Delta made an aggressive move against its top customers earlier this month. They dropped miles and flight segments as a way to earn elite status, focusing only on qualifying dollars spent, and raising the required spend from $20,000 to $35,000 for top status.
They stripped away benefits from their premium co-brand credit card that comes with lounge access, limiting visits to their lounges to 10 times per year (a roundtrip connecting itinerary could use up four of those) unless cardmembers spent at least $75,000 per year on the card. And to further incentivize card spend, members could earn qualifying dollars by spending on their Platinum and Reserve cards.
- Members received no new benefits while being asked to give Delta more, just to stay even and a lot of Delta elites decided they’d just had enough.
- They were going to have lower status under the new system, so why bother at all? Even if they could spend $350,000 on a credit card to earn Diamond (everyone can do that, right?) they’d be earning a currency that’s worth far less than other rewards points while doing so.
There was blood in the water with Alaska Airlines and JetBlue aggressively courting lucrative Delta elites (JetBlue even termed their Mosaic status match, “Mosaic on the DL”). Knowing that many of these are disaffected premium co-brand credit card customers, too, they offered sweeteners to those who took up the new airline’s card – status through 2024 without even flying.
Delta CEO came out this week saying that they plan to introduce modifications to the changes in the coming weeks. He didn’t say the changes were a mistake. And he didn’t say they won’t still get there. He said they moved too quickly, pulling the band-aid off with their changes. That was the mistake he acknowledges, so he sees it as a PR problem not as a strategy problem.
Our team wanted to kind of rip the Band-Aid off and didn’t want to keep having to go through this every year with changes and nickel and diming..I think we moved too fast.
Why did he move so quickly with that statement, a mere week after the announcement? That’s remarkably fast since changes to the card product also involve American Express another large company.
Chris Dong shares some intriguing social listening data about consumer sentiment expressed online,
Metrics from Sprout Social, a platform that analyzes social messages and overall sentiment, show a 352 percent increase in the volume of “negative sentiment” tweets about the Delta loyalty program in the week following the SkyMiles changes (September 13 through September 20) as compared to the week prior (September 5 through September 12).
In addition, the percentage of tweets with a “positive sentiment,” specifically about airlines that were not Delta (United, American, Southwest, Spirit, and JetBlue), increased by 13 percent for the week starting September 13 compared to the week prior.
And the 352% increase in negative commentary about Delta on Twitter likely understates the reaction as Dong relays to me, “the week of Sept. 5 still had a lot of chatter” about Delta’s diarrhea flight which went viral all over the world. Compared to a normal week, the difference would likely be even more stark.
They saw not just the coverage of the changes, they saw the online response from their customers. They thought they could push customers to spend more through their Amex products, which they already claim runs about 1% of U.S. GDP and will earn them nearly $7 billion in revenue this year. But customers told them they couldn’t be pushed to do more under threats of receiving less.
Hinting that things won’t be as bad as announced (for now) may be enough to get customers to stop jumping ship – stop cancelling credit cards, stop status matching to competitors – and take a wait and see approach. And, no doubt, Delta hopes that in the interim the uproar dies down. Attention spans are short. Meanwhile Delta has said the changes they announced actually haven’t yet gone far enough, to expect more like this in the future.