Question

Case Study: Lufthansa’s Miles and More Program Lufthansa, Europe’s largest airlines, offers the Miles & More loyalty program which is a cooperation of the Star Alliance group and several other airline companies. Today, Miles & More has over 20 million members and is Europe’s leading frequent flyer program. The concept of the Miles & More program is quite simple. Everyone can subscribe for Miles & More which is free of charge. Members are able to collect three types of miles, award miles, status miles and HON circle miles. Award miles can be collected and used through all 250 partners. Second, status miles are collected through Star Alliance flights and some special partner airline flights. Status miles are necessary to move up status from the basic Miles & More status. Third, HON circle miles can only be collected through special airline partners and are a requirement for achieving the HON circle status which is the highest service and benefit level for Miles & More clients. Lufthansa uses its Miles & More statuses to distinguish different customer segments which are offered different benefits. The basic Miles & More status provides simple benefits like carrying golf equipment for free. In addition, the Frequent Flyer status includes benefits like extra luggage or access to business lounge on airports. Finally, HON circle members have the highest priority on waiting lists and a limousine transfer to the airplane. To become a Frequent Flyer 35,000 status miles need to be collected within a year, for Senator 100,000, and for HON circle 600,000 HON circle miles within two years. To promote the Miles & More program Lufthansa frequently offers special promotions to its members which give them the possibility to collect additional miles, for example via the purchase of special newspapers. In addition, members can acquire the Miles & More Master, Visa or American Express Card to collect miles for each Euro paid with the card. This enables members to collect more miles in shorter time period and to move up in status. In 2009, Lufthansa added its Miles & More MemberScout app to its portfolio where members can exchange experiences. With the launch of the app Lufthansa uses the opportunity to further strengthen its bonds with its customers through direct personalized communication.

Questions:
1. Is Miles & More rather a customer club or rather a customer card? Discuss this especially with regard to the MemberScout app launched in 2009. 2. List and describe briefly the different club types discussed in this chapter. If you consider Miles & More to be a customer club, which club type does Miles & More represent? Explain the typical objectives, services/benefits/characteristics of this chosen club type. 3. What other tools of customer relationship management would be appropriate for Miles & More to effectively enhance customer loyalty? Discuss potential marketing mix instruments (4 p’s) to use for customer relationship management (slide 15) as well as other customer relationship management tools