I’m Sick and Tired of Hearing that Delta Rewards Its Highest Valued Customers, Because it Just Ain’t True

New Commenter ‘AtlantaAnne’ describes herself as “a marketing professional whose expertise lies specifically in travel loyalty programs” and was all over the comments across a variety of old posts about Delta SkyMiles moving to revenue-based mileage earning in 2015 arguing that the airline is making the right strategic decisions, that Delta rewards high value customers.

While she doesn’t explicitly defend things like taking away award charts so that customers don’t know what redemptions are ‘supposed to’ cost, her typical defense goes something like:

…I actually applaud what delta is doing here, which is rewarding their high value customers and preserving the integrity of the (high value) in-flight experience.

When the flood gates are open and the redemption threshold is too low, the quality of the premium travel experience is diminished.

Tying mileage accrual to consumer expenditure (MQD) within the airline is the right thing to do. Miles accrued via a credit card all all fine and dandy, however those miles do not accurately portray a Delta loyal traveller, rather a person who carries and uses an Amex that is co-branded with Delta.

In my loyalty projects, I typically focus on rewarding the high value, high loyalty customer first…. And then trickle down the ladder, providing a lower tier of rewards to a less valuable, less brand loyal consumer. Make sense?

Sloppy Thinking Leads to Confusion

First, the idea that “the flood gates are open and the redemption of the threshold is too low” having anything to do with the premium travel experience completely mixes up the difference between redeemable miles and elite status — something people do often because frequent flyer programs are really two separate programs (benefits for frequent customers and free flights) under the same banner.

The rate at which customers earn miles on their tickets that can be used for free flights does not compete in a material way with the benefits that an airline awards to its regular customers.

Now, I could stretch the argument for AtlantaAnne and say that by rewarding customers with fewer miles, those who still have miles will have an easier time using them (less competition for award seats) but that’s not really the case since Delta isn’t limiting redemptions available to partners and isn’t reducing points-earning from their co-brand credit card. Indeed, they’re the opposite approach because elite flyers no longer get access to additional saver award space like they used to.

In fact, someone who carries an airline brand in their wallet and goes to it day in and day out is a loyal customer which is why Delta re-upped their $2 billion deal with American Express, and why when the airline is awarding fewer miles for travel the miles earned via credit card spend are relatively more important rather than less.

Delta Isn’t Really Rewarding High Spenders More

Delta isn’t actually rewarding their high value customer which their revenue-based changes.

They’re pushing up mileage earning for a small subset of their customers (although they’re capping that earning for the most expensive tickets) while they’re pushing up the cost of awards too.

There will be some customers who net out even, and a miniscule subset who come out ahead, but the numbers suggest that the vast majority of customers — even relatively high spend customers — come out behind.

Delta’s change to revenue-based elite status requirements means you have to spend a minimum of 12 cents per mile to earn status.

But for mileage-earning, break-even spend (how much you have to spend in the new revenue-based program to earn as many miles as before) is 20 cents a mile.

Now, if Delta had set the threshold at about 14 cents, folks spending more than average would earn more miles than average and folks spending less than average would earn fewer miles. But that is explicitly not what they did.

On net they are rewarding far fewer miles for flying than before, including to customers with above average spend.

Someone spending 18 cents a mile on tickets with Delta is spending 50% more than needed for revenue-based status, while earning fewer redeemable miles than before.

And with awards becoming more complex, with more tiers and with the elimination of stopovers, their miles likely won’t go as far either.

There are Reasons for High Spend Customers to Fly Delta, But the Mileage Program Ain’t One

Even if someone was focused on earning the most number of miles, Delta doesn’t offer a compelling value proposition. United basically aped the Delta mileage program offering the same mileage earning but with points that are worth a whole lot more.

Delta still lags behind because:

  • They don’t have an award chart and make no promises about what an award is supposed to cost
  • They do not offer international first class awards
  • Their partners offer on average a lower quality inflight product, less award space, and fewer route options than counterparts in the Star Alliance
  • Their award pricing engine is broken frequently charging more for award tickets than they’re supposed to (at least going by what the chart used to say)

The reasons to choose Delta have nothing to do with SkyMiles, which is the weakest frequent flyer program in the US among programs with international partners — which is true whether you’re earning on expensive tickets, cheap tickets, or through non-air programs.

You fly Delta because you live in one of their hubs or the Upper Midwest and they offer the best frequency and connectivity. You fly them because they have the most inflight internet including their regional fleet. You fly them because they’re a reliable airline operation. These are all things independent of miles that may appeal to a high value customer. The area where they truly lag is their frequency program.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Nothing new about Delta. All you wrote is well known by all Delta frequent flyers. I am included in the Delta hub hostage situation where being based at MSP truly limits my options to fly non-stop to most of the destinations I fly so I have to live with Delta. Yes, they charge me $1,100 to fly from Minneapolis to Omaha, $1,000 to fly to Raleigh, etc… but it is all business travels and being able to spend more time with my family instead of connecting in another city is priceless to me. I had over 1 million SkyPesos in my account and I dumped them all. I did not even care if the redemption was good or bad. I just used them all to fly on vacation with my family. I am now back to 250k miles and I will find another way to dump them quicker. Not much I can do from my side. 🙁

  2. Gary, while you give good reasons for flying with Delta, you miss one of the most important ones: Level of service.

    My office is in the Houston area, and when I go to China, I will always try to fly Delta. My colleagues complain about the service on the direct IAH-PEK Air China service, but they put up with it for convenience.

    I am in China right now; my second trip of the year. The previous trip was on short notice, and I could not get a DL ticket at a reasonable price, so I flew on UA through ORD in Business Class. I was asked for, and received, a challenge status match to 1K. I was hoping the international service was better than UA domestic.

    No such luck. In business, half of the seats are rear facing. Each and every time a FA passed me, they bumped into me. The food was “meh” at best. All this for a $6,000 ticket. On the return, I was seated next to a gentleman who was a DL 2MM. He commented that UA FIRST class was about equal to DL Business Class (Delta One). Such a lousy experience, it confirmed my desire to avoid UA in the future.

    I actually make out better in SkyMiles under the new program, getting the full 75K miles per trip (versus the approx. 40K under the old system). However, I spend so much time on planes, I usually give away the awards to family.

    Just my $0.02

  3. The DeltaPoints douchbag will be in contact shortly with talking points from the mothership…standby…

  4. @Robert…. Hahaha, love it. I second your sentiments, he is a such a negative influence on so many people and a huge crybaby with a level of entitlement I have never seen. I wish I could remove him from “my” boarding area. Sorry… Just my opinion.

  5. @Darth Chocolate – I just flew Delta business class Sydney – Los Angeles. It was fine. Service was definitely not a differentiator although as with any airline crews can vary.

  6. Well, I’m an “economics professional” with experience in pricing… And Delta is NOT rewarding high value customers. $1700 spent on a transpacific U/X/V is not as profitable as $1700 spent on domestic Y, but delta awards the same number of skypesos. For instructions on how to reward valuable customers, see the AAdvantage eqp and rdm promotions for premium fares.

  7. Those were some very interesting points. Yes, we all know the problem is that Delta, and the other airlines FF programs, are being flooded with CC miles.

    DL just renegotiated their contract with AmEx. If they wanted to give more weight to BIS miles than CC miles, they could have. Instead they had the contract modified to send MORE points from AmEx into skymiles. DL is overtly throwing their FFs overboard to get more “sugar” from the credit card spending.

    I had to chuckle at the commenter above ^^^ who tried to diss UA by comparing UA’s F cabin with Delta’s biz cabin. Hello, DL flies only two cabin planes. So yeah, they are comparable, because UA First and Delta biz (now DeltaOne) are in fact the top product from each.

    I have a close friend who was a committed NW flier for transpac flights. Since it became Delta, he has switched to the Japanese airlines, because the DL product is such a step down from the NW product.

  8. I fly Delta much more this year as a result of their program change. And I’ve had more success finding low level awards than ever before as well. And I find their customer service to be far better lately than AA or UA.

    I have not been a fan of Delta historically — in fact, I am close to million miler status on AA and UA and far from it on DL, but DL has become my carrier of choice in a market in which I can fly virtually anyone I choose (NYC).

  9. @Andy:

    Way to compare apples to oranges.

    The $1700 domestic “Y” fare is for a maximum of 5-6 hours of providing a service, or $280-$340 of revenue per hour.

    The $1700 transpacific “U/X/V” fare is for 10-12 hours of service, or $145-$170 per hour.

    Obviously, the domestic Y fare earns more revenue per unit time than the equivalent TP U/X/V fare, making it more valuable to DL. It is also more likely that the domestic “Y” fliers have higher medallion status than the TP “U/X/V” fliers, so they actually get more redeemable miles on average.

    The real “reward” is when DL chases you with status, rather than the other way around. And it’s awesome.

  10. @ Joseph N.:

    Last year I flew 8 long haul BC trips with DL. I know they have only 2 classes of service.

    My point was that for $6,000 in UA Business Class versus $11,000 for UA First versus DL $6,000 Business Class, makes *on price alone*, DL and UA Business class comparable; that’s what I compared. And DL has much better service and gives a much better experience. So why would I want to pay almost DOUBLE for the same experience n UA?

  11. Keep preaching to the blind Gary! At the end though, they will probably continue to swipe their skymiles cards and believe they are getting an excellent value 🙂

  12. I am a loyal Delta flyer. Between business and leisure travel, I am able to fly between 50k – 55k butt-in-seat miles each year. This, plus fare class bonuses and usually hitting the spending threshold on my Delta Amex gets me just short of Diamond, which is where I like to keep it. Looking at my travel and spending habits from the POV of Delta, I am a flyer that I would want to have, and that I would want to keep happy. My MQD spend last year was about $15,000–which is not nothing. As a general rule, I’m happy with their operations and I’m happy with the on-board experience. All of that being said, taking away things like transcon upgrade eligibility and guest lounge access (from a Delta CC which costs me $450/year) doesn’t make me feel very rewarded. Simply because I’m not the HIGHEST level elite, doesn’t mean they shouldn’t treat me like a valued customer. I could easily qualify for Diamond, I just don’t so I can roll over some miles and take it easy in the first quarter when I don’t have tons of travel to do. If they were truly rewarding their most loyal customers (of which group I am a member), I would be experiencing those rewards. I am not.

  13. Gary you are dead on.

    I posted this on Flyertalk yesterday (http://www.flyertalk.com/forum/24654296-post4432.html). Look how ridiculous a simple booking takes to book on Delta. If a customer does not have an intimate knowledge of the (former) rules, and how to coax and coach agents, there is no way to book flights of even simple itineraries without workarounds, fighting, and pandering on the phone:

    Successfully, after a moon mission, booked an ATL – JFK – SVO – JFK – ATL trip in Economy in Economy for 60k SkyMiles + $280 taxes/fees. (JFK-SVO-JFK on Aeroflot)

    – Tried to book on delta.com but at the last screen would always get a “fare no longer available message”, even though the seats were still there and delta.com would show the flights again
    – On Friday Called and after 90 minute wait got an incompetent agent and had to HUACA
    – 2nd Agent after 2 hour wait was more helpful. Even though delta.com shows 30k each way availability, they can’t book it due to some IT glitches with Aeroflot. After going through much wrangling, talked them into putting the itinerary on a 3 day hold until IT issues with aeroflot got resolved. He gave me the record locator number. He put a bunch of notes in the PNR, including that they should honor the 60,000 price.
    – Called the next day and after a 2 hour hold and the agent claimed the Aeroflot availability we had on hold was no longer available and I was never supposed to get a hold in the first place. I checked on expertflyer.com and delta.com and both were showing the Aeroflot availability still there. Agent adamant it was not. I should have did a HUACA but stuck with it. I asked to escalate to a Supervisor, best she would do was get Online Support on who claimed nothing could be done. They also missed with my record on hold and the Atlanta – JFK segments went from “N” Main Cabin class to “ND” (Higher Main Cabin). I asked agent to ask Revenue Management to make Delta operated JFK – SVO for same dates available for Low/”N” availability. She tried and was denied. I asked to speak to a sueprvisor. While on hold for supervisor I went on Delta.com and successfully booked a JFK – SVO – JFK using the same Aeroflot flights she and online support claimed were not available. Gave her the record locator on the phone and when she saw I successfully booked it she literally gasped. She was shocked! I told her take whatever I had on hold and new record locator and marry them together however you need to make ATL – JFk – SVO – JFK – ATL happen. She tried and couldn’t. After 30 minutes the supervisor who she got on the line digested everything understood the situation. She was able to wrangle my two records, collect another $5.60 in fees to add on the ATL – JFK legs (shouldn’t it have been $11.20? oh well…) and I finally had a successful ticket

    About 4-6 hours of wait times, 2-3 hours of actual talk times, multiple clueless agents and IT glitches later I had the simple round-trip.

  14. @Andy. I agree. Deltapoints needs to go. There’s making a point, and there’s making yourself sound like crying baby who lost his bottle.

  15. I think the biggest issue here is that no one knows what Delta considers a HVC. If you are in 360, you are an HVC but that doesn’t come lightly, or cheaply. If you think spending < $100,000 makes you an HVC I believe you are wrong.

    And with that I believe that 360's do get better treatment.

  16. @Gary — While I am with you on much of what said here, I would like to just set one thing straight on this statement that you have made quite a few times: “But for mileage-earning, break-even spend (how much you have to spend in the new revenue-based program to earn as many miles as before) is 20 cents a mile.”

    The break-even spend is not a fixed number; 20 cents/mile happens to the worst case. The break-even spend depends on elite level. Strictly and correctly speaking, the break-even value of 20 cents/mile that you keep using is for general members because they earn 5 miles/$. To get the cents/mile one just flips that number to get 1/5 = $0.2/mile = 20 cents/mile.

    Likewise, silvers earn 7 miles/$, so their break-even spend is 1/7 = 14 cents/$

    How about a Diamond who earns 11 miles/$? 1/11 = $0.09/mile = 9 cents/mile.

  17. @Gary — Even if one does that math, which I did, the break-even point would still dependent on elite status. This should be intuitive. There cannot be a single break-even spend point when different elite levels earn different number of points even for the same spend. So, the more general question that one needs to ask should be what would be the break-even spend regardless of how one earns the miles because this incorporates the different ways that miles can be earned.

    RDM = ticket cost * elite multiplier. (i.e., 5, 7,…11)

    RDM/ticket cost = miles earned/$ = elite multiplier

    The break-even spend would thus simply be 1/elite multiplier

    The value of 20 cents/mile that was initially thrown around was based on 5miles/$ that a GM would earn = 1/5.


  18. @DCS the break-even point varies slightly but hovers around 20 cents regardless of elite level because the new multiplier is similar to the old elite mileage bonus (11 points per dollar is a 120% bonus, versus 125% bonus in the old program).

    Try doing your math again 🙂

  19. Delta’s frequent liar program is in full force, yet one must admire them for consistently being better than AA/US and UA, in every single survey over the last — 5 years?

    Their run at customer satisfaction among the geriatric 3 is impressive. They’re not a good airline (no Virgin America and certainly no Singapore/Cathay/Qatar etc.), but rank better than the others.

    There’s much more than the airline than their FF program. Indeed, the program ranks way low in people’s purchasing decision, which are usually price compared to safety, flight timing, legroom, entertainment, food and drink quality, and then the rest.

  20. When mentioning that SkyMiles are worth less, you forgot to mention that they removed elites’ extra award availability. According to DeltaPoints’ research a couple of years ago, that actually made a HUGE difference in the ability to use miles, particularly for top tier elites!! The research basically showed that for his Diamond status he had ~2-2.5x the saver availability of a non-status flyer, and his wife, a mid-tier (Gold?) at the time, basically only saw slightly better results than a non-status flyer.

    Wish I could find the link now. :'(

  21. I agree with the reasons you fly Delta has nothing to do with the reward program.

    Although flying out of a no name airport I am part of the minuscule subset that comes out ahead and know a few others that are also coming out ahead. How do we know we have spread sheets that have been tracking and we all talk about. 🙂

    What is funny and unexpected is that I am getting more sky pesos and cheaper domestic tickets being able to book for 20,000 RT for a $700-$800 ticket.

    They took away the Sky Club Plus as part of the Diamond Benefit – No fun!

    Totally agree for most they are worse off then last year, and by far the worse program but as I value Service, convenience, comfort and being on time there is no choice for me flying out of TRI.
    A 717-200 beats a Dash 8 every day and Delta knows how to get me home on time to see my family.

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