For years, consumer advocates like me have been warning consumers like you that loyalty programs aren’t the “win-win” propositions companies claim they are.
To which loyalty program apologists, whose judgment is too often distorted by the intoxicating Kool-Aid of points and miles, countered: Prove it!
Well, now we have that proof.
A new study of hotel frequent-guest programs suggests that, far from costing companies money, the programs increase their share of room nights by anywhere from 150 percent to 500 percent. Just over 7 of 10 guests purchased at least one additional room night with real money, according to the study by Phoenix Marketing International. Read more “Read this before you sign up for a loyalty program”
I came to that somewhat Magrittesque conclusion after hearing from Julie Eisenberg, a loyal United Airlines customer who last year spent $1,700 per ticket to fly her partner and herself from Washington to Sydney.
For just $600 more, plus 30,000 miles, United promised her a chance to upgrade into a slightly roomier seat. But the ticket agent she spoke with failed to mention that there were no guarantees and that the money and miles would be deducted from her account then and there, many months before her flight.
Memo to corporate America: Your customers are not walking dollar bills.
You don’t have to be a consumer advocate to know that. Just attend a random corporate event and you’ll see that companies don’t always see their customers the way they should.
The meeting I attended for a major transportation company — that shall remain nameless — was impressive. C-level execs in their Italian suits showed off some brand-new products that wowed everyone in attendance. But whenever they talked about the customer, and particularly customer satisfaction, it was in a detached, almost clinical way.
Alright, it isn’t just the baggage surcharges and change fees. Airlines have cut capacity and raised fares, and business travelers are coming back after a long absence. But with United Airlines posting its first profit in three years and Delta recording its best quarter ever, you’ve gotta wonder — how much do fees and surcharges have to do with it?
We have an answer, thanks to Amadeus and IdeaWorks. Disclosed ancillary revenue activity from the world’s airlines jumped 43 percent to $13.5 billion in 2009, compared to a year before, they reported.