Two unrelated interactions over the past week or so have me thinking about loyalty and value and where to draw the line in the search. Somewhat interesting to me is that one of the stories comes from the passenger side and the other from the airline side and they both have a similar conclusion. Both are also surprisingly rational, which might just be the most shocking bit of all.
I’m not paying for my flights but when I see something that’s half the cost, I can’t help it but to go with the lower cost carrier.
The above is an excerpt from a post on FlyerTalk made by a relatively new member trying to figure out how they should focus their loyalty given the spread in fares. Even if the money doesn’t come out of your personal pocket there it is a challenge to spend so much more for essentially the same product. Somewhat unsurprising was the suggestion by some members that the double fare can be justified but I suppose that’s part of the mentality at play in the market. Of course, it isn’t always the same product and there are both big and small differences between the service, flights and value on any given choice. Still, I tend to struggle with justifying the 2x price point to make a trip like this happen. And for passengers paying out of their own pocket that’s an even harder spend to justify.
The second quote came from an airline loyalty executive talking about his program and carrier and their approach to loyalty marketing:
I may not get 100% of your wallet. But I want to be in your consideration set on every transaction.
It makes sense, of course, that no company thinks they can be all things to a passenger in every scenario. There is a bit of humility required to get to that point and such a display is not often seen. And that’s a shame, really, as such an approach is probably better for most passengers most of the time.
To be fair, I know I’m not the same as most passengers and I know I’m not the target of that loyalty program. But they do get my consideration on every trip. Part of that is because they’re generally a more pleasant airline to fly on in my experience but the other part of that comes from having a rational and practical approach to the market and to addressing their customers.
Loyalty programs are great when the rewards you’re realizing are greater than the investment being made. Just make sure you’re accounting for that as you make your loyalty decisions.
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What is even more obvious is in the credit card loyalty that it pays to be disloyal and that is extremely illogical as the bankers have created the situation…….some may learn that annual mileage bonus plans may need some serious rethinking or otherwise they are just moving the deck chairs around on the Titanic………..
I feel as if I have a constant internal dilemma. I relocated to an area where I once again need to be a United 1k. I switched from United to Delta last year and I am piondering doing a status match back to 1k. However, I can’t bring myself to pay $1,900+ for an (economy) r/t home on United. I can grab a ticket for $1,300 on Air Canada or JAL. I’m starting to think that those bonus miles, upgrades, etc aren’t worth the extra cash to meet the 1k challenge requriements.
I always ask myself this question, how much better off would I be by not being loyal? And my answer is simple, I’d save a lot of money on my basic plane tickets but I would also miss out on some of the best trips of my life because I wouldn’t be able to afford the travel(thanks to my UA miles).
I have a simple rule of thumb when considering which flight to choose. I’m a United 1k in a market where the only non-stops are UA, BA and VS. UA offers me lounge access, extra legroom (economy plus) and double the number of miles. The lounge access (there and back) is worth about $30 to me, the extra legroom about $150 and the extra miles not very much. The possibilities of upgrades, whether as an operational upgrade or using a GPU are so remote that they don’t have any value attached. So, in short, between $180 and $200 is the fare difference required. Fortunately, as UA is the worst airline on the route, and is demonstrably so, it’s usually cheaper than the other two, so it doesn’t come into play.
The more interesting, and more difficult, question is that of switching loyalty. In such a case, there’s only so much you can quantify as the real values come several years hence, when the programs will probably have changed substantially.
But, essentially, it’s key to know the value, to you, of the benefits elite status offers, and act accordingly.
I was hoping to score some cheap tickets for my brother and his family traveling from SFO to PHL in the summer when ticket prices are high. Due to the fare wars between United and Virgin there are great prices out of LAX but unless you want a stop there, not so much non-stop SFO. For several reasons a non-stop flight is very important. When I saw a good fare from United, I jumped on it but I sent an email to Virgin hoping to get them to price match since he would love to fly them (as stated above, United’s product is not the best). Virgin was very nice and sent a reply explaining the reason for fare increases etc but did not offer to match (I didn’t expect it but I hoped). If you are buying 4 tickets the price difference is very important so he went with the better deal. He comes home 2X a year and would love to be loyal to Virgin but the wallet speaks loudest when cash is short.
I’m not a power traveler, just someone who gets about 30-40k air miles a year. Instead of spreading my loyalty, I prefer to stick with one airline if at all possible. For years I was AA Gold, somewhat of an anomaly here in Colorado Springs. I ran up some good miles on AA through credit card spend and by flying AA almost exclusively for many years.
AA has great flights to DFW from COS, but that’s about their biggest advantage here. UAL really owns most other destinations from Colorado for the most part. In the past year AA has simply priced most flights out of consideration – my company won’t pay a 10%-20% premium for me to get status – and so this year I’ve switched to UAL (they were happy to offer a match challenge that was not too hard). Only a Silver, but it has simplified life and lessened costs. Also allows me to fly with co-workers more frequently (most use UAL or Frontier). I’ll just swallow and travel standard coach when AA does make sense.
Anyone else…will have to really work hard to get my biz. Here’s why: I almost went over to Frontier last fall, which had some good schedules from COS…but am very glad I didn’t, as they have now pulled out of COS altogether.
Bottom line: I am a loyal but fickle customer. And the airlines have proven to be quite like me.
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