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I spent some time this week thinking about simple changes loyalty programs can make to win more business while improving their relationship with high frequency business travelers. On Tuesday I mentioned an easy fix for hotels so today I will turn my focus to airlines. For the most part, commenters agreed with Tuesday’s post on my hotel suggestion though I suspect less will agree on this issue.
I recently started on a new contract where United Airlines is the best airline to serve the commute I will be taking weekly for several months. The time commitment of connecting is taxing for a weekly traveler who already spends too much time in the air so a wide range of business-friendly nonstop flights are critical. Last week I sent an email to the United status match program laying out the specifics of my upcoming travel and how I would trade at least $10,000 of my business in exchange for immediate Premier Platinum status. I would have hit the terms United lays out on the status match challenge page in half of the time allotted.
The response I received from United was a simple “No, you can only status match once every five years”. I can’t actually remember status matching with United but even if I had, their response made me think.
The denial did not bother me in the least. United surely doesn’t owe me anything but I am curious if United really does not like my offer or the design of the status challenge could be improved? No airline has the resources to work with travelers on a case-by-case basis but I suspect they would have wanted my business in this situation.
Status challenges come in many shapes and forms on different airlines. United and Delta grant the status immediately and require the traveler to reach a tough threshold of flying in a short period of time assuming they have a similar status on another airline. Others like American will charge you a flat fee to attempt the challenge without having a similar status on another airline. The design of the various rules seem geared toward granting immediate status in exchange for the immediate business of high revenue passengers. I believe there is a better way to achieve this goal.
My idea to improve status challenges is to design them in the following way.
- Status challenges are unlimited
- Desired status is granted immediately
- No similar status is needed on another airline
- A significantly large deposit is required up front from the challenger which is only returned when the challenge is met
If the goal of a status challenge is for an airline to capture high revenue business travelers, then I think this design is better than what is currently offered amongst US airlines. The unlimited and immediate match offers an easy transition for frequent fliers while the significantly large refundable deposit ensures the challenge is truly capturing demonstrated high revenue customers.
A counter argument would be that a status challenge is designed to capture a high frequency business traveler for the long term as opposed to the short term. While I agree to some respect, I would argue my value to the airline as a business traveler in the short term is far more valuable now then it could ever be as a leisure traveler paying my own way over the long term. In no single year will I ever spend as much as I am able to offer an airline over the course of the next few months.
Another counter argument could be that this status challenge design would create too many elites. To that I would point out that last year American Airlines was willing to match EVERY 1K elite (initially every status holder) on United Airlines for absolutely no commitment. Having too many demonstrated high revenue elites does not seem to be a top concern for the airlines.
The bottom line
In the US, air travel is becoming more and more of a commodity and unfortunately true loyalty is eroding as personalization continues to return less on the investment. I believe status challenges are a great way for airlines to capture high revenue passengers when they are most valuable but the current design of programs often prohibits this. I offer a deposit-based design to better achieve the goals of a status challenge by offering a easier transition for high value customers.
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