The reason is simple: Social media is more like a democracy. You engage, but on a mass level with customers. While it's important to engage on multiple levels, not every customer can be a VIP. This may sound like a nice idea, but in practice if companies answered every complaint with an unconditional refund and treated everyone with their most lavish services they would be out of business very quickly.

One-to-one marketing is a different concept. It's essential to recognize many customer types, but we need to treat different customers differently. It's like being a regular customer at a diner where you have been going for years. The owner knows your name and you don't have to order because he knows exactly what you want; he makes sure the eggs are not too runny, and puts it on the house tab. In this example, our restaurateur would treat a new walk-in customer differently; he might try to upsell the basic morning breakfast to the deluxe special. And cash payment only.

It should be same with airlines. Instead, airlines often don't track purchases beyond the last transaction; every sale is a distinct and discrete event. One of the big problems airlines face is how to make sense of the millions of daily transactions around their brand. While many are important, there is a lot of irrelevant noise out there and it's very hard to link these voices to real individual customers, or future customers, who matter to you.

Airline IT systems further support this transactional focus, because they were built around the Passenger Name Record (PNR) transaction, which is unique to every trip. Loyalty programs are the perfect platform to build these discrete transactions around the customer profile. Without a unique customer ID, it's difficult to build a picture of your customers' histories and a profile of their demographics.

Yet, in most airlines that have loyalty programs, less than half of their customers are loyalty members, including some of the highest-value elite customers. The reasons vary: Customers may not expect to travel on your airline again, they may not understand the value of the program, or they simply don't want to bother with the effort. Whatever the reason, you are losing opportunities for engagement with new customers (including those of your competitors) because you are only focusing on those customers who are already converted.

There are many ways to encourage your customers to sign up. It can be as simple as a small gift or service priority such as an extra free checked bag, or even the convenience of remembering their identity and payment details on your website for their next booking. Customers are willing to sign up as long as there is a reason for them to do so, and if you make it easy. Why not use the information you have through ticketing to auto-enroll customers at the website or check-in desk without requiring them to complete a form? All they would need to do is simply click an opt-in box.

Loyalty programs don't even have to give free miles. They can present offers for benefits like an upgrade on the next transaction. In fact, we don't even need to call them loyalty programs. For a low-cost airline, how about creating a "customer key" that unlocks these special benefits for customers?

Here is the real power of your program. Now that you have a customer ID, why not encourage customers to use it in social media applications to help you learn about their profile and next trip? Millions of social media users are happy to share their personal information in games such as Farmville on Facebook; would they not also be willing to link their customer ID to their Facebook, LinkedIn, and Twitter profiles with the knowledge that they might get a targeted promotion for their honeymoon or next vacation? The popularity of sites such as Tripit.com, Foursquare, and Gowalla prove that people are very willing to exchange their personal travel information widely with others for utility, or to simply share their whereabouts with friends.

So let's stop thinking just about offering miles to loyal customers. Your loyalty program is a platform for engagement. Miles are not the end-game, but just one tool in your toolbox.

Bruce Sweigert is Director of the Travel & Transport sector for Peppers & Rogers Group. Contact him at bsweigert@1to1.com