SpiceJet's Pioneering Paid Loyalty Program
First-of-its-kind paid membership model that transformed ancillary revenue for a low-cost carrier
The Challenge
SpiceJet, one of India's leading low-cost carriers, faced several challenges in a competitive and price-sensitive market:
- Price pressure from competitors eroding profit margins
- Limited ability to differentiate in a commoditized market
- Need to increase ancillary revenue beyond base ticket sales
- Traditional loyalty programs not financially viable for their low-cost model
- Reliance on seasonal demand patterns affecting cash flow
Market Context
The Indian aviation market is highly price-sensitive with intense competition among low-cost carriers. Traditional loyalty programs based on free rewards were financially unsustainable in this model.
94%
price-driven bookings
8%
average profit margin
The Solution
CustomerInspire worked with SpiceJet to create a revolutionary approach to airline loyalty for low-cost carriers - a premium paid membership program:
SpiceClub
A tiered paid membership program with Silver, Gold, and Platinum levels, each offering increasingly valuable benefits and services that created immediate revenue through subscription fees.
Value-Based Benefits
Carefully designed benefits that were highly valued by customers but had manageable marginal cost for the airline, creating an attractive value proposition with controlled operational impact.
Premium Experience
Enhanced customer experience for members including priority services, dedicated support, and exclusive benefits creating a "premium layer" on the low-cost model.
Program Structure
The SpiceClub program was structured into three membership tiers, each with a clear value proposition:
SpiceClub Silver (₹2,999/year)
- Free seat selection
- Discounted meals and baggage
- 10% off SpiceVacations bookings
- 50% off flight change fees
SpiceClub Gold (₹4,999/year)
- All Silver benefits plus:
- Priority check-in and boarding
- Free flight changes up to 3 hours before departure
- Complimentary meals
- 15kg baggage allowance on all flights
SpiceClub Platinum (₹7,999/year)
- All Gold benefits plus:
- Guaranteed flight availability up to 12 hours before departure
- Complimentary SpiceMax seats
- No cancellation fees
- 24/7 dedicated customer support line
- Exclusive vacation packages
Implementation Process
The implementation was completed in three phases over a 6-month period:
Phase 1: Program Design
2 months
Created the membership structure, pricing, and benefits based on customer research
Conducted extensive market research and financial modeling to determine optimal pricing tiers, benefit structure, and operational feasibility for each membership level.
Phase 2: System Integration
2 months
Implemented the technical infrastructure for membership management
Integrated the CustomerInspire platform with SpiceJet's reservation system, website, mobile app, and airport check-in systems to enable seamless benefit delivery and recognition.
Phase 3: Market Launch
2 months
Executed a phased rollout starting with limited-time founding member offers
Created initial momentum with special founding member pricing and exclusive benefits, followed by a full public launch with targeted marketing campaigns across multiple channels.
Results & Business Impact
₹86 Crore
In direct subscription revenue over five years
218,000
Paying members across three tiers
1.5x
Average revenue per member per year
