Two summers ago I shared a mental model for understanding the way that loyalty programs communicate their devaluations, and suggested that it seemed to apply best to Delta. The past two years appear to have borne it out.
Mind you this isn’t a piece about the value of miles — it’s about how programs communicate changes to the value of their miles.
And it bears repeating.
The median customer doesn’t keep up with changes to frequent flyer programs. They only really pay attention when it’s time to redeem their miles. They either have a good experience or a bad experience.
Having a good experience does matter — customers who successfully redeem their miles become more engaged in the program than they were prior to the redemption.
That was a bit of a surprise to the programs — when they first started it was common to give customers a mileage bonus when they cashed out their account. The last thing an airline wanted was a customer, previously locked into the airline because of their mileage balance, to get down to zero and become a free agent.
But the 5000 mile bonus for getting down below that much became a thing of the past because airlines realized that customers who redeemed stayed customers and even increased their loyalty.
Still, customers don’t necessarily know what a good redemption means other than “I got the seat I was looking for and it was easy.”
Sure, it may have cost 60,000 Delta miles to go to Florida but isn’t that just what it costs? And availability is whatever the airline’s website says it is, of course. These are things that people who aren’t reading this are likely to believe.
Or so airline executives hope. It’s also an opening for the competition, though, Capital One built its credit card business on dissatisfaction with airline redemptions.
But even David Spade just said award seats aren’t available (“NO”), not “the award will cost you 360,000 Skypesos.”
The bet, then, remains that customers don’t have a sufficient frame of reference – that they don’t invest in learning the details of the program – such that plausible statements from airline executives about changes to their programs will ring true.
The current crop of frequent flyer program executives grew up on Star Wars. They remember Alec Guinness utilizing the Jedi Mind trick.
When Ben Kenobi approached Mos Eisley with Luke Skywalker and the droids, he had to confront Imperial Storm Troopers that were searching for them.
Stormtrooper: Let me see your identification.
Obi-Wan: [with a small wave of his hand] You don’t need to see his identification.
Stormtrooper: We don’t need to see his identification.
Obi-Wan: These aren’t the droids you’re looking for.
Stormtrooper: These aren’t the droids we’re looking for.
Obi-Wan: He can go about his business.
Stormtrooper: You can go about your business.
Obi-Wan: Move along.
Stormtrooper: Move along… move along.
You see, the mostly men running these programs went to see Star Wars as kids and they could just feel the force inside of them as they walked out of the theatre. And the lesson they learned was that the Force can have a strong influence on the weak-minded.
And deep down they all wanted to be jedi masters. They grew up, they may not have gotten to fly the Millenium Falcon but they did go into aviation.
And some of them even went to business school. Corporate speak meets The Force.
So “cuts” and “devaluations” become “enhancements.” Instead of doing things to “make more money” the reason for any change is “to better meet the needs of our customers in a changing marketplace.” Usually the changes are the result of “listening to our customers” and will make it possible to “provide greater flexibility.”
Whereas an older generation might have known George Orwell, this one knows Obi Wan Kenobi. If they just use the force, customers – like storm troopers — will believe them.
The force, it seems, is strongest over at Delta where the pile of force they’re shoveling actually includes the claim that they can’t legally notify their members in advance when they’re going to start charging more miles for award tickets (even though they have at times done so in the past, and haven’t notified the SEC of these alleged violations of law).
Deep down they’re hoping their jedi mind trick skills are as good as old Ben’s. If they tell us it is an enhancement, enough of us will believe it.
But in the end we mustn’t forget the lessons of Return of the Jedi. In its happy ending, the Jedi do not control the galaxy and Luke never even formally becomes one. And yet the people and ewoks both rejoice.
Remember that, Delta (and others) before pulling the trigger on those revenue-based programs and telling us they’re enhancements based on customer feedback meant to give us the flexibity we’ve been asking for.