"Loyalty plans are not about loyalty. It's about acquisition."
Airline credit card partnerships now generate more profit than the flights themselves, in some cases several times over. Every major U.S. carrier runs a co-branded credit card program built on similar swipe-fee mechanics. Why isn’t telecom capturing the same returns?
On this week’s episode of Zero-Touch Live, Geoff Hollingworth spoke with airline and telecom expert Roger Entner, founder of Recon Analytics, about how airline loyalty economics actually work and what telcos may be missing when designing their own strategies.
📺 The replay is available now below.
Where loyalty money actually comes from
Geoff and Roger unpacked the mechanics behind loyalty profit, zeroing in on how:
Credit card swipe fees fund airline loyalty. Airlines are earning upwards of 750% of profit from credit card mile sales with U.S. swipe fees running about 3% of a transaction. It is a difficult structure to replicate in Europe, where regulation caps fees near 1%.
Point-of-sale execution makes or breaks a card program. Roger pointed out that carriers rarely ask customers at the point of activation whether they want the co-branded card, leaving a built-in acquisition moment unused.
Bounty payments make the partnership mutual. Carriers and card issuers typically exchange $100 to $200 per signup, funding acquisition on both sides of the relationship.
Loyalty programs are built to acquire, not retain. Roger cited survey data showing price as the top reason for leaving among roughly 40% of customers overall, but that figure drops to 25% among those actually planning to leave within three months, as cost drives decisions for otherwise happy customers.
Rakuten's model an example of rewarding breadth over spend. Whereas airline and card programs reward how much a customer spends, Rakuten rewards how many services a customer uses, with churn dropping to a fraction of baseline when customers use three services instead of one.
Can improved execution discipline at more customer touchpoints change telecom’s loyalty fortunes? What are other factors and considerations as new growth strategies are crafted? Learn more in the Rakuten Symphony 2026 Industry Growth Report, available now as a free download.
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