Originally Posted by
emma dog
On a marketing side, yeah... this is well known. Affinity programs result in consumers being more willing to pay more money at a higher frequency than not having one. The trick is to provide sufficient rebates to keep people without giving away the farm.
The rebated currency value has been deliberately slashed by airlines, so the airlines are giving away less of the farm that way. Instead the airlines have increasingly shifted to using elite status as the main hook to drive up their returns from encouraging the marketplace’s moral hazard arising from FFPs.
Originally Posted by
BearX220
The FF programs as originally engineered were meant to change buying behavior. For a long time they did that successfully for many customers, me included. It is no big insight to show that FF programs induced people to spend unnecessary client / company funds to stick with a favored airline, or take unnecessary trips in Q4 to requalify for status, or in my case fly in the wrong direction to get home from a business trip in order to compile more PQMs.
Today, with PQD thresholds and miles earnings rates married to dollars spent, not distance traveled, and the value of status much eroded in many cases, the programs are IMO less potent influencers. FF miles are more like green stamps or the Costco rebate check: nice to have a smattering here and there, but I'm not going to run out and buy things I don't need to rack up more.
The marketplace also consists of less rational and/or less ethical players. More so when OPM is involved? Shouldn’t be a surprise. Some would say FFPs encourage embezzlement and other forms of corruption by those with access to OPM for work travel. There is something to that too.