What I Told the Airline People at the Frequent Flier Conference

Thank you to everyone who commented, emailed, and tweeted about what you wanted to see from the airlines regarding loyalty programs. I joined with Nicholas Kralev from the Washington Times on Friday morning up on the stage to tell the crowd what you said. Did they listen? I’m sure some did, especially since data connections on BlackBerries didn’t seem to be working so well. That doesn’t mean anything is going to change, of course. At least we were allowed to say things as we saw them and nobody pulled our mikes away from us.

In all of your comments, I saw three main themes relating to loyalty programs (some of you strayed a bit too far into other areas for this conference).

Simple and Easy
Many of you said you were fed up with all the complex rules that have evolved over time in some of these programs. No airline employees actually spoke up when we tried to get feedback during the conference, but we did have other attendees jump into the conversation. Nicholas asked why there had to be so many small differences between some programs that simply made it difficult to grasp all the rules, and one person stood up to say that it was a balance between fairness and simplicity.

I explained that there was an understanding with customers that the simplest program (fly 10, get 1 free, for instance) isn’t always the best way to do things, but there are some things that don’t make sense even in that framework. For example, the last minute award bookings fees that Seattle Sleeples mentioned may make sense in the context of revenue management, but from a pure customer perspective, they can’t really be justified. The disconnect is the problem there.

Customer Value
I didn’t try to single out United, but that ended up happening more than once. One area where this came up was in regards to creating value for elites. (Thank you, United in Denver, for mentioning that in the first comment.) United’s recent decision to sell premium amenities to anyone is a perfect example of elites feeling like they aren’t being valued. Chris also echoed this concern in his desire for customer appreciation events. People want to feel valued, and some people, like asad, don’t feel they’re looking at lifetime value very well.

Someone spoke up saying that people are used to being rewarded with miles so airlines aren’t going to change that. Of course, some are, including JetBlue with their new spend-based model, but either way people end up being rewarded for the wrong behavior. People may fly a lot of miles on a $99 fare and end up not being very valuable to the airline at all, but they end up reaping the rewards. This goes back to that whole fairness vs simplicity argument.

The last point was one that I thought was expertly explained by Gary Leff from View From the Wing. In fact, I pulled up his comment on the big screen and started reading from it directly. So, I’m going to republish that here.

Honesty, Transparency, Integrity.

Those sound old fashioned, but I’m serious. Bear with me.

Don’t talk about ‘enhancements’ that are really devaluations. Your customers resent being lied to.

(Oh, and don’t ACTUALLY lie, either. Don’t promise something like the ability to redeem award seats on your partner airlines and then when a partner is offering an award seat don’t refuse to let your customer book it. And don’t tell your customer that the airline “isn’t offering the seat.” And don’t tell the customer that the partner airline doesn’t even fly the route on that day. I’m talking to you, United. 100% seriously.)

Offer a clear value proposition and STICK TO IT.

I disagree with @Chris who says no devaluations. Just be clear about what you are doing and give PLENTY of notice. So that there’s a clear connection between an offer, customer behavior, and a reward. When you offer benefits, customers fly to earn those benefits, and you change the rules of the game just as they’re about to experience those benefits… #FAIL … seriously. So declare by the end of February, 2010, say, what the 2011 program will look like. And stick to it.

In this same light, I agree with @Chris, though, that there is good online social media communication from a couple of companies like Starwood. Engage your customer, honestly and transpanretly. With a strong customer service presence and not a marketing, PR, or spin shop.

Tell the truth. Declare it openly, warts and all. And then deliver on your declarations. And your customers will love you for it.

Surprisingly, the one thing we failed to bring up was the Starnet blocking that United engages in. It’s particularly funny that we didn’t mention it since Nicholas wrote a column that effectively thrust this into a wider spotlight. But we got so caught up with other examples of lying about something being done to “enhance the customer experience” that we ended up running out of time.

I know someone asked for a video, but I don’t think it was taped. If I find a video, I’ll post it.

Thanks again for all the feedback, and hopefully this had some impact.

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