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Peter Fader, Professor of Marketing at the Wharton School of the University of Pennsylvania, talks above about Delta’s new Skymiles2015 program. I encourage you to sit thorough all 15 minutes of it. It is telling but to me it raises as many questions as it answers.
The first thing that hits me is this: is it a good idea to only reward the top 4% of your customers even if they bring in 25% of your revenue? What about the other 75%? Can a company thrive on 25% of what they make now? Now, I get that everyone will not leave Delta. Most will stick even with the horrid Skymiles2015 changes to the program (from the normal flyer’s perspective that is).
Also so telling to me is Mr. Fader’s closing remarks in the video. He says:
“I could switch. But, because I am at the highest [frequent flyer level] for US Airways and I’m one of those customers who gets treated pretty well, I don’t really have a reason to switch away from them. I’m one of the few people who will stand up and say, “I like the way that US Airways treats me.”
Now, it could get even better if they restructure their loyalty program in the way that Delta has. And while there’s no specific evidence of it, I predict that they will do that as well. So, I have no reason to jump ship and try other airlines out.”
So he is happy where he is, under the current US Air program, but he wants AA/US Air to have a Delta program that could be better, but he is NOT willing to RIGHT NOW switch to the clearly better Delta program? Really? If the Delta one is so great, why not vote with your feet and move over and stand behind your assertions?
Here is what I see happening in 2015. Delta flyers are going to be beyond upset when they see how little they are getting back from flying Delta. You see, IMO, discount personal and business flyers have put up with all the lucrative little fees and extra costs Delta charges because we at least get some points back at the end of the day. In 2015, the continued FULL COURT PRESS will be more than ever but “you” will only get 10-30% of the rewards you got before. How happy are you going to be then to pay all those fees at that point? I thought so.
What about the other airlines? United is a mess. AA/US Air needs to find it’s footing and that will take some time. Plus, why switch and follow Delta until you have a chance to see how it goes. If it works, switch then, If not, you can say: “Come on over to us, we are better and NOT changing how we reward flyers“.
I think 2015 is going to be an interesting year for aviation and rewards programs – don’t you? – René