IAPA Gets Good Mileage From Premiums

International Airline Passengers Association (IAPA) is a membership organization that caters to the needs of frequent business travelers by providing special group discounts on hotel accommodations, car rental and travel accident insurance, in addition to advocating for the rights of airline passengers. It mails approximately 2 million international acquisition pieces per annum, and currently has 400,000 active members worldwide.

During the 15 years Daniel Rutenberg has worked as IAPA’s director of marketing, the marketer has always used a premium. Here, Rutenberg shares his insights on which premiums have worked for IAPA and why.

Target Marketing: What premiums are you offering, and do you offer the same premium in every market?

Daniel Rutenberg: In the United States, we offer a free companion airfare certificate when members join. We only provide that [premium] in the United States [due to] the conditions of the companion certificate. Regulations prohibit U.S. travel agents from issuing tickets outside the United States. We’re looking for a similar product [in other markets], but we haven’t come across one yet.

Worldwide, we provide a 15-percent discount off the first year of membership, and in Latin America we offer free airline miles.

TM: What premium tests have you conducted?

DR: A few years ago, we offered a hard premium that was a timetable for scheduled flights. When we tested it against a package with no schedule, the people who didn’t receive the timetables—to our surprise—responded better. When we did an analysis by market, however, we found our original conclusion was incorrect, and that some markets pulled better than others. The timetables were not comprehensive in certain markets, and therefore, the potential member didn’t see the value. Where we had coverage and flight data at the time, the premium had tremendous value. We also learned that not all premiums have the same perceived value in every market.

In Latin America we’ve tested airline miles vs. a 15-percent discount off the first year of membership, and the free miles have outperformed any other offers we’ve done. We believe the main reason behind this is that the miles are an added value and an aspirational benefit, particularly since we’re offering up to 10,000 free miles.

—Lisa Yorgey Lester