A Bachelor's Thesis conducted for a major Finnish airline concerning its relationship marketing strategy

1. THE EFFECTS OF DIFFERENT STATUS LEVELS IN
AIRLINES’ FREQUENT FLYER PROGRAMS ON
CUSTOMER LOYALTY AND SERVICE EXPECTATIONS
Case of Finnair Plus

2. Backround
• Currently there is fierce competition between airlines
– High fuel costs
– Low-cost airlines
• High importance of customer loyalty and retention in the
airline industry.
 Frequent Flyer Programs
- Rewarding loyal customers with free tickets,
upgrades etc.
• Many studies show that customer satisfaction and loyalty lead
to customer retention.

3. Research Questions
• 1. Do frequent flyer programs’ different status levels influence
customer behavior in terms of loyalty and commitment?
• 2. Is there a difference in frequent flyer programs’ members’
expectations of service quality between high and low status
levels and are they as easily satisfied?
• 3. How keen loyalty program members are about their
membership statuses and what are the effects on customer’s
loyalty towards the airline when dropping from high-status
level to a lower status?

4. Conceptual Framework
• Measuring customer loyalty – Customer loyalty score
– Customer loyalty = Satisfaction x Recommendation x Retention
• Net Promoter Score - Used to gauge the loyalty of a firm's
customer relationships
• SERVQUAL
– Calculates the gaps between service expectations and
experiences
– Five service dimensions
(Tangibles, Reliability, Responsiveness, Assurance, Empathy
)

5. Methodology
• Case Study – Finnair Plus
• In-depth interview
• Customer Survey
– Designed to find out customers’ loyalty and service
expectations towards Finnair.
– Aim to collect at least 20 responses from each status level.
– Carried out April 11. in Helsinki-Vantaa airport’s lounges
and terminals.

6. Main Findings – Customer Loyalty
• Weighted Customer Loyalty Scores:
– Gold: 36
– Silver: 23,3
– Basic: 13,7
 The higher one’s tier level, the more loyal one is
towards Finnair.

7. Conclusions
• High-valued customers are more loyal than
low-valued.
• It cannot straightly be concluded that
frequent flyer program’s member’s service
expectations rise with the status level
• High-status members demand different types
of service than low-status members