Loyalty is Broken: Porter Airlines and Zero Switching Cost
by Steve Bocska
Steve is the CEO and founder of PUG Interactive Inc., a company specializing in maximizing lifetime customer value through relationship orchestration. With over 20 years of experience in the gaming industry, Steve focuses on applying loyalty, engagement, and gamification to enhance user experiences in non-game contexts.
In August 2023, Porter Airlines introduced a brilliant strategy that shows the loyalty industry’s vulnerability to disruption.
The airline announced a program to match passengers’ statuses from the competing Aeroplan points program with its own VIPorter loyalty program. This masterstroke effectively allowed existing Aeroplan members to seamlessly vault themselves over to VIPorter and into the same status as they were at Aeorplan, but without having to spend any of the time, money and effort to climb the program’s ranks. To participate, customers simply signed up for a free VIPorter account and submitted their Aeroplan details online. Upon receiving VIPorter status, passengers were immediately recognized at the corresponding tier and could enjoy a range of benefits, including priority standby, expedited security, early boarding, seat selection, and checked baggage. VIPorter points would also accumulate in addition to the credits customers had earned through their Aeroplan status, effectively extending the incentive for them to switch.
This move is a massive customer acquisition shortcut for Porter Airlines. By enabling a seamless transition from Aeroplan to VIPorter, the airline effectively sidestepped the conventional switching costs that often deter customers from changing loyalty programs. This removal of a significant barrier streamlines the decision-making process while simultaneously demonstrating Porter’s commitment to providing a frictionless, customer-centric experience. Ultimately, Porter’s strategy presents a compelling proposition to customers seeking easy transitions and enhanced benefits.
By hijacking Aeroplan’s program and eliminating switching costs, Porter is showing the industry that it is possible to disrupt the loyalty landscape by making it easy for customers to reconsider their existing affiliations. This should challenge established norms, and will surely prompt other loyalty programs to reevaluate their own customer onboarding processes in response – and perhaps even question their ongoing investment in their existing loyalty programs.