Originally Posted by
safigan
If I were running it as a for-profit entity, then I'd base it on the number of dollars spent with the airline, period. This is for both award points and status points.
Typical reaction of someone who spends a lot of money (usually someone else's) with an airline, and doesn't get the recognition s/he thinks that s/he deserves, but has never been involved in a loyalty program from the inside.
The fact is that loyalty (FF, etc.) programs do
not exist to reward past behavior. They exist to influence future behavior. People who spend large amounts of money are less subject to influence by these programs than people who pinch pennies. (Do not use yourself, any other FTer(s), or even all FTers, as a counter-example. FTers are
not typical.) For one thing, they already get many of the benefits of FF programs. In addition, they tend to have (or have access to) financial resources that make FF awards less relevant to them.
A loyalty program has to balance the greater value of "big spenders" with the greater effort needed to influence their behavior. A given reward structure can create a great deal of loyalty among lower-spending people for the same as it would cost to create a much smaller amount among those who spend more. Lower-spending passengers are less profitable than those who spend more, but they're more profitable than empty seats. Without them, no airline can survive. This balancing act usually calls for some sort of progressive benefit scale as spending goes up, but not proportional to the spend rate.
So, big spenders: sorry, but it simply does not make business sense to base rewards solely on what you (or someone else) spends on your tickets. You deserve more than the "little guy," but not as much more as your higher spending might lead you to think. Keep your expectations under control.
(The above applies primarily to North American FF programs. The concept of balance applies everywhere, but airline route structures in Europe and most of Asia are different, which leads to different program motivations. This can lead to a different spending/reward relationship.)