February 20, 2003

Uncoordinated Empires

Category: Aviation , Wildcard

Branson HQ: European "frequent flyer" programs generally offer dismal reward opportunities when compared to those in the US, where huge numbers of miles can be earned by using credit cards, phone companies, car rentals and a lot more. This is accomplished via agreements across a wide variety of industries, and has kept me flying United for years. I can only imagine Europe's lagging is because no one has bothered to try to coordinate anything, and the public is not accustomed to demanding much.

But what if a brand-based empire encompassing everything under one roof were already in place? You might expect them to head off the competition by setting up a massive rewards system to keep people inside their brand. For some reason, this is not the case.

The Virgin empire includes 3 airlines, a train system, credit cards, mobile phone services, music stores, and dozens of other obscurities. Despite this, there is not a single cross-over loyalty program in place. Taking a Virgin train does nothing for your Virgin Atlantic mileage account. Nor does choosing the Megastore over Tower Records. Virgin Express Airlines won't even talk to Virgin Atlantic or Virgin Blue.

As a frequent flyer junkie, perhaps I'm more sensitive to the issue than most, but had I been offered the opportunity to earn Virgin Atlantic miles, I would not have chosen Vodafone for my mobile, and I'd probably walk the extra few blocks to the Virgin Megastore for my CDs... By organizing a rewards system I think Sir Richard's empire could go even further than it already has. Expecting people to remain loyal just because the logo looks cool is not going to cut it.

Posted by Nick at February 20, 2003 5:44 PM


Interesting that comrade Nikoli is advocating greater coordination and cooperation among the corporate empires. This is what leads to your hated shoppes of sprawle, etc.

I'd say let these over-extended empires shoot themselves in the foot ... in the long run that would allow more flexible and creative companies to compete and create a niche.

Posted by: spencer at February 20, 2003 7:10 PM

Ha ha, fair enough. Though this particular industry has little to do with shoppes o sprawle. Anyway, I just want a free flight. =)

Posted by: Nick at February 21, 2003 10:38 AM

Interestingly Virgin is in no way an integrated empire. It's a series of franchises with Branson having different levels of control in each case

Take Virgin Cross Country Services in the UK (please... someone take them!). When British Rail was privatised a bunch of managers sidled up to Branson and persuaded him to finance them, use his brand and good (?) name and wrote him in on a share of the supposed profits (should they ever appear).

There are no ties to any other part of the Virgin 'Empire' as it doesn't exist, it's a shared brand. He just acts as an investment magnet while his credit rating is still good

Posted by: lobster at February 21, 2003 9:57 PM

I like the sound of these integrated loyalty programs. To me it sounds like software software software. A lack thereof is probably why they aren't better put together in the first place. I'll take two helpings and trip to the Bahamas.

Posted by: choppen5 at February 26, 2003 4:57 AM

You can use a Virgin credit card to earn frequent flyer miles. I've noted your comments.

Posted by: Dick Branson at March 18, 2003 7:11 PM