Air Miles has exceeded all its goals

[This article appeared in a supplement to Strategy sponsored by Loyalty Management Group.]Two years ago, the air miles program launched in Canada with 13 sponsoring companies and the goal to enroll 1.5 million households as air miles collectors.Today, with more than...

[This article appeared in a supplement to Strategy sponsored by Loyalty Management Group.]

Two years ago, the air miles program launched in Canada with 13 sponsoring companies and the goal to enroll 1.5 million households as air miles collectors.

Today, with more than 85 sponsors and 3.5 million participating households, the loyalty program has far surpassed the vision of its founders.

Air Miles International expects to be up and running in the Netherlands next year with Robert Gierkink, one of the people who helped set up the Canadian program, at the helm.

Opportunities are also being explored in Australia.

In Canada, the air miles program is run by Loyalty Management Group Canada based in Toronto.

Last November, a regional office in Calgary was established in order to maintain lmg’s close ties to sponsoring companies, as well as with air miles collecting consumers.

Air Miles International, the parent company of Loyalty Management Group Canada, was started in 1988 in the u.k. by Keith Mills, chairman of the board, Liam Cowdrey and Allan Dellar, who soon discovered the concept was one with worldwide potential.

In 1989, Mills moved one of his top executives, Mike Beaumont, to Orlando, Fla. to start Loyalty Management Group and begin to negotiate North American airline contracts.

Mills himself moved to Boston early in 1991 to start the task of developing sponsorship relationships with u.s. companies, and, in April of that year, hired Craig Underwood as president of Loyalty Management Group Canada.

Underwood began laying the groundwork for the Canadian company April 20, 1991.

The three-person company was operating out of the Cambridge Suites Hotel in downtown Toronto, with nothing but a phone and a laptop computer.

After a day of meetings, they would return to the hotel to type up letters, and because they did not have a printer, the hotel’s night manager let them use the one in the business office.

Things began to come together in June 1991.

On June 18, the company met Shell Canada. Four days later, they got together with the Bank of Montreal, and then Sears Canada.

All three of the major companies were interested and set about doing research and visiting the operation in the u.k. before making a final decision.

The turning point for lmg came July 25, 1991, the day the contract with the Bank of Montreal was signed.

The next day, Sears committed to joining the program and the rest, as they say, is history.

Underwood credits the air miles success to the vision and entrepreneurial spirit of the staff, the sponsoring companies and the company’s suppliers.

Shortly after starting the company, Underwood tore the cartilage on both sides of one of his knees and was on crutches for six weeks.

At that time, he made contact with one of the company’s first agencies, Hill & Knowlton.

On a rainy, summer day, he arrived at the Hill & Knowlton office 45 minutes late, on crutches, with his laptop computer dangling off one, and dripping wet.

‘I proceeded to tell them I was starting a company,’ Underwood says. ‘That we were going to have all these big companies joining this new kind of loyalty program. And, I wanted an article on the front page of The Globe and Mail.

‘They were real entrepreneurs – they didn’t kick me out,’ he says.

‘We went to all of our partner agencies asking them to be entrepreneurs with us, and they all took risks in joining this program, too.’

The company moved to an executive suites arrangement, where it shared administrative staff with other small companies.

It had 10 people crammed into three offices when it moved to current headquarters on Bay Street in Toronto.

In June, the company is moving once again to Bay and Bloor to be located right beside its customer service centre.

Underwood says the move is important because he does not want more than 100 feet between the desk of anybody in the head office and the people on the front lines in the customer service centre.

‘Once we move, we’ll make it mandatory for everyone to spend a couple of hours a month on the phones listening to Air Miles collectors,’ he says.

Rather than just establishing a company, from the beginning, Underwood has been dedicated to creating a culture within the company.

He says the lmg is trying to create a culture in which people are doing things that have never been done before, and doing what some consider impossible, while at the same time treating people with respect and having fun along the way.

One of the first things he created on his laptop computer when he reached Toronto was a set of operating principles for LMG Canada.

Underwood says they may not be achieved every day, but these principles make them constantly examine the things they do.

‘Realizing we’re not on track with these principles, we make the changes to get back on track,’ he says.

‘We’ve recently made the decision to bring in a senior executive, Gord Brandt, to be vice-president of human resources to help us make sure we’re living up to these principles and investing in our people.

‘It’s something that deserves a senior executive focussing on it full-time.’

The operating principles of LMG Canada are:

- This is one team. Work together to make it stronger.

- Be open, honest and direct with each other.

- Learn from each other, teach each other. No one has a monopoly on good ideas.

- Show respect for others’ interests, time, feelings and ideas.

- Monitor yourself.

- Be at cause.

- Recognize your mistakes. Learn from them. Don’t dwell on them.

- Develop and pursue passions outside of work.

- Give something back.

- Make it fun.

‘A lot of what this company is about is relationships,’ Underwood says.

‘We have relationships with our sponsors, with our collectors, and each other, and everyone who works with us – agencies, suppliers, Air Canada,’ he says.

‘Successful relationships take a lot of work.

‘It’s not as simple as creating a list of principles and nailing them up on the wall, then the culture creates itself. It doesn’t work that way. It’s something we’re dedicated to continuing to work hard at in the future.’