Losing elite status in an airline or hotel loyalty program doesn’t mean a member is done travelling—or done with your brand.
Too often, brands treat every downgraded member the same, missing a critical opportunity to retain high-value customers. By understanding the distinct profiles of downgraded elites, loyalty programs can tailor retention strategies to keep the right members engaged and spending.
Here’s how downgraded elites typically break down:
Category 1: Reduced Travel
These members are travelling less due to life changes (e.g., new job, family priorities) and lack immediate opportunities to fly or stay more. They may be harder to re-engage without significant lifestyle shifts.
Category 2: Still Travelling, But Missing Status Thresholds
These members are active travellers but didn’t meet status criteria, perhaps due to one-off trips that boosted them to elite status the prior year. They’re still in the air or at hotels, spending with competitors, and highly motivated to retain status with the right incentives.
Category 3: Actively Travelling, Splitting Loyalty
These frequent travellers mix airlines or hotels, often prioritising another brand where they hold a higher status. They have the means to spend more but are choosing competitors, making them prime candidates for targeted retention efforts.
The Opportunity: Focus on Categories 2 and 3
Members in Categories 2 and 3 are still flying and spending, often with higher status elsewhere. They want to retain your program’s status but need compelling reasons to shift their loyalty back. A one-size-fits-all downgrade notice (“Sorry, you didn’t make it”) alienates these valuable customers, pushing them toward competitors.
What Smart Loyalty Programs Should Do
Segment Downgraded Members: Use data to identify which category a member falls into based on recent travel patterns and spending behaviour.
Offer Tailored Retention Paths: For Category 2, provide achievable challenges (e.g., “Fly X more segments this quarter to retain status”). For Category 3, sweeten the deal with bonus points or exclusive perks to outshine competitors.
Personalise Communications: Acknowledge their past loyalty and show you value their business with customised offers, not generic farewells.
Why It Matters
Retaining active, high-value members in Categories 2 and 3 drives long-term program health. These travellers are already spending—don’t let them spend elsewhere. By moving away from blunt downgrade policies and embracing targeted retention strategies, airlines and hotels can keep their best customers engaged, loyal, and invested in the brand.
