Published on: June 19, 2014
This commentary is available as both text and video; enjoy both or either … they cover the same topic, but are not identical. To see past FaceTime commentaries, go to the MNB Channel on YouTube.
Hi, I'm Kevin Coupe and this is FaceTime with the Content Guy.
I'm coming to you this morning from Denver International Airport, where I'm on my way someplace, as I often am. Being here has gotten me thinking about the announcement last week by United Airlines that it is changing the criteria of its frequent flier program, rewarding people based on the amount of their ticket rather than the number of miles that they fly, and offering better rewards to people in higher levels, such as silver, gold and 1K fliers. It is a decision similar to one made by Delta, and American is said to be moving in this direction as well.
While the move has gotten mixed reviews in the press, I completely understand the impetus behind it. When you think about it, isn't this what every loyalty marketing program should endeavor to do - reward the people who are your best customers and who spend the most money with you? A supermarket loyalty program, for example, would not reward people who go into the store twice a day, if they only spent a few bucks there each time; no, they'd reward the person who goes once a week but spends $100 or more each visit. This makes perfect sense.
I'm certainly not going to complain, even though I think it is likely that I'll be getting fewer miles in the future. I've been doing this a long time, and I get treated reasonably well by the airlines because of it. (I've been married for 31 years, and Mrs. Content Guy would suggest that I've been gone for between seven and 10 of them … which, she would also suggest, is the basis for a happy marriage. I think what she really means is that it is the easiest way to be married to me, and I'm hardly in a position to disagree.) There are plenty of other things to complain about when it comes to modern air travel…
And that's really the point, and why United is getting blowback on its announcement.
I don't think United has sold this particularly well. They keep saying that this is ultimately good for customers, but nobody really believes them, mostly because it comes in the context of a series of other decisions that seem anything by customer-focused. It isn't just that planes are more crowded than ever - who can blame them for actually wanting to fly at capacity - but rather that they are more sardine can-like than ever, and that they are finding ways to charge extra for pretty much everything. There always are rumors that at some point some airlines probably will begin charging to use the bathroom … and let's face it, when that happens, nobody is going to be surprised. Not really.
At some level, it seems to me, pretty much all of the airlines seem to be guilty mostly of being so focused on their bottom lines that they're forgetting that to have a truly sustainable business model, they have to take care of the customers who are spending money for tickets. It is the same as a retailer who is so focused on Wall Street that they forget about Main Street … it seems smart in the short-term, but in the long run, the approach undermines the basic premise upon which the business is supposed to be built.
A lot of executives spend time on airplanes and in airline terminals, and I wonder how often they look around and, instead of complaining, say to themselves, "Do I treat my customers the way that airlines treat their customers? How do I do it better? How do I - God help me - do it worse?"
They need to ask and answer that question very seriously. It can be the difference between a business that can take flight in a sustainable way, and one that is likely to eventually be grounded.
That's what is on my mind this Thursday morning. As always, I'd like to hear what is on your mind.
- KC's View: