Rapid Rewards 2.0 is growing up. Now a precocious four years old the revenue-based program has seen a few changes since its initial launch in 2011 but it still mostly looks the same as day one. And, to Rapid Rewards Director Jonathan Clarkson, that’s a key aspect of the program’s ability to mature in a competitive landscape. I spoke with Clarkson recently and we discussed the recent points valuation changes as well as future plans for the program.
Speaking to the most recent change, uncoupling points from a strict per-dollar fare value in the Wanna Get Away fare family, Clarkson was rather candid about the motivation:
We adjusted the redemption rate on Wanna Get Away seats; it is essentially just a way to help manage costs on the loyalty program. We came out with some static prices for point redemptions and the change this month reflects tweaks that we’ve made to the program in the interest of ensuring that we can maintain the other great things that we’ve implemented in the program.
Okay, so he’s proud of the program, but what is really the motivation for adjusting the rates? Not surprisingly it comes down to making sure that the rewards program part of the business continues to contribute its fair share into the overall revenue ecosystem. Clarkson continued:
Just like any aspect of our business from time to time we have to look at it [and see if we’re charging the right amount]. Sometimes we take another look at things and make adjustments accordingly. What we think is important is that we don’t change the core tenets of the program.
Things like no blackout dates and no extra fees are factors which consumers appreciate and which likely contributed to the program winning for “Best Redemption Ability” at the Freddie Awards this past year. Clarkson and his team seem to be betting that a few tweaks to lower the point values in some cases will not be so poorly received as to change customer views on that front. And he’s probably right. Shifting the points value proposition a smidgen while maintaining the customer service focused bits is likely to keep most Rapid Rewards members happy; even with the previously fixed rates odds are most didn’t do the detailed math to figure out the system anyways. And avoiding fees, even those you aren’t going to incur anyways, always feels like a win to consumers.
Check out more interviews with program executives on the LoadFactor blog.
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