Case study: HK Express
HK Express is Hong Kong’s only low-cost airline, with a fast-growing network to over 20 destinations in Japan, Korea, Southeast Asia, Taiwan and China. It is a part of the Hainan Airlines (HNA) Group. The airline transitioned from a full-service to a low-cost model and introduced a new brand identity in 2013.
Fresh from its re-branding, HK Express wanted to make itself more familiar to young and emerging affluent leisure travellers and wished to establish itself as the airline of choice among them over time. It needed a loyalty strategy that complemented their new identity, network and target customers.
In developing a “greenfield” programme, our approach was straightforward:
We interviewed management to gather opinions and to build consensus on what their problems and strategic objectives were.
We audited the available data to understand their existing customer behaviour and establish a baseline for the financial model.
We built a baseline programme proposition as a starting point for discussion with the management’s loyalty team.
We conducted financial modelling and developed a high-level business case for the programme for their evaluation and approval.
We developed the detailed programme design including currency valuation and rewards structure, marketing and branding development, and finalised the financial model with the detailed design costs and benefits.
Finally, we conducted a vendor RFP and selection, supervised the programme’s technical development and systems integration, and co-developed the marketing and branding strategy for launch.
The total engagement from initial business case to launch of the programme was about 18 months, of which 10 months was initial analysis and programme design modelling, and 8 months was RFP and programme development.
We designed and introduced reward-U, the loyalty programme for HK Express, in April 2016. With a revenue-based earning structure (including earning on ancillary purchases), flexible redemption rules, and simplified membership terms & conditions, it was a game-changer for HK Express and the Hong Kong market.
The programme has exceeded both member and partner acquisition forecasts, gaining over 600,000 members in its first year of operation as well as a long and growing list of non-airline partners.
Loyalty Advantage is viewed by reward-U as a true business partner. As a testament to our successful collaboration with the client’s team, we continued to partially manage the programme with reward-U up to end-2017, including:
Operation of the programme
Management of the programme’s vendors
Partnership strategy and implementation
Growth strategy, such as programme evolution and member engagement