A reader shares how changes to the AAdvantage program’s elite status-earning drove his behavior in making a major purchase – Super Bowl tickets – and this story perfectly underscores how ‘Loyalty Points’ are changing the game in loyalty marketing and American’s position relative to competitors.
I just bought 4 Super Bowl tickets. (Huge Bengals fan here.) On the upside, thanks to 5 AA loyalty points per $ on Vividseats and 1 point per $ on my AA credit card, I just scored 113,600 loyalty points. Exec Platinum gonna come early this year. I had to pay maybe $1k more than comp seats on another site to use Vividseats, so not a bad deal
This short summary offers several takeaways,
- Consumer spends $1000 more than they otherwise would have. That’s what a loyalty program is supposed to drive towards, though not usually so dramatically. Earning 100,000 miles for an incremental $1000 may be worth it but it’s still a lot of extra money, and the miles alone might not move the needle if only redemption were on the line. But progress towards elite status means a real willingness to spend more.
- Spend goes on AAdvantage cobrand that otherwise wouldn’t have. Even if it made sense to pay more for these tickets through a mileage-earning partner, it would have made sense to do it on a credit card that rewards spend at more than 1 mile per dollar and one that earns a more flexible currency than AAdvantage miles. The one mile per dollar on a big purchase made sense to this customer because of the role of Loyalty Points.
- Associates American Airlines with the big purchases – indeed, the big moments – of your life. When your team goes to the Super Bowl, and you find a way to participate in that, and your first thought is how do you include American Airlines that is a huge loyalty marketing win.
Is American Airlines status now too easy to earn? If it is it’s because the program is too successful at driving purchases.
Who would have had a good reason to spend on an American Airlines credit card before (as opposed to getting the card for its up front bonus and benefits)? And who would have had a compelling reason to choose to accrue AAdvantage miles over competing currencies for online shopping, for dining, and myriad other activities? They have succeeded in making AAdvantage miles the preferred currency to earn for non-air activities.