I used to do Strategy and Analytics for an [Online Travel Agency] and had an offer for a similar title [tp General Manager, SkyMiles Strategy & Analysis] at United Mileage Plus.
This is much more an analytics role than a strategy role. At all these firms, they need a business person who can run data models to tell them what is making/not making money. Sometimes I was able to put together small changes or run promos that helped the bottom line (my biggest was probably an international fare sale on select foreign carriers), but the overall direction of the program is guided by the higher-ups. This person would just tell the higher-up how much money they would be making off the decision.
That being said, 100% of the decisions made come down to the bottom line. One of the most common analyses I would run would be based on net revenue improvement vs. volume decline from adverse decisions. Very rarely was it not profitable at the end of the day to do a customer unfriendly move, as people get angry but rarely change decisions enough to offset the new cash being brought in.
Relatedly, reader Alan H. pointed me to “Every Time a New Fee is Announced, a Fairy is Born”
Ancillary revenue grew 7% in 2014, the most since 2010. 2015 is off to a good start with January up 9% as reported by A4A this week. There are more opportunities by tweaking current offerings and by exploring new ones. We list 10 potential new fees in this note, including charging for sodas (US Airways tried this unsuccessfully in 2008), first checked bag fee on int’l routes, and fees for customers that lie and try to cheat the rules. Many of these could be lucrative.
Inconvenient truth: customers like fees. Maybe that sentence would be better received if we had said “customers like paying only for what they use.” Well, guess what…that’s the same thing. Part of the airline evolution is about airlines segmenting their customers and treating good customers better than bad customers. Hotels do this well. Some airlines are just getting into that as they overhaul loyalty programs, for example, to dollar-based awards.
If a company can charge you more and give you less, and you don’t materially change your behavior, well then they probably should do just that. It’s in their interest.
If you aren’t going to move your business to products offering you better value propositions, then you get exactly the program and fee structures you deserve. No sense complaining.
Of course there’s a collective action problem: you may move your business, but unless enough business moves then it’s not going to matter. You need to do more than move your business — you need to move the needle. So you need to amplify your voice.