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-   Delta Air Lines | SkyMiles (https://www.flyertalk.com/forum/delta-air-lines-skymiles-665/)
-   -   First Class Monetization, or FCM: The Definitive Thread (https://www.flyertalk.com/forum/delta-air-lines-skymiles/1230437-first-class-monetization-fcm-definitive-thread.html)

landeej Mar 14, 2012 10:10 pm


Originally Posted by pbarnette (Post 18201832)
And keep the whining to yourself.

The Maserati dealership doesn't care that I can't actually pay for their product, but DL is different? Why? What benefit does DL get from you jumping through hoops to buy a ticket that they would have sold to someone else? It makes no sense.

Your complaint is that DL is selling F at a market clearing price and that this is preventing you from getting an upgrade on a coach ticket. Am I the only one that sees how absurd that is? Seriously?

While I cannot speak for Maserati, there are other interesting "loyalty" programs which are similar enough to an airline's FF program to bring into the discussion.

BMW offers an exceptional discount on a new car purchase/lease if you go on the European Delivery program. This is a program straight from BMW Corporate, and I saved 7% by doing this after negotiating my packages with the local dealer (already happily incentivizing me as I'm a repeat customer), got a companion ticket gratis on LH, 2 weeks' vehicle insurance in the EU, and a nifty little welcome reception after my tour of the 3-series factory and museum in München.

This builds brand equity. The cost reduction and low-cost "extra" benefits provided incentivize the customer to buy into the brand experience, drink the Kool-Aid, and then turn around and happily relate to everyone why they're driving in the US with a München license plate on one side of their car. You now have an advocate for your brand, quite literally flying the flag (clinking DM tags anyone?), and you know that unless a massive TARFU experience happens, you will have a repeat high-value customer continuing to advertise for you among his/her associates, likely also individuals with the purchasing power to buy into your brand.

Brand equity and public perception matter more than ever today with the outlets individual consumers have to wide audiences (FT, Twitter, G+, etc), both to nurture positive outcomes as well as defuse negatives (note the response time of @deltaassist). Delta, to survive, must position itself as a premium brand, and the loyalty program must continue to appreciate and reward the elite flyers that bring the revenue.

tl;dr? Loyalty matters to any brand that isn't a pure commodity, whether luxury cars or air travel, and smart corporate incentives are provided by forward-thinking companies to their best customers, because even in a down economy you keep yourself the default purchasing decision because of those added gestures.

NotHamSarnie Mar 14, 2012 10:31 pm

It just doesn't make sense for DL to sell out their FFs for $50 FCM. If they were getting full F for the FC then of course it would make sense.

People like to quote the "limited availability" clause in complimentary UGs, but when one has flown Y domestically exactly once over the last 3 years (except when on CRJs or AMEX companion fares) despite never having bought a domestic F ticket, then this "limited availability" sounds like legalese just in case something goes wrong.

I fly *only* DL domestically, and the main reason is the unlimited UGs. I don't fly enough to be DM on DL and have status elsewhere, and DM is definitely better for UGs, so DL owns my soul. But I do fly enough to have status on all airlines. If FCM causes me to lose UG chances, then I won't fly DL so much. I'll spread the love, start flying UA internationally, build up mid-level status on UA, DL, and perhaps even AA (which has much more convenient West Coast routes for me). Then I'll have all the advantages of being a FF on all the airlines, choose my routes and times according to convenience and price, and DL will compete with the other airlines for my business, if they care to. And that is their choice. I will have exercised mine as a consumer.

So, not really whining, just not understanding DL's business case here.
$50 just isn't that much for DL to gain. But to those of use who don't get reimbursed for F, it's a mountain that can't be climbed.

dcline414 Mar 14, 2012 10:50 pm


Originally Posted by N808DE (Post 18202987)
If the entire upgrade window bs was ended and everything went to gate lotto, that would be ideal IMHO.

Sure.

A lot of people won't be happy about it, but it would be a heck of a lot better to put these lousy new (worst-in-class) upgrade terms in writing and communicate them to medallions rather than spelling out the current well-defined windows and then hiding behind some escape clause that allows for no upgrades to be given until the gate.

Delta, please just rewrite the policy how you want it and then honor the policy to the best of your ability.

Is that really so much to ask for?

glbetrotter Mar 14, 2012 11:41 pm


Originally Posted by pbarnette (Post 18201799)
I don't understand why it is so hard to understand. Chasing "loyalty" in a commodity business has led to 20+ years of losses. Sounds like a losing strategy.

I don't understand why it is so hard to understand the logic in selling products to those that, you know, pay more for that product. Does the gas station give discounts to the Hummer owner? By the "logic" of many on this board, they should.

Seriously, if DL needs validation for the strategy to ignore "loyalty", this board provides it. An endless parade of folks looking for something for nothing and objecting to any attempt to leverage any sort of premium pricing from elites. The lack of self-awareness provides entertainment value to those that understand economics, too...

We've heard this so many times from you that it ... oh, well, you know. It is not about seeling a product, it is giving something in return for the loyalty. DL gives absolutely NOTHING. I flew DL only once since Decemebr, and I couldn't be happier!

glbetrotter Mar 14, 2012 11:48 pm


Originally Posted by pbarnette (Post 18201832)
And keep the whining to yourself.

The Maserati dealership doesn't care that I can't actually pay for their product, but DL is different? Why? What benefit does DL get from you jumping through hoops to buy a ticket that they would have sold to someone else? It makes no sense.

Your complaint is that DL is selling F at a market clearing price and that this is preventing you from getting an upgrade on a coach ticket. Am I the only one that sees how absurd that is? Seriously?

Had the price differential between F and Y were significant, then yes, by all means. But milking a loyal frequent customer out of $50 ain't good business. DL advertises UDU as a big deal that sets their program apart from the competition, yet that benefit is not there in reality. Just say so on the web site -- "once in a blue moon, you may have a chance of getting an upgrade at the window, and twice in a blue moon at the gate. In reality, don't you even think about it." On a 16F cabin with 16F seat not clearing a DM at the window is absurd. Seriously!

glbetrotter Mar 14, 2012 11:49 pm


Originally Posted by dcline414 (Post 18203425)

Delta, please just rewrite the policy how you want it and then honor the policy to the best of your ability.

Is that really so much to ask for?

Precisely!

nfg05 Mar 14, 2012 11:49 pm

If it's so cheap, why not buy up and expense the amount of the coach fare?

glbetrotter Mar 15, 2012 12:01 am


Originally Posted by Thomas Hudson (Post 18202364)
This affects me less than most on here. I go with high fares and have stumbled into P or A fares on 4 trips so far this year. The point is not whether Delta can or can't do it... I think it is more about what it says about its understanding of its core customers in what they are doing. Delta certainly has not come out and sent an email stating that V inventory will now be drastically reduced on many flights and it may affect you... even though you have been loyal in the past and your loyalty was rewarded with FC seats....they have used the "just put the tip in technique" as if their core flyers would not figure out the deal.... and even with that said, I am not so sure how it is making them more money. I used to end up buying F or A seats on last minute flights on plenty of occasions. Now, the P fares are a lot less than those seats. They need to fill 6 P seats to make up for an F ticket. (I'd be glad to show my math) In the mean time, pissing off core customers...

But that's how DL has always been! They never communicated about anything honestly. It is either "a good change" or just being silent. When they cannot come up with a "good change" spin, it is the latter. Honesty has not been DL's forte, and then they wonder why DL's employee morale is so low ... It's pretty simple: the same corporate culture applies to employees and customers alike.

DavidDTW Mar 15, 2012 12:42 am


Originally Posted by FWAAA (Post 18202089)
Are there any businesses in this country whose travel policies permit paid F on domestic flights? I doubt it, unless Y is completely sold out. The only business travelers who could buy this ticket would be self-employed business travelers. Non-transcon Domestic F exists for two primary reasons: 1. Connecting flights where an international business class ticket has been purchased (permitted by some corporate travel policies; and 2. Frequent flyer upgrades.

Some companies do allow domestic F, usually for top tier management. A number more permit their employees to buy UP fares. To me, the time to complain is after boarding in Y and not getting the upgrade, not at the 5 day window when the possibility still exists.

dEagleS Mar 15, 2012 1:45 am

How about this for FCM? http://img696.imageshack.us/img696/4838/deltauv.jpg

pbarnette Mar 15, 2012 4:55 am


Originally Posted by azeckel (Post 18203130)
Any MBA can tell you that the cost of obtaining a new customer is drastically higher than the cost to retain an existing customer. F fares for $50 more than coach may yield short term results, but loyalty is really hard for any company to buy.

Any MBA (well, maybe not the MBAs that stink at math) will tell you that, in a commodity market with well-developed systems to allow for comparison shopping, customer retention is vastly overrated and customer acquisition costs approach zero.


Originally Posted by landeej (Post 18203303)
BMW offers an exceptional discount on a new car purchase/lease if you go on the European Delivery program. This is a program straight from BMW Corporate, and I saved 7% by doing this after negotiating my packages with the local dealer (already happily incentivizing me as I'm a repeat customer), got a companion ticket gratis on LH, 2 weeks' vehicle insurance in the EU, and a nifty little welcome reception after my tour of the 3-series factory and museum in München.

What does a program that leverages differential rates of duty for 'used' vehicles to offer a discount have to do with loyalty? BMW offers the same deal to anyone that wants it. It has nothing to do with rewarding loyalty.


Originally Posted by Thomas Hudson (Post 18202276)
I'd like to hear his theories as to why FFers have caused airlines all these business problems the last 20 years...

It is less the FFer, and more the absurd pricing on F that previously existed. The mistake was dedicating space and cost to a product that you then gave away.

There is simply no way to leverage any sort of brand loyalty to drive yields. Given the volumes of travelers that DL serves, it is simply impossible to effectively discriminate on price based upon loyalty. This whole notion that people "pay more" to be loyal is simply impossible over the long term. It is absolutely silly to forgo current revenue for "future revenue" without the ability to price discriminate.

ND76 Mar 15, 2012 5:00 am


Originally Posted by batdude (Post 18201757)
this is one of the things about FT that really upsets me.


Not everyone here is a millionaire/lawyer/doctor.

most of us are just middle-class white/blue collar worker bees who happen to travel extensively for work.

We don't have the means/ability to "buy" first class tix for our biz travel. As a contractor to the gov, if i bought a first class ticket to support the customer, there would be HELL TO PAY. Most likely, I would be paying that difference out of pocket once the gov auditors saw the ticket.


So please, keep the "just buy a first class ticket" crap to yourself. If I had my druthers, I'd be on a chartered G5, not a busted old 757.


Now that you have kicked the hornets nest, I'll go even further.

I jump through hoops to fly delta.

Why?

Because for the most part, they have treated me right over the years.

What I'm pointing out with this post is that FCM is starting to affect high mile flyers, like myself (sorry, only on a sLUT fare..) and will make us start questioning our continued loyalty to the airline.


that's all.


doug

+1^

pbarnette Mar 15, 2012 5:04 am


Originally Posted by StayingHomeIsBetter (Post 18202164)
PB... they can change the rules any way they damn well please. But it would be nice if they stopped relieving themselves on the FF community and telling us that it is raining.

Or one could wise up and not take marketing personally.

Applebee's tells me that they serve delicious steaks. I don't get personally offended that this is not the case. Similarly, I don't get personally offended when DL tells me that upgrades are on a space available basis and that space doesn't become available


Originally Posted by javabytes (Post 18202185)
How many Maseratis do you buy a year?

None. I wanted to buy one. I went to the dealership and told them that I wanted to pay for a Ford Fiesta but get a Maserati. For some strange reason, they passed on my idea.

So, I promised them that, the next year, I would come back and buy another Maserati, provided that they sold that one for the price of a Ford Fiesta, too. Again, they said no.

I then promised to come back in year 3, and again buy a Maserati, provided they sold that one for the price of a Ford Fiesta, too. Once again, they said no.

We went on like this for a while. Eventually, I realized that Maserati doesn't value loyal customers.

gsupstate Mar 15, 2012 5:22 am

Perhaps the growth of Economy Comfort within the fleet might help alleviate some of this conflict(?) Maybe DL can offer this on more domestic routings as time goes on. Certainly a good number of people now opting to pay up to FC would consider EC as a nice enough perk if it became more widely available.

DaChief Mar 15, 2012 5:36 am

Monday morning, first flight, coach close to being full. Why would you be surprised DL was holding on to FC.


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