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Why SIA quietly devaluing KrisFlyer miles isn't a surprise from a comms perspective

Why SIA quietly devaluing KrisFlyer miles isn't a surprise from a comms perspective

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Singapore Airlines (SIA) is devaluing its KrisFlyer miles. In an eDM sent to members about revisions to KrisFlyer redemption levels and stopover feature, the airline explained that the revision is done as part of its ongoing review of the KrisFlyer programme.

From 5 July onwards, upward adjustments within an average increase of 10% will be made to award and upgrade levels on SIA flights. This change also concerns award and upgrade levels on flights operated by Star Alliance member carriers only, or in combination with flights operated by SIA. The adjustments will also be made to award levels for flights on its partner airlines. 

Meanwhile, SIA explained that stopovers for eligible redemption bookings ticketed on or after 1 August 2022 will be limited to a maximum of 30 days. Complimentary stopovers exceeding 30 days, as well as the paid stopover option, will no longer be available for tickets issued on or after 1 August this year.

The eDM, which was signed off by Ryan Pua, VP, loyalty marketing, said that these changes were made after very careful deliberation, taking into account higher costs, and are necessary to ensure the KrisFlyer programme remains sustainable.

"We are committed to providing our members with more ways to earn and redeem miles, both in the air and on the ground, and to providing greater value to your KrisFlyer membership, through regular enhancements to our programme offerings and benefits. We would like to thank you for your continued support for the KrisFlyer programme," the email read. SIA also included a link in the eDM for more information about the revised awards and upgrade charts.

Statistics from Meltwater from 7 to 8 June indicated that there were few reports on the changes by Singapore's mainstream media outlets, with only CNA938 covering the news during that period. However, The Straits Times did publish a piece just today concerning the revisions. A Google search by MARKETING-INTERACTIVE found that most of the reports were by travel trade websites.

That said, the news did cause some chatter on HardwareZone, with one member sharing details about the KrisFlyer miles revision while another called SIA "damn sneaky" for devaluing miles when the world is opening up. Another netizen seconded this opinion, stating that the airline is still charging more despite having received support from consumers during COVID-19. However, other netizen defended SIA, explaining that the miles devaluation is "somewhat expected".

The total mentions for Singapore Airlines and KrisFlyer on 7 and 8 June jumped to 77 as there was an average of 39 mentions daily. The number of mentions spiked on three occasions: 7pm and 10pm on 7 June and 11 am on 8 June. According to Meltwater, the top keywords included "world opening", "Krisflyer redemption", "basic economics", "award seats", and "current prices", among others. The majority of the mentions came from Singapore followed by Australia and Malaysia. Most of the people were neutral (84%) about the news. Only 7% had positive and negative sentiments respectively.

meltwater krisflyer keywords

A check by MARKETING-INTERACTIVE found that aside from the eDM and information on SIA's website, no other forms of communication were sent out. No announcement about the KrisFlyer miles revision was made on social media, neither was a notification sent out on the SIA app. When asked about its communication strategies for this announcement, SIA's spokesperson confirmed to MARKETING-INTERACTIVE that the revision to redemption award and upgrade levels were announced to KrisFlyer members through eDMs and its website. 

"While we are unable to share specific details on our customers’ feedback, we remain committed to enhancing the KrisFlyer programme so as to provide greater value to our PPS Club and KrisFlyer members," the spokesperson added.

Kevin Kan, chief experience officer of Break Out Consulting Asia, explained to MARKETING-INTERACTIVE that SIA "tends to be a conservative organisation". Hence, news about increasing the points required to redeem a flight is not something the airline would want to put out on social media to avoid public backlash. Especially with recent reports about overcrowding at its SilverKris lounge at Changi Airport Terminal Three.

"Having direct communication with current members via eDM on points changes is more appropriate as it only impacts members and not the general public. SIA is very conservative so not announcing it on social media is consistent with the conservative corporate culture," he said.

Meanwhile, delivering bad news is something that leaders and organisations would have to deal with at some point. While there may be several valid reasons as to why certain decisions were made or why the news was shared, Jeffrey Lim, founder and MD of 8traordinary, said how the news is being delivered will have an impact on how the receiver perceives and reacts. "It's in those times that it will be remembered for a long time, whether it is positive or negative," he added.

According to him, there are four factors that can be considered in SIA's case, the first of which is to craft a message to demonstrate how sincere, genuine, and empathetic the airline is in having to make such a decision compared to just informing customers.

The next would be the clarity of its message and to "provide as much information as possible". Quoting British-American author Simon Sinek, Lim said more information is always better than less, adding:

When consumers know the reason things are happening, even if it's bad news, they can adjust their expectations and react accordingly. Keeping people in the dark only serves to stir negative emotions.

SIA should also allow more time and use more communication channels so information can be disseminated in time to members and allow them to digest it. At the same time, Lim said that SIA should provide a channel to collect feedback so members feel they are being heard as well. Aside from providing charts about the revisions, SIA currently has an FAQ section on its website that addresses questions including the type of changes to redemption awards booked and ticketed on or after 5 July. 

Meanwhile, Carolin Chan, VP, strategy and marketing at PRM Marketing Services, an agency that specialises in B2B2C loyalty relationship marketing, told MARKETING-INTERACTIVE that while there was an email communication about the changes, it was however not very clear on the actual or true devaluation from the programme overall earn and redeem perspective. "However, it is an inevitable change as with all loyalty rewards and programmes," Chan said.

Chan added that a follow-up email would have been good with clear indications or simulations for better understanding. That said, she said that an announcement on SIA's website or app is good enough. "This concerns programme participation which would be more of a one-on-one notification and not a mandatory social shout-out," she said, agreeing with Break Out Consulting Asia's Kan.

Similarly, direct mailers are also sent to consumers on a personalised basis to address key terms and conditions changes. Citing UOB as an example, Chan said when the UOB One Account reduced its interest rate, no social media announcement was made as well. There were, however, follow up calls to assist users on other ways to increase the interest rate. 

"While change is inevitable, brands can focus on other holistic benefits to bring value to their rewards and programmes," she said. That said, Chan agrees that social shoutouts can help to bring emphasis to the programme which can be a better brand positioning and achieve better reach, adding:

Audiences today are used to having omnichannel messaging so that would be a key reason. However, focused communications should still be one-on-one for a better context of the topic.

Also weighing in on the conversation was Tarun Deo, founder and MD of Progressive Communications, who said that changes made to loyalty programmes by airlines, in general, are unfortunately not a one-off occurrence. Hence, any milestone communication to customers requires three key elements: Context, transparency, and process.

In this instance, SIA should communicate why KrisFlyer is making a recalibration and show an example of how this impacts customers moving forward. Next, the revisions need to be executed well, Deo added. "Sadly, it seems to be a trend that companies take customers for granted and this creates the disappointment, frustration and angst that damages goodwill and reputation," he said.

Why this shouldn't come as a surprise

This news might have come as a shock to consumers, especially since the world is opening up and travel is resuming. However, Break Out Consulting Asia's Kan said many airlines worldwide, including SIA, have made adjustments to their loyalty programmes over the years. Hence, this revision should not come as a surprise. 

What led to these revisions, Kan said, is likely the opportunity to reduce the miles balance in member accounts. "People have not travelled in over two years and SIA has been very gracious and rolled over miles which would ordinarily have expired during the pandemic. The airline has also maintained status for its top-tier travellers," he explained.

Consumers were also doing plenty of online shopping during the pandemic, racking up credit card points to transfer to their frequent flyer accounts. "This revision is a great opportunity to burn miles and reduce the balances in member accounts," he added. 

On average, Kan said the mileage requirement changes are between 10% to 12% so SIA's latest move is not a massive one. "Lock in your flight before the devaluation takes place. It's a great way to plan ahead," he said. 

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