The rumored changes to United Mileage Plus for next year very much would make the program more transactional in nature, rather than focused on loyalty.
I’ve argued that the best (most effective and profitable) programs shift member wallet-share, rather than rewarding high spend.
And I’ve contended that a program which rewards the highest spend on a given flight, rather than the most valuable customers overall, undermines loyalty over the long term.
We need to shout from the rooftops, I am not my rate or my fare!
A customer is the same person every time they board one of your planes or check into one of your hotels. We’re either valued or we’re not, loyal or we’re not. Setting a minimum spend for benefits defines what you see as loyal, though I grate at punishing people who buy the lower fares that you offer — taking seats that you think would otherwise have gone empty, and providing true revenue at the margin.
But once you’ve done that, you decide who you want to consider loyal and worth treating well, treat them just as well every single time whether on a leisure fare vacationing for the weekend or on a last minute full fare business trip, when the plane is nearly sold out and is going to go out full either way.
But for purposes of this post, I want to just illustrate the collosal shift in mindset that’s gone on.
The rumors are that United plans to
- Set a minmium spend necessary to earn status, to weed out low revenue elites
- Prioritize members spending miles and cash to upgrade over members using upgrade instruments given to top tier elites
- Prioritize those elites, even those with lower status, who are traveling on a full fare ticket on a given day ahead of top tier elites when handing out upgrades
So they want to keep out low revenue elites, but even having done that they want to prioritize customers spending the most on a given day rather than the most frequent and loyal customers.
This is very much consistent with recent Continental practice of selling upgrades to all passengers at check-in before upgrading elite members on the waitlist. This sends a message that anyone with, say, $100 is more valuable to the airline on that given day than someone spending $8000 over the course of a year.
How much of a change in thinking is this? I’m not arguing that the lifeblood of a program is mileage runners qualifying for status based on cheap, upgraded fares. That’s not the point here. But the magnitude of the shift is illustrated, I think, in this chat that Randy Petersen hosted with the leadership of United Mileage Plus in April 2001.
Does United frown on “mileage runs”? Next week, I’m flying to Singapore and back in a couple of days just for the miles — and I’m flying on a really inexpensive ticket.
Ohhhh, good question…..
It’s allowed in the program. Have at it!!!!!!
Straight from the boss….. I guess that’s an endorsement to fly….
We appreciate loyal customers!!!!!
There is something inherently valuable, I think, in the sort of customer evangelist who loves your brand so much that they will pay to spend time with you to fly to the other side of the world, just to prove their love for you so that you’ll know how much they care when they give you business next year.
I’m not sayin’, I’m just sayin’.