As Virgin Australia’s Velocity Frequent Flyer arm ticks past the 8 million member milestone, CEO Karl Schuster is ready to shift gears from adding new members to helping existing ones climb the status ladder.
“We’ve had a big focus on acquisition over the past 12 months, we’ve added roughly 1.5 million new members,’ the affable Irishman told Australian Business Traveller on the sidelines of the airline's launch of its Melbourne-Hong Kong route.
“Our focus now will be on helping those members move up through the tiers so they can enjoy not only the points ‘earn and burn’ but unlock the benefits of status.”
Part of that will come down to better communications on Velocity’s part, Schuster says.
“We need to communicate program features which help people reach the next tier faster, through unique features like Family Pooling which enables some people to rocket through to Gold and then up to Platinum, but maybe not enough people know about that.”
Going for Gold
Many frequent flyers in both the Qantas and Virgin Australia loyalty schemes also consider Gold to be the ‘sweet spot’ at which they consider switching their flying to the competitor in order to enjoy Gold status with both airlines.
Schuster agrees that given the size of each airline’s frequent flyer schemes – 8 million members for Velocity and closing in on 12 million for Qantas, with Australia’s entire population at 24 million – “there'd be a very high degree of overlap (between the two airline schemes).
“Among the savvy frequent flyers and loyalty members there will be a cohort who want to spread their business around, that’s not unusual – but we obviously want to direct them more to us, so we want to develop the very best proposition for frequent flyers and get more business from those customers who do split their flying.”
At the same time, Schuster reflects “I don't want to lose any of our Gold members, or any of the business that they generate, to another airline.”
“We need to do a better job when somebody reaches Gold to say ‘do this, this and this and you’ll get to Platinum’, and here are the extra benefits you’ll enjoy.”
Virgin's 'secret' Qantas Gold status match
That said, Schuster is happy to take Gold frequent flyers off Qantas’ hands
And do do that, he reaches for Velocity’s Pilot Gold – a status match against Qantas Gold or Platinum which offers core Velocity Gold benefits such as priority check-in, boarding and lounge access for three months.
Only one Virgin Australia flight and 80 Velocity status credits – achievable with a one-way business class flight between the east and west coasts, or a return trip in full fare economy – is then needed to covert the Pilot Gold trial into full Velocity Gold status for an entire year.
“We’ve been using Pilot Gold quite a lot in recent times and have seen some really strong results in terms of changes in flying behaviour, revenue generation and engagement.”
“It’s a strong proposition and it’s not unusual for me to grant it, but we scrutinise requests quite closely and try to use (Pilot Gold) in a very strategic way because it’s using airline assets.”
“You know what the lounges are like at peak periods, so it’s not something we throw around the place – we use it smartly and judiciously, in a very thoughtful way.”
David Flynn travelled to Hong Kong as a guest of Virgin Australia