Yeah, I said it. So did Chris Elliott recently, and perhaps for the only time ever I’m going to mostly defend his point of view on this topic. I think he went too far in suggesting that all customers should walk away wholesale from the programs and that the programs are "corrupt and corrupting" (especially without explaining what he means there). And I disagree that there is a problem with only some passengers enjoying all the benefits of the programs. But there is definitely a large group of folks for whom focusing on the points is absolutely not the smart play.
Sure, collect them if you’re making the transaction anyways, but don’t be too disappointed if they expire (or use a service like GoMiles.com to help prevent them from expiring). And certainly don’t let points drive you to irrational spending decisions, like paying markedly more for the exact same product, just to earn a trivial number of points. That’s foolish even for the folks who can actually benefit from the programs and doubly so for folks who don’t benefit from them.
For the vast majority of travelers there are only two things that matter: price and schedule. And for most of those folks it is only price. Yes, there are significant differences in the way the travel experience will play out depending on which carrier you fly on. The difference between flying from New York City to Ft. Lauderdale on JetBlue or Spirit Air could not be more dramatic for a pair of products that are arguably the same thing, 1000 miles in a coach seat. But at the end of the day, if the Spirit flight is notably less expensive they’re going to sell seats to a chunk of customers.
The other thing to remember is that the vast majority of travelers are not actually particularly frequent fliers. The number of folks actually flying 25,000 miles or more annually is a terribly small subset of the total traveling public. For the folks who are actually flying a lot – and 25,000 miles annually is just the tip of that iceberg – there is absolutely value to be had in the programs. And even for some folks looking to rack up crazy amount of points via credit card transactions (hopefully with someone else’s money) there is value in the programs. But, again, that 25,000 annual number seems to be a pretty smart place to start as a threshold considering the fees and opportunity costs of directing spend to different cards.
The most surprising and also internally inconsistent claim made in that column is that the programs, started to help differentiate the airlines in a deregulated environment as the service levels started to rapidly decline, should somehow find a way to provide the same benefits for everyone. The programs are, for the most part, rewarding the folks who provide the most value to the airlines. Just because a passenger thinks they’re being loyal by making sure their once per year trip is on the same airline doesn’t mean they are actually a loyal customer. They certainly are unlikely to be a profitable one to the carriers. By providing incentives – mostly in the form of improved service levels in some form or another – to their most profitable customers the airlines are generating exactly the type of symbiotic relationship that good marketing should build. It isn’t at all clear why this is a bad thing in his view.
Are the programs perfect for everyone? Of course not. The implication that they should be is a pretty ridiculous leap that Elliott makes and one that unfortunately detracts from the very accurate part of his claim: most folks do not benefit from the programs. I certainly do, but I also know which of my friends and family to guide more towards loyalty and which to guide more towards always buying the cheapest fare, based on travel patterns and reward goals. The vast majority of the scenarios tend towards avoiding the loyalty programs, or at least not using them to drive purchasing decisions.
And anyone who says otherwise is either ignorant or lying to you.
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