MilesBuzz! - We are the enemy

I'm suprised by the response (or rather lack of it) to Randy's editorial in the December Inside Flyer.

My own two cents is that the web will serve only to disseminate more information, and make information freely available to all. Companies will have to deal with it.

Will this cause an erosion of benefits? It depends. For some it might, but in a general sense if you aggregate the benefits over all members I do not think that it erodes benefits.

In a way it would be better if there were no promotions, and programs could be judged on their regular benefits. But as long as the promotions are there, I'll take full benefits from them, and so would I hope all the FlyerTalkers.

I actually had not yet read it, PG, but thanks for highlighting it for all of us. In my view, being informed is a good thing, if not essential, and in that sense it helps make the playing field more equal by providing more accessibility to info for all. Also if the pie stays the same size and I have to give up a little to share with more other people, than that's fine too. I can live with that- somewhat happily.

BTW- Today Dow Jones pulled out of a DLJ conference because reporters were not allowed to cover the sensitive investment information to be presented to analysts. They stood alone in pulling out. Only the NY Times made a statement saying they would not partake and support the conferenc next year unlees it is opened up to provide equal access to info for all. Thats why the WSJ and NY Times are the number 1 and two papers I read- integrity and fairness!

PG, I agree. But I think that what Randy is saying is that because the internet disseminates info so quickly and widely, the programs may stop doing targeted promotions because their non-targeted members find out about them from info disseminated via the internet, and then demand those benefits for themselves, costing the programs millions. Even if they have the software set up not to except "registration" from those that were not "invited," the public will find out via Boards such as this and call and want the targeted benefits or be disappointed.

So I think the question is "Will the programs stop doing targeted promotions because they can't keep the offers confidential?" I don't think it is being suggested that any of this info be stopped or censored. At least that's how I read it.

[This message has been edited by PremEx (edited 12-06-1999).]

Actually, programs will likely do *more* targeted promotions in the future because technology will become more sophisticated and allow them to better direct information at individuals. This is one of the things we'll be talking about on Talk City on Wednesday night and in our upcoming magazines.

I agree with doc that it is better to have a level playing field rather than a system where some privileged people benefit. In general, I favor benefits being accessible to all, rather than a chosen few.

Should companies treat incoming members better than existing members? I don't think so, but that is how they sometimes are. Should some people qualify for a promotion, while others do not. I do not think so either.

Pam at Webflyer, that may be, but it is not what Randy speculates in his editorial: The point being that the ease of which this information is being disseminated makes this a most difficult situation for programs. While I told Jeff I would ponder the state of the union on this matter, my hunches are that the Internet eradicates the idea of being one-to-one with a single frequent flyer.

PG..I agree.

Target marketing will not stop; it will get smarter. Offers will have unique serial numbers that can be activiated only once. Many companies do this already. Of course, if the designated recipient is not interested in the offer, he could pass it along.

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I understand that target marketing will be capable of getting smarter. But I don't think that's the point of Randy's editorial. Please re-read it. (http://www.webflyer.com/@flyer/domestic/dec99/airmail.htm) The point is that even if they manage to get the offer only to their target, the target blabs about it on the internet and then you and I call our programs and demand the same offer. What should the programs do at that point? Cave in and give it to us costing them millions, or say sorry and dissappoint their loyal customers. That's the point of the editorial, at least how I read it. Not if if they are technically able to limit the target.

I'm of the opinion of if I hear about it and qualify under the same terms that the target person received, then I should be given the opportunity to participate as well.

Absolutely agree - if my profile matches the one who got the offer, I should get the deal too. Amex would not budge on that issue when giving my husband a better deal than me. The only difference was our sex. Use of card, time applying for card, etc all the same. Hmmm - any lawyers out there??

I don't think the Internet means the end of targeted offers; it means the end of sneakiness. Those are two different concepts.

Case in point. A few weeks ago I got a card from FirstUSA informing me that if I spent at least $4000 with my BA VISA card in November + December, they'd double the miles. Fine. I posted this news on FlyerTalk in the British Airways zone. Almost immediately a bunch of other BA flyers posted the bonus mile offer versions THEY had received -- some better than mine, some worse. Made a lot of people feel miffed -- me included.

If FirstUSA wants to classify cardmembers according to their historical activity levels and calibrate different bonus packages for different member classes, that's beautiful. But do it in the open; make the tiers and calibration rationales public. When the card issuer (or whomever) tries to keep you in the dark, and make you believe that the targeted offer you got is the only offer there is, THEN customers get mad and the target-marketing stuff backfires owing to Web information sharing. That's what Randy is talking about, I think.

It doesn't follow that because customers can no longer be isolated from one another, you can't target-market. You just have to make your targeting apparatus fair and open to view.

It may not be open to view, but that doesn't mean that we don't know what it is. Target-marketing is supposed to reward you for doing something that you don't normally do, and not something the company thinks you're going to do anyway without any sort of promotion. That's why infrequent flyers get the double-mile promotions and the platinums don't.

So even if the airline were to say that this offer is only available to flyers who flew less than 2000 miles last year, it wouldn't make anyone feel better. It would just be specifically quantifying what we already know. All the platinums would still be calling in demanding that they should be treated no worse than the infrequent flyers.

BearX220, at first I thought you meant the end of sneakiness for us. After I read it again, I see you mean the end of sneakiness by the companies. I'm Ok with that now. http://www.flyertalk.com/forum/smile.gif

PremEx, I am not challenging Randy's editorial or the opinions of those on this board. I'm merely relating what we are hearing from the industry. (Randy's heard it, too. In fact, I heard it from him first...) Most programs are investing or have already invested in sophisticated software that allows them to segment their members by travel preferences, number of flights flown, destinations, partner purchases, just about anything. Some are already practicing one-to-one marketing, in which you get an offer from a program that no one else gets. Most of the contacts I've spoken with see think their members will actually enjoy this approach because the promotions they receive will be tailored to their needs and travel habits. Whether it's the right thing or the wrong thing for programs to do is debateable, and forum is a good place for that debate to take place. But these sort of marketing efforts are coming, and coming in a big way. That's a certainty.

Also, under Marriott there is a thread about how people are receiving different bonus offers for upcoming stays. The bonus seems to be based on status and previous stays.

I want to put my two cents in. The problem with targeted promotions is that some loyal flyers never get promotions because they don't fit the profile for the offers. I am a CO Platinum Elite and have gotten NO special offers in the last 18 months. My wife, also Platinum Elite, has gotten 4-6. This does not make me happy, needless to say, and if I'm Platinum, I should be as valuable as she is and get approximately the same number of offers. This is waht happens when a marketing department tries to get too narrow with offers. I wonder if other CO Platinum elites have had an experience similar to mine?

I definitely agree with you, Vulcan. If frequent travel programs are going to do these targeted promotions, they should review the number of promotions that their most loyal customers have been offered and send them a promotion to maintain a level playing field and to keep things fair.

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Cheers.

Leo.

As a CO Gold, heading for Platinum, I've received absolutely nothing out of the ordinary.

There was a recent thread in the CO section about how CO was sending out "Thank You" kits (containing PC passes, upgrade coupons, etc.) to a narrow subset of OnePass members... there may have been a strategy to the list of recipients, or not... all I know is, I've spent $20,000+ with this airline this year; I think I should be in any group of customers getting a handful of PC passes as a thank-you; thanks to FlyerTalk I know they were being doled out, but not to me; and I'm unhappy. That's the crux of the problem, right there.

As someone who had worked in the direct/target marketing industry, I will be the devil's advocate here.

Yes, direct/target marketing faces challenges now that consumers can better share information.

PG wrote that there should not be a system "where only a few privileged benefit" and you favor benefits be "accessible to all, rather than a chosen few."

Isn't that the antithesis of been an elite flyer? If I am Joe public, why can't I make the same statement that you made, questioning why you have benefits that I as Joe Public cannot access?

No doubt, the answer is: I have earned it, I have proved myself to be a more valuable customer to this airline than you, the average flyer, have. And that is true, you bring in more money which is why you are treated differently. And that is pretty much the bottom line, money.

Target marketing has brought in more money to the companies, be it increased revenue, or decreased cost, or both. Companies have also calculated quite in sophisticated models that 1) your behavior will not change i.e. even if you are upset by it, you will continue to be a customer, and 2) even if a few loyal customers leave, the new customers that the promotion brings in will exceed or make up for the ones that left.

Some of you may bring up anecdotal evidence that you have left a particular company and look at how much revenue company X has lost. True, but overall, studies and real life examples have shown that the target marketing have worked. It made money for the companies even if the loyal customers did not get the promotion and upset by it, which is why they are still doing it. After all, like UserMark says, why reward you for the revenue you will bring in anyway?

Now, if you think this is not fair, you can vote with the ultimate weapon: your behavior. If enough people walk/complain, target marketing will fail. This particular brand of marketing will establish a poor record; it will prove to be a money loser and companies will stop doing it.

My own prediction is that target marketing will change dramatically. An alternative is that a company may make its offers viewable to the public but have a strict qualification rule. I don't think that will work since 1) a company may have thousands of offers going on the same time, 2) the complex qualification rule and terms and condition may discourage the target, and 3) the promotion may not reach its intended target. Anyway, I am digressing into the future of the industry. But my point is that the term "fair" is not applicable in this circumstance. Afterall, after much study, the company considers that this is only fair to itself and to its sharehodlers to bring in more money. If you don't like it, by all means make youself heard, but it ain't fair to accuse it of something that it is not.

[This message has been edited by kyklin (edited 12-08-1999).]

I agree.. one promotion I found good and made sense is the promotion from Northwest a year or so ago (not sure if it still exists). The promotion offer upgrades to 1st for connecting flights in full coach. I think it makes sense.

Airlines really do not need to do extra for us doing what we do. But promotions that offer double miles for new routes where we flew alternate airlines before and also connection bonuses (fly your airline and get a promotion for flying a connection vrs a direct on someone else). For example, United could offer bonus miles for connecting in Denver or SFO or Chicago for passengers originating elsewhere. This would increase revenue...

Makes sense!

Taking PremEx's advise, I read Randy's editorial twice. Then a third time.

Then did some thinking and came up with the following:

*Targeted promotions will not be going away. They may get more sophisticated via computer software.
*In fact there will probably be more. But Frequent Flyers are a chatty bunch and even if only "united Mileage Plus members who contribute to FLyertalk" get a special promotion, someone is bound to tell someone else who will tell someone else. And So on and So on.
*I'm wondering how tough the programs will be in enforcing the rule of giving the bonus to ONLY those getting the targeted e-mail. If enough frequent flyers bombard the program office with copies of the offer, careful records of teh promotion... I think in some cases the programs will cave in and honor the promotion (when there are also local consumer reporters to call with "MCI didnt' honor their 50 gazillion bonus points for long distance." Plus FLyertalkers.

HOPEFULLY THE FOLLWING MAKES SENSE:

Randy raises a good question: can a one-on-one relationship exist in cyberspace?
I don't know. I think we are all basically nameless, faceless people designated by a rich soup of airline/hotel/car rental and other account numbers and profiles EXCEPT when we can get someone to listen for making a complement or complaint.

The programs are too big to be friendly with everyone one-on-one. And cyberspace is getitng bigger and bigger.

I think the only ways to get a one-on-one relationship is either by talking by phone or meeting someone in person (like the Flyertalk get togethers.)

AGAIN, I HOPE THE ABOVE MADE SENSE.

LAX1k: there was a bonus mile promotion for flying in and out of Denver to several major U-A series. It was a mailing, I guess everyone got but.

As for giving out this secret information: if it's not done here it will be done through another travel forum or though gossiping flyers. I salute my BIG BRUDDAR PREMEX's attitude on this: I too PremEx try to tell as many people about bonus promotions.

kyklin - anyone can become an elite flyer. The benefits of being an elite flyer and the requirements of being an elite flyer are well known. Contrast that to targeted marketing where not everyone can benefit.

As an example Karen2 perceives sexual discrimination when she received a different bonus offer than her husband. I (though male) did not receive that offer at all, so it seems that maybe there is some racial discrimination too http://www.flyertalk.com/forum/smile.gif

I'm either confused or stupid. I mean, aren't we all a part of the greatest "targeted marketing" scheme in the world, ie, frequency programs?

I've seen plenty of marketing programs where a certain group of people are targeted with a special promotion. In my own work, we offer all kinds of incentives for those who do not take advantage of our services to do so. Why not offer such incentives to current customers? Simple: they already know how wonderful we are, and we already treat them like gold, so we don't have to bribe them to try us out.

I'm never terribly disappointed when an offer is discussed on these pages that I have not been invited to participate in, and am always grateful that sometimes marketers reward me for something that I have to do anyway.

While some "discriminatory" practices DO irk me (like the free rcc for non n.a. elites), I understand the marketing involved and try not to get too upset.

We have seen some targeted promos go awry as a specific result of FT, and as Rudi always says, "If I get the benefit that I was not offered, great. If not, I cannot complain."

And guess what? No matter how many offers NW sends me (and they send me a lot: double miles for 2 months, free upgrades, etc.), I still ain't gonna fly that airline...

I say bring on the targeted marketing! The more specifically tailored to me it is, the better! If someone else doesn't get the same offer, tough. And if someone gets a better offer than me, well then good for them...If I truly feel "discriminated against", I'll walk http://www.flyertalk.com/forum/smile.gif

BTW, I have to agree that all the internet does is shed sunlight on marketing strategies, which, IMHO, will allow marketers to continue the practice for reasonable and legitimate business purposes (luring good customers from other services, encouraging someone to try a service for the first time, etc), but will cause the cockroaches (targeting based on gender, race, etc) to scurry...

[This message has been edited by kokonutz (edited 12-08-1999).]

Coconuts - FF programs are available to all, not a bunch of people who get a piece of paper in their mailbox. What is the definition of targeted maketing "getting out of hand"? It seems that you are saying that it is good, unless done too much, but I have a hard time figuring out what too much is, and what the threshhold is.

I think that we all like un-targeted marketing. Hilton's targeted marketing was well received last year. But it was well received specifically because it was available to anyone (who found about it). And since we all benefited, we loved it. But when the same promotion appeared this year to be available only to some people and not to all, NJDavid led the revolt.

HEY, there already IS real-time chat on FT! PG posted while I was refining my thoughts above!!!

I agree that ff programs are available to all. But elite benefits certainly are not. They are only available to those customers who fly a certain amount (i.e. are "targeted" by the airline). BTW, these benefits are not earned as we are so fond of saying. They are granted as a part of the airline's marketing scheme, TARGETED at their best customers. And targeted to the amount you actually fly with them. And in fact, it is those elite (targeted) benefits that I care the most about!!!! So I would say that we all like targeted marketing in that case.

So if certain benefits are available ONLY to those who fly 50,000 miles/year on an airline, why is it any different if an offer is ONLY made to someone who flew 0 miles on that airline but 100,000 on another?

You cannot have your cake and eat it, too. (Punki's view on this cliche notwithstanding http://www.flyertalk.com/forum/wink.gif)

If I book my tickets on United connection on the web (I do not) and already know of the convenience and benfit of doing so (I dont actually think it is) then why would I get upset that United wants to give a bonus to people who book a ticket that way for the first time in an effort to show them how good it is???

I guess what I am saying is be careful what you wish for. If 1k or AA exec platnum or whatever were made available "on a level playing field" to every customer out there, you certainly would not like the result!!!

It just seems to me that we are very proud and happy when we are in the "targeted" group, but get upset when we are not.

All I am saying is that I am not interested in a level playing field when it comes to frequency programs. I like being targeted when I am and can live with it when I am not...And, as I say if it ever gets to a point where my own personal threshold is (like pornograpy, I know it when I feel it http://www.flyertalk.com/forum/wink.gif), there's always USAirways http://www.flyertalk.com/forum/wink.gif


[This message has been edited by kokonutz (edited 12-08-1999).]

I'll say again - anyone can become an elite by meeting the requirements stated. This is not targeted (in the sense of not being by invitation only).

I make a distinction between the two scenarios:
1) An offer in the mail stating "you get 10,000 bonus points for making X stays between Nov 15 and Jan 15".
2) An offer on the company web site saying that "you get 10,000 bonus points for making X stays between Nov 15 and Jan 15".

In the first case only the person getting the mailing is allowed to get the bonus. In the second case everyone is allowed to. Whether or not they can do so or choose to do so is a different matter, but nobody is excluded.

The current Marriott bonus offer (discussed under the Marriott forum) is a variation of the first scenario. There, the maximum bonus you can get is dictated by what offer you received in the mail. Or if you do not get an offer in the mail, there is no bonus for you.

Nutz? What do you mean? Gotta go with PG here! You buy the tickets and fly the miles you are elite plain and simple!

PG: I respectfull disagree. You see, anyone can receive those targeted marketing offers by meeting the companies' requirements as well! http://www.flyertalk.com/forum/smile.gif

But what if I don't meet those requirements? Well, that is unfortunate for you but it is not the airline's fault.

The reason why the companies do these promotions is because through modeling or whatever technique, they discover that behavior-wise Joe Public on average will spend 20% than what they will spend if they did not have the promotion.

They have also discovered that the most loyal customers, such as you or me, will only spent 1% more (which may be a lot e.g. 1% of Stimpy's travel budget is 428% of Ken's but that's irrelevant). Anyhow, the cost of informing you and me of this promotion is greater than the increased revenue. Therefore, why should I promote you?

So say again if I am Joe Public, I think it would be unfair if I say "I want to get all the benefits of elite flyer without spend the money by flying e.g. meeting the requirements." Likewise, you can't get benefits you do not qualify for.

So, in theory, there could be a third scendario in addition to the ones you suggested:
3) An offer on the company web site saying that "you get N bonus points for making X stays between Nov 15 and Jan 15 where N = 1000 if you have not made any stays in 1999, 750 if you made 1-5 stays, ... and 0 points if you have made more than 25 stays".

In your opinion, would this be fair since it is not public and thus not by invitation only?

Finally, your second scenario is, at this point in time, target marketing as well since only those with internet access can see it!

Therefore, the only "fair" way seems to be mailing everyone in the database for every promotion.

Doc, if it were that simple, we wouldn't have needed to worry about what fares qualified in (former) BA US program or ask Rudi LH/UA question or the differences between shuttle and express and normal flights.

Sorry, but I'm not sure I can agree, Ken. Granted it's complex and not simple. I'm not cruncing the numbers or saying the marketing does not work. Yet we're talking here, as I understand it of awareness vs accessibility.

If you are interested and/or know the rule on BA fares (eg also SQ), you buy the right one or do not. You are NOT prohibited from obtaining it. That is the key, as I see it!

kyklin - you've completely lost me over. So tell me how can I receive the 40K point offer from Marriott?

I gave the web site just as an example, I meant that the offer be openly available to all.

Your scenario 3) is somewhat in between. It clearly spells out who is eligible and who is not, which is good. But then it treats worse the best customers, which I had earlier stated that I found objectionable.

One example I find ok is the Marriott offer of double points for the first few months, as long as it is freely available to all. I.e. it was also available to the current members when they first joined the Marriott program.

[This message has been edited by PG (edited 12-08-1999).]

Wow, here's an issue none of us care about! http://www.flyertalk.com/forum/wink.gif

We've had this debate a few times before (Hilton Conquest and Amex come to mind). Ken's point about results is really the bottom line - the only way companies will stop doing this is if it stops working per their model. The issues for the future (as I see them) are honesty and backlash.

Matt already shows the results of the lack of honesty in his post, describing the offers that are not clear cut as coming from "cocaroaches". If company X mails an offer that states:

10,000 bonus miles for customers who fly NY-LA 3 times in the next 60 days (offer available only to customers that have not flown NY-LA on company X in the last 12 months)

anyone who sees it understands the "target". They can complain about the strategy but not about the elegibility. I believe this creates much less resentment than finding out about a bonus offered by seemingly random mail that may be based on individual patterns, gender, or any other criterion that the :


sophisticated software that allows them to segment their members by travel preferences, number of flights flown, destinations, partner purchases, just about anything


Pam describes. The more individualized, and thus biased the offers, the greater the resentment as the information is posted, e-mailed and otherwise desiminated in our "new internet world"

This will create a growing backlash. Elite's may not react immediately, but react we will. I know that targeted offers at others that I did not receive have already lowered my opinion of certian companies. Consciously and subconsciously I (and I'm sure others) are already "looking" for ways to "get even" for being overlooked. (For example, I already regret not taking advantage of two offers from airlines that would have given me elite status after a small number of flights - because a particular practice of my preferred carrier has me questioning the value of my loyalty to them.) The "backlash" will grow to a point where it will become a factor in the marketing models. That, IMHO, will be the result of the popularity of the internet and places like FT - targeted marketing will reduce brand loyalty, and will do so more rapidly if the targeting is too individualized and not clearly defined.

I agree that its all been said. http://www.flyertalk.com/forum/smile.gif

My point has consistently been that there is a reason why the best customers are not targeted - which is exactly what you find objectionable, correct?

That reason is, based on previous studies, the best customers do not bring in the additional MONEY that the companies expect. Therefore, you are not promoted.

The best way to change that is through behavior. Lke NJDavid touched on, reduce your brand loyalty, make yourself heard, spend even more money, etc.

Complaining and dissemnating about a marketing strategy that has been tried and true (so far0 on this board won't change that practice.

kokonutz, I was with you until you brought my friends from US Airways into the equation. http://www.flyertalk.com/forum/wink.gif

Geo: LOL http://www.flyertalk.com/forum/smile.gif

ROFL!!

But I agree... they are right there is no increase in revenue..but does it cause a decrease???

Will someone on the brink of choosing to stay at Airline X or go to Airline Y, go to Airline Y if ignored by X with promotions??

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Here's a couple of real world examples of targeted marketing and their effects, at least on me.

USAirways offered a 4,000 mile first time online booking bonus. Problem was it excluded those of us first on the online bandwagon. I was somewhat upset, but the flip side was that I received a special 5,000 mile first time bonus for being Preferred and I knew the whole first time online bonus thing was an industry wide practice.

I also had another opportunity to get upset with USAirways where the terms and conditions of a bonus were not clear and it could be interpreted to either give or not give me the bonus. I had my line of succession if USAirways pissed me off ready: Continental, American, Delta, TWA, Amtrak, Greyhound, Car, United (<g> to kokonutz and geo1004).

USAirways never answered my question, but instead just gave me the bonus http://www.flyertalk.com/forum/smile.gif That keeps me loyal...

Another bonus is the whole Marriott debacle. Anyone monitoring the whole thing could see I was upset that I wasn't receiving the 'mega' megabonus of 40k. I seriously considered moving my bonus to Hilton and even comped myself to Gold there. I finally got offered that bonus so I'm still faithful for now..

The moral of the story? I find myself more tied to USAirways because on a day to day basis I get more benefits; I always travel in first and they always answer the phone in less than 30 seconds. I also find myself the target of small benefits such as a christmas card with a little memento.

With Marriott, other than the points and bonuses, I get very little since currently I normally stay at Courtyard's during the week and Marriott's during the weekend, so my Platinum membership means little. Maybe that'll change when they revamp their program.

So overall I think targeted promotions are a double edged sword and companies should try to show a rhyme and reason behind it; the Marriott bonus seems to be based on prior activity. Fair. The bonuses that at least seem random are the ones to encourage the most fury.

I have to agree.. some promotions makes sense.. liek promotions targeting HHonors members by United to give them promotional miles... it expands the airlines customer base with a related customer base. I understand and accept it.

I just wish I had learned of more ways to get points on Starwood... but so far I am not complaining http://www.flyertalk.com/forum/smile.gif