including the rationale for an empirical survey.

2 Lufthansa’s Miles & More Program: Details the program's history, the Star Alliance network, and the mechanics of earning and spending reward miles.

3 Frequent Flyer Satisfaction Survey: Lufthansa’s Loyalty Program: Describes the design, execution, and analysis of an empirical survey conducted among frequent flyers.

4 The Most Important Advantages for Frequent Flyers: Identifies and analyzes the key benefits valued by members, highlighting lounge access as the most significant factor.

5 Suggestions for Improvements to Lufthansa’s Miles & More Program: Proposes strategic adjustments to the earning ratios, reward values, and overall customer experience to improve satisfaction.

6 Conclusion: Synthesizes the findings and reinforces the importance of evolving loyalty programs to meet customer expectations.

Keywords

Lufthansa, Miles & More, Customer Loyalty, Frequent Flyer Program, Star Alliance, Reward Miles, Executive Lounge, Customer Satisfaction, Airline Industry, Loyalty Cards, Data Protection, Service Quality, Revenue-based Model, Empirical Survey, Retention Strategies

Frequently Asked Questions

What is the core focus of this thesis?

The thesis focuses on analyzing the effectiveness of Lufthansa’s "Miles & More" loyalty program and determining which benefits are most valuable to frequent flyers to prevent customer churn to competitors.

What are the primary themes discussed?

Key themes include the shift from mileage-based to revenue-based earning models, the high value placed on airport lounge access, the complexity of reward structures, and strategies for improving member retention.

What is the main research objective?

The primary goal is to identify the most important benefits for loyal customers and to assess whether current program offerings align with these customer expectations.

Which scientific method was utilized?

The author utilized an empirical approach, conducting an online survey with 15 questions, which yielded 422 utilizable data sets from frequent flyers.

What does the main body of the work cover?

The main body examines the history and structure of Miles & More, presents detailed data from the participant survey, analyzes the value of specific benefits like lounge access, and offers recommendations for program improvements.

What keywords characterize this study?

Essential keywords include Lufthansa, Miles & More, customer loyalty, frequent flyer programs, Star Alliance, and reward miles.

How has the shift to a revenue-based model impacted users?

The transition to a revenue-based system for the Lufthansa Group means that award miles are now calculated based on ticket price rather than booking class, making it harder for economy travelers to accumulate meaningful rewards compared to premium travelers.

Why is lounge access considered the most critical benefit?

Survey data suggests that frequent flyers prioritize the "immediate" tangible benefit of lounge access—such as food, Wi-Fi, and comfort during layovers—over the more abstract or difficult-to-attain accumulation of miles.

What recommendations does the author make for the future of Miles & More?

The author recommends simplifying earning structures, introducing new flexible benefits like unrestricted business class upgrades, and incentivizing positive customer feedback to leverage the "advertising power" of satisfied members.