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  • Writer's pictureGerry

Loyalty up in the air!

Updated: Jun 21, 2019

The airline I use the most is Delta. This is mostly driven by two factors:

- a 2 year weekly commute to Chicago

- La Guardia being the most accessible airport from our apartment

What is clear to me tho, is that even with all the info they have on me, they are no closer to understanding me as a customer of their airline.

First: LGA is undergoing major reconstructive surgery and is a nightmare in every way. It’s a Delta hub and the airline has done nothing during this makeover (of several years) to keep me from changing hubs and therefore potentially changing airlines.

Second: all major airlines appear to be in a race to the bottom. The rebadging of economy into two class system is interesting in that this proud brand is lowering its standards to compete with the budget airlines of the day.

“Basic Economy” is the new ‘entry level’ class for Delta flights. For international flights the economy cabin has been split into Economy Light, Classic and Delight.

I am sure there are strong economic reasons on occupancy and profit per passenger that make perfect fiscal sense. But why was this class added? Did they really want customers to have more choice on how they fly? Does it mask a pricing policy domestically (which is usually higher than their main competition)? Were they scared of something?

Let me play out this hypothesis: Delta wants to be in the market for every available paying customer. This basic class presumably appeals to budget customers as Delta is not the cheapest carrier. So by widening their fare band to have a ‘no thrills’ option in theory expands their horizon and also (and maybe this is more to the point) responds to the move their major competitors have also made.

However as I sit here as a loyal member what I see is not an expansion of the appeal of the airline but rather a downshift in total offering. At the top end of the program there is no doubt there have been ever decreasing returns. Credit where credit is due, the benefit of miles not expiring in perpetuity is significant, (but more for those who don’t use them). However earning capability through co-branded credit card for example has been reduced significantly.

And then there is Clear. If my most significant perceived benefit of membership is speed through the airport, does this service supplant choosing Delta first? Even more confusing is the fact that Delta is a part owner of Clear.

And Clear is now discounting to get my interest and trial. In totality for $15 a month I can be a member of Clear and use it on any flight as long as my locations are signed up.

In Delta’s defense, this was going to happen regardless of whether they invested or not. However this is another potential draw away from loyalty to their airline.

Here is the doomsday scenario for my relationship with Delta.

- Use Amex Platinum to access lounge when flying Delta

- Sign up for Clear at $15 per month

- Use my bank rewards program for mileage and card use.

All 3 are readily available to me.

These are market forces. Competitive set challenges if you will. So I should expect these market developments to solicit a response. What I am really looking for is a response from ‘my favorite airline’ that continues to reward my loyalty. Truth is there isn’t one or hasn’t been one so far.

And Delta, you and I are in the danger zone. I have no issues of you doing what you think you need to do to protect and develop your business. My continued loyalty doesn’t come as a guarantee for that tho. Have you factored that in?

And here is the real loyalty marketing point.

My last trip and my next trip (all searches done logged in on your site) will not be taken with you. My trip after that will be Delta. It is a mileage reward trip and empties my account of miles. So while I have status for the rest of the year, our balance beyond that is reset to zero.

And you have made no moves to connect with me on.....

- Understanding why two trips were searched and not taken

- How I could replenish my account effectively

- What other rewards I could be using but am not, that would keep us connected.

Over the years this has classically been defined as acquisition and retention campaigns. Very few businesses connect the dots between the two.

Simple question - how many more tickets at Economy light do you need to sell to pay for the loss in my loyalty? I have spent over $60k in flights in the last 2 years. And then there is the on-cost of the ‘flighty’ behavior of appealing to a flier’s lowest common denominator. What does that add up to?

My conclusions are two fold:

1. The balance between love of your loyalists and fear of market development is tipped the wrong way. No-one is thinking through impact of all aspects of business outreach on your most loyal of customers.

2. That one person/team needs to be in charge of your loyal customer base. And they need to be represented at every table (if you are committed to Loyalty in reality). In this example Partnerships/Co-Brand, Services and Experience, Pricing and Finance, New Business Development have all had a say (as they will and should) in what happens to your loyal base. Who was representing us at those tables?

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