Why I love Delta’s new loyalty program – and why you’ll probably hate it

http://www.shutterstock.com/gallery-138331p1.html

Loyalty programs may be the single greatest scam pulled on the traveling public.

Want to segment customers into castes of “haves” and “have-nots”? Create legions of blindly brand-loyal passengers? Lift your profits to avaricious new heights?

Nothing does it like a clever frequent flier program.

Yet, as a consumer advocate, not a day goes by that I don’t receive a despondent email from a platinum cardmember who spent every travel dollar with a company, only to come up empty-handed, betrayed by a program’s vague promises.

Who wouldn’t be fatigued after hearing from thousands of unhappy passengers whose miles expired or were denied “elite” status or were banished to the back of the plane on a Transpacific flight? Who wouldn’t be furious at the travel companies whose adhesion contracts allow them to pull this barely legal bait-and-switch?

And that is why I love Delta Air Lines’ new loyalty program.

The nation’s number-three air carrier recently announced it would restructure its SkyMiles program in 2015 so that award travel would be earned based on ticket price instead of the number of miles flown. It’s the first legacy carrier to tie points earned directly to how much you’ve paid, and in doing so it’s incurred the wrath of many customers. But for the first time in decades, the cold reality of the SkyMiles program will send many of us into mileage-collecting rehab, where we can be weaned from our frequent flier addiction and finally make a more informed and rational booking decision.

It’s about time.

Let me be clear: SkyMiles remains patently unfair to most air travelers. According to its terms, Delta can change its program rules at any time without notice, confiscate your miles, or terminate your membership whenever it wants to. Don’t believe me? Read the fine print for yourself. Few air travelers actually do.

Delta, no doubt, is licking its chops at all the extra money you’re about to fork over in exchange for the possibility that you’ll be treated with just a little dignity on its flights. Studies suggest loyalty program members spend roughly 40 percent more than non-members. I suppose the hundreds of millions of dollars Delta earned from its loyalty program last year — $675 million alone from the sale of SkyMiles to American Express — just wasn’t enough.

Delta apparently believes it can move the goalposts on its program again, and get away with it. Granted, the experience in the back of the plane is beyond awful today, from seats squeezed closer together to “you-get-what-you-pay-for” attitude from the flight attendants. I can’t blame anyone for playing the points game and trying to score an upgrade to an Economy “Comfort” seat, which has roughly the same amount of legroom as a pre-deregulation coach class seat, and at the same time, in an unintentional moment of honesty, admits the other seats in steerage class are uncomfortable (which they are).

But something tells me a lot of Delta’s passengers aren’t going to fall for it this time.

As America’s number-one critic of travel industry loyalty programs, I’m truly grateful to Delta. The days of casual mileage collecting could disappear after 2015, at least if you’re a Delta frequent flier. The new SkyMiles effectively clamps down on many of the mileage-earning shenanigans, such as earning “free” flights by collecting the sides of pudding boxes or U.S. Mint coins. It could also curtail mileage runs, the foolish act of spending your employer’s money to fly nowhere at the end of the year, just in order to become a preferred customer and have access to scarce space-available upgrades. Also, and perhaps most importantly, it ensures the biggest spenders get the best perks — not the fanboys who learned to hack the system.

Maybe, just maybe, more customers will make a rational decision about their next flight itinerary, not one distorted by a pathological obsession with miles, but based on ticket price and convenience. A veil is slowly being lifted from the traveling public, and at last, they’re seeing loyalty programs for what they really are: as habit-forming schemes that impair your ability to make a clear-headed decision about travel and that almost always benefit the travel company more than you.

Programs like SkyMiles have deceived an entire generation of air travelers, and in its attempt to squeeze even more money from us, Delta has inadvertently confessed the truth about how companies feel about loyalty. It doesn’t matter how much you fly, but how much you spend.

And oh, by the way, the loyalty goes only one way. As a bonus, the airline has angered a small army of program apologists who lurked on blogs and message boards, quietly reaping six-figure referral fees by endorsing the loyalty lifestyle from their electronic perches. These unpaid airline employees once eagerly defended and rationalized even Delta’s most customer-hostile policies, but now they, too, see the folly of their misplaced allegiance.

Welcome to the club, guys.

So thank you, Delta. And here’s hoping American Airlines and United Airlines follow you down this flight path soon. You’ve done your best customers — the 99 percent who fill the economy class seats on every flight — a real favor.

Are loyalty programs a scam?

View Results

Loading ... Loading ...

Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or contact him at . Got a question or comment? You can post it on the new forum.

More Posts - Website - Twitter - Google Plus

  • BMG4ME

    Sorry, maybe I should have been more sensitive but I assumed that the people reading this article were frequent travelers that had similar opportunities to me to earn miles.

  • Marcin Jeske

    Quite frankly, they don’t need your loyalty as much if you live in a hub city, because for most flights they offer you a better option (direct) and you have limited other choices.

    Assuming the airline’s pricing algorithms are working properly… and really, we know those things are magic, then on average each seat-mile you fly is just as valuable to them as someone else’s. Sure it is frustrating that ticket pricing creates crazy scenarios like it being cheaper to fly through a hub city than to a hub city, but that’s just because Delta wants to squeeze every possible dollar out of you, and they still do, SkyMiles changes notwithstanding.

    Crediting miles based on spend makes it clear that you are just overpaying for tickets by a percent or two… and Delta is keeping that for you to spend at the “company store”. Crediting miles based on distance encourages those who choose less convenient routing, those who go out of their way to fly an airline, and those with flexibility. Yeah, it can be deceptive and frustrating, but it is a marketing tool for an airline, so no surprise.

    But maybe Chris is right… traditional mileage programs have created some very disfunctional behavior (mileage runs where flyers just hang out at the airport, crazy zig-zag routes to exploit oversights in fare rules, and complicated rules based on things like fare class). Perhaps Delta’s changes are a needed rehab… their just not a very good loyalty program.

  • Marcin Jeske

    No argument that an $800 ATL-LGA ticket is more lucrative than a $800 LGA-LAX ticket… yet in Delta’s new scheme, they are rewarded exactly the same. (I assume you noticed that issue and notched the ticket down to $700 to make your point seem strong.)

    Clearly, Delta is still not rewarding customers based on how much they profit from a sale, but how much revenue it brings. This makes sense in businesses where each sale has similar margin, but not as much in a time-limited inventory business like travel. You would want to use a loyalty program to encourage customers to use capacity that would otherwise go to waste.

    That’s what award travel encourages… and by awarding miles based on distance, it gives people an incentive to fly more and longer, using up inventory. I would be foolish to say I understand their business better than Delta, but I do think they are mistaken in the way they changed the program.

  • Marcin Jeske

    The thing to remember with boarding processes is the dwell time in the aisle… if everyone just walked onto the plane and immediately sat down in their seat, then an ordering of back to front, with window/middle/aisle order for each row, would be ideal and quickest.

    In reality, people walk at different speeds, miss their rows, and when they do get to their row, need to stow carry-ons and slide in. That means that a person generally spends more time standing in the aisle at their seat (or waiting on someone in front of them) than actually walking down the aisle.

    The windows/middle/aisles method works well because it almost eliminates people needing to back out of their seats, while the row randomness as you point out spreads out the people dwelling in the aisle. Apart from the strict ordering, the only optimization I can think of it to have multiple lines (front, middle, back of plane) and interleave them as they enter the aircraft, guaranteeing that the back of the aircraft won’t get starved if a bunch of fronters board in a glob, maybe sending a bunch of tailies on occasion to clear the aisle… ahh… back to the simulator.

  • gracekelley

    I miss the days when people would listen to the automated announcements and not one person employed by the airline had to directly ask anyone to comply with the rules because they’d already have done so by listening to the first three automated announcements the airline paid thousands of dollars to have played before shutting the aircraft door

  • gracekelley

    They don’t care. In fact it is obvious that the people who paid the most make the least amount of noise.

  • disqust101

    What an odd and woefully incorrect post. Delta makes it easiest of all the airlines to get status without ever stepping foot in a plane.