If you’re a frequent flyer, you may have heard about the recent changes Delta Air Lines made to its SkyMiles loyalty program. These changes sparked quite the uproar among members, but thankfully, Delta listened to customer feedback and reversed some of the controversial modifications. What’s interesting is that loyalty programs in the travel industry are undergoing significant transformations, with more emphasis being placed on credit card spending instead of miles flown. Delta’s SkyMiles program, being the most popular among fliers, has hopped on this trend and now emphasizes both credit card spending and dollars spent on flights. Other airlines, like JetBlue and Alaska Airlines, have even offered status matches to lure Delta defectors. As loyalty programs continue to evolve, unbundling benefits and offering à la carte services may become the new norm. Additionally, alternative loyalty programs with unique perks, such as those offered by Frontier Airlines and Ennismore, are gaining traction. Expedia has also joined the bandwagon by launching One Key, a rewards program that offers discounts and points across various travel bookings. It seems that loyalty programs are in the midst of a revolution, and credit card spending is taking center stage.
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Delta’s SkyMiles program changes
Delta Air Lines recently made changes to its SkyMiles loyalty program that left many of its members upset. These changes sparked a wave of backlash from customers who felt that the alterations were unfair and detrimental to their loyalty towards the airline. However, Delta listened to its customers and eventually reversed some of these changes, demonstrating the value it places on its loyal customer base.
Shift in loyalty programs
The travel industry is currently witnessing a shift in loyalty programs. Traditionally, these programs have been based on the number of miles flown by customers. However, there is now a greater emphasis on credit card spending as an indicator of loyalty. This change reflects the evolving preferences of consumers and the industry’s recognition that credit card spending is an important factor in determining customer loyalty.
Importance of credit card spending
One of the reasons for the shift in loyalty programs is the growing importance of credit card spending. Airlines like Delta have recognized that customers who use their co-branded credit cards not only generate revenue through flight purchases but also through everyday spending. By incentivizing customers to use their credit cards for everyday purchases, airlines can increase their revenue streams and strengthen the loyalty of their customers.
Less reliance on miles flown
In the past, loyalty programs heavily relied on miles flown as a key metric for determining customer loyalty. However, this metric is no longer considered as significant as it once was. Airlines are now placing less importance on miles flown and focusing more on other indicators, such as credit card spending and the overall value that a customer brings to the airline.
Delta’s popular SkyMiles program
Delta’s SkyMiles program is widely regarded as one of the most popular loyalty programs among fliers. It not only emphasizes credit card spending but also rewards customers based on the dollars they spend on flights. This dual approach allows customers to earn more miles and benefits for their loyalty, making the program attractive to frequent flyers.
Emphasis on credit card spending
What sets Delta’s SkyMiles program apart is its emphasis on credit card spending. By using a Delta co-branded credit card, customers can earn additional miles for every dollar spent, both on flights and on everyday purchases. This approach encourages customers to use their Delta credit cards not only for flight purchases but also for their everyday expenses, ultimately increasing customer loyalty and engagement.
Dollars spent on flights
In addition to credit card spending, Delta’s SkyMiles program also rewards customers based on the dollars they spend on flights. This means that customers who purchase higher fare tickets or fly more frequently will earn more miles and be eligible for higher status levels within the program. By taking into account the amount of money customers spend on flights, Delta ensures that its loyalty program rewards those who contribute more to the airline’s revenue.
Competition from other airlines
Delta’s changes to its SkyMiles program have not gone unnoticed by other airlines. In an effort to attract Delta defectors, airlines like JetBlue and Alaska Airlines have offered status matches to Delta’s disgruntled customers. These offers allow Delta customers to switch their loyalty to a competing airline while enjoying the same or similar status benefits they had with Delta. This competition highlights the value that airlines place on attracting and retaining loyal customers.
JetBlue and Alaska Airlines offering status matches
JetBlue and Alaska Airlines have recognized the opportunity to win over dissatisfied Delta customers by offering status matches. This means that Delta customers who had achieved a certain status level with Delta’s SkyMiles program can now replicate that status with JetBlue or Alaska Airlines without going through the usual qualification process. This strategic move demonstrates the importance of customer loyalty and the competition between airlines to secure and retain valuable customers.
Efforts to attract Delta defectors
In addition to offering status matches, JetBlue and Alaska Airlines have made concerted efforts to attract Delta defectors. They have been actively marketing their loyalty programs and highlighting the benefits of switching loyalty to their airline. This aggressive approach is a testament to the fierce competition within the airline industry and the value that airlines place on securing the loyalty of their customers.
Changes to Delta’s SkyMiles program
In response to the backlash from its members, Delta has announced changes to its SkyMiles program. One of the key changes is a reduction in the number of Medallion Qualification Dollars (MQDs) required to achieve status levels. This change aims to make it easier for customers to reach elite status within the program and enjoy the associated benefits.
Reduction in Medallion Qualification Dollars
Delta’s decision to reduce the Medallion Qualification Dollars required for status levels reflects its commitment to listening to its customers’ feedback. By reducing this requirement, Delta is ensuring that more customers are eligible for different tiers of status within the SkyMiles program. This change is likely to be well-received by members who felt that the previous requirements were too stringent.
Increased access to Sky Club lounges for credit card members
Another notable change to Delta’s SkyMiles program is the increased access to Sky Club lounges for select credit card members. Previously, access to these exclusive lounges was limited to customers who achieved a certain status level within the loyalty program. Now, Delta is expanding access to include certain credit card members, further incentivizing customers to use Delta’s co-branded credit cards and enjoy the associated perks.
Comparison to American Airlines’ loyalty program
When comparing Delta’s SkyMiles program changes to those of American Airlines, it is clear that Delta received a more significant backlash from its members. While both airlines made changes to their loyalty programs, American Airlines did not face the same level of outrage as Delta. This disparity highlights the challenges that airlines face in balancing the evolving needs and expectations of their customers while implementing changes to their loyalty programs.
Less backlash compared to Delta
American Airlines’ loyalty program changes, although similar in nature to Delta’s, did not result in the same level of backlash from its members. This could be attributed to differences in the way these changes were communicated or the different customer demographics and expectations of each airline’s loyalty program. Regardless, American Airlines’ ability to navigate these changes with minimal backlash serves as a lesson for other airlines considering similar alterations.
The future of loyalty programs
The future of loyalty programs in the travel industry is likely to involve a shift towards unbundling benefits and offering à la carte services. Instead of providing a one-size-fits-all loyalty package, airlines may opt to allow customers to select and pay for the specific benefits they desire. This personalized approach caters to the varying needs and preferences of customers, while also enabling airlines to tailor their loyalty programs and maximize customer satisfaction.
Unbundling benefits refers to the practice of separating loyalty program perks and allowing customers to choose the specific benefits they want to receive. This approach recognizes that not all customers have the same priorities or preferences when it comes to loyalty rewards. By unbundling benefits, airlines can offer a more tailored experience that aligns with the individual needs and expectations of their customers.
Offering à la carte services
In addition to unbundling benefits, loyalty programs may also start offering à la carte services. This means that customers can customize their loyalty program experience by selecting and paying for specific services or privileges that are important to them. For example, a customer may choose to pay for extra legroom, priority boarding, or access to premium lounges, rather than receiving a standard set of benefits. This à la carte approach enhances flexibility and allows customers to choose the rewards that are most valuable to them.
Alternative loyalty programs
While traditional loyalty programs like Delta’s SkyMiles and American Airlines’ AAdvantage program dominate the market, some companies are taking a different approach. Airlines like Frontier Airlines and hospitality brand Ennismore are offering unique loyalty programs with distinct perks that stand out from the traditional model. These alternative loyalty programs cater to customers who are looking for different and unconventional loyalty experiences.
Frontier Airlines and Ennismore’s unique perks
Frontier Airlines, known for its low-cost model, offers unconventional perks to its loyalty program members. These perks include priority boarding, seat selections, and even discounts on bags and seat upgrades. By offering these unique benefits, Frontier Airlines distinguishes itself from other airlines and appeals to customers who prioritize cost savings and value-added services.
Ennismore, a hospitality brand, takes a different approach to loyalty programs by offering perks that go beyond the typical travel rewards. In addition to benefits like room upgrades and late checkouts, Ennismore’s loyalty program grants members exclusive access to cultural and social experiences. These unique perks reflect the brand’s focus on delivering memorable and personalized experiences to its loyal customers.
Different approach to loyalty
Frontier Airlines and Ennismore’s alternative loyalty programs demonstrate that there is room for innovation and creativity in the travel industry’s loyalty landscape. By offering perks and benefits that go beyond the traditional model, these companies are appealing to a different segment of customers who are looking for unique and unconventional loyalty experiences. This alternative approach challenges the status quo and encourages other companies to think outside the box when it comes to loyalty programs.
Expedia’s One Key rewards program
Expedia, a leading online travel agency, recently launched its own loyalty program called One Key. This rewards program aims to provide customers with discounts and earn points across various travel bookings made through the Expedia platform. With One Key, customers can unlock exclusive deals and benefits, enhancing their overall travel experience.
Discounts and points across travel bookings
One Key offers customers discounts on hotel bookings, flights, and vacation packages. By leveraging Expedia’s extensive network of travel partners, customers can access exclusive savings and enjoy a more affordable travel experience. Additionally, customers can earn points for every dollar spent on eligible bookings, which can be redeemed for future travel, further adding value to the program.
New offering in the market
Expedia’s entry into the loyalty program market with One Key presents an alternative for customers looking for a comprehensive rewards program that spans their entire travel booking journey. With its wide range of travel offerings and established reputation, Expedia is well-positioned to appeal to a broad customer base and provide a valuable loyalty program that complements its travel services.
In conclusion, loyalty programs in the travel industry are evolving to better meet the changing needs and expectations of customers. Delta’s recent changes to its SkyMiles program, while initially receiving backlash, demonstrated the airline’s commitment to its loyal customer base by listening to customer feedback and implementing modifications. As the importance of credit card spending grows, loyalty programs are placing less emphasis on miles flown and more focus on customer spending and overall value. Other airlines are also making efforts to attract loyalty program defectors, showcasing the highly competitive landscape of the industry. The future of loyalty programs may involve unbundling benefits and offering customizable à la carte services to cater to individual customer preferences. Additionally, alternative loyalty programs offered by companies like Frontier Airlines and Ennismore provide unique perks and experiences, diversifying the loyalty landscape. Expedia’s One Key rewards program further adds to the market with its comprehensive offerings and discounts across a wide range of travel bookings. Overall, loyalty programs continue to adapt and innovate to maintain customer loyalty in the ever-evolving travel industry.