I don't want to get too far into the "you should target your high rollers" argument, but a couple of observations.

80/20 says you make 80 percent of your margin from 20% of your customers. The 20% for BA will not just be the high rollers. It's a thin skim. It will also include tens of thousands of mid rollers. It's quite probable BA has a pareto of these profiling them.

80/20 also says you aim to use 80% of your effort to serve the 20% bringing in the 80%, and you essentially minimise the 80% bringing you 20%.

It's a very easy conceptual rule for people to understand, particularly in the C-Suite.

The problem with 80/20 in reality is that the 80% of customers generated 20% of the margin, and you don't want to drop that. To grow, the first essential is not to contract. If you lose margin attributable to these people, which is easy to do as they will tend to be price and service level sensitive, you have a problem. BA are doing an amazing job alienating the lower end of their food chain by being impossible to deal with, complaints are ignored, refunds aren't made, the service is rubbish, unreliable, all of that stuff. BA do attract a lot of criticism in this segment. The great thing though about farming this segment if you do it right is that it's not granular. Lose one customer, it's no big deal, you get a sort of steady run-rate business. There are certainly things BA can do and appears to be attempting to improve the lot of this group, but sadly the consultants will be telling them to concentrate on the 20% with highest margin generation on the basis you get more bang for investment buck.

However.

The higher up you go in the customer value ranking, the less granular the business becomes, and that makes it fragile. Lose one of the larger customers and you could easily drop a significant bottom line percentage. These customers know they have leverage anyway and are often quite tricky to deal with.

BAEC did two things, I suspect effectively. The first one was to provide a lock into the moderately valuable segment in providing some perks that were valued and which people like having, which reduces churn and tends to direct choices to OW products. And the second was that it could then be left to do its own thing, confident in the knowledge that the push for status would drive enhanced margin business such as CE (there is no way CE has a value proposition in any rational world), it was very low maintenance.

I can fully accept the changes BA made to be revenue based, but the way this has been done is appallingly bad. It has created a large cohort of people in the top 20% (which is likely to encompass a lot of the GCHs etc) who are willing to jump ship at once and have lost trust in BA. Trust is like virginity, once it goes you can never get it back. And also it looks punitive. The thresholds probably look great on the pareto, but to someone who was Group 1 and is now going to be 4 5 or 6, it looks like a slap.

And the other thing is that it provides more ammunition to the bottom 20% who are looking for any bad news story about BA to reinforce their own negative viewpoint, regardless of the effect on them personally. So it destabilizes what was quite a decent self regulating system.

I personally think it's a dangerous lever for BA to pull as they have, but time will tell. There are probably IAG loyalty reasons why this was done relating to internal accounting, I suspect a great many BA managers hate the idea as I've said. If I were a top 5% customer I'd now be looking at getting further concessions. Ultimately it's happened, we can't change it, and as I've been saying, acceptance is the best strategy. No point arguing the whys and wherefores.