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Old Mar 26, 2012, 7:09 am
  #1186  
 
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Originally Posted by sbjnyc
Maybe I didn't make myself clear or maybe you didn't get what I said.
I'm not sure the three of us are disagreeing at this point.

Except you're still missing that price is irrevocably tied to demand.
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Old Mar 26, 2012, 7:12 am
  #1187  
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Originally Posted by sbjnyc
Maybe I didn't make myself clear or maybe you didn't get what I said. Delta runs an operating deficit (passenger revenue less cost) becuase almost 1 seat in 5 flies empty (passenger load is 82%). They actually net about 1.6 cents per passenger mile for filled seats, so if they sold every empty seat even as an E fare, they'd make money. But if they did that there'd be no reason to have a skymiles program. So the bottom line is that Delta wants to sell more cash tickets, regardless of the fare bucket. But they can't afford to fill a plane with low fares since their operating cost is about 15cpm per seat, no matter what's in it. I don't know if you can extrapolate this cost to specific routes, though this is to address both your points regarding marginal revenues. They can't fill a plane with award/low cost fares and be profitable, but they can if they fill empty seats with LUT/E fares. They can only do this if they have a reliable source of fliers to fill those seats (ie the weekly road warrior). Delta can't afford to chase them away but that thinking might be route specific (ie someone buying a cheap fare on a popular route isn't as valuable as someone buying a cheap fare on a route that often flies 70% full).

On the other hand, the skymiles program and their partnership with AMEX makes them a ton of cash. A ballpark estimate from the numbers I posted is a skymiles redemption value of 0.9 cpm. If they sell in bulk to AMEX at 2cpm (just guessing), then thats a huge lift to their bottom line.
I agree with you. I was just trying to expand on the subject, which constantly gets "dumbed down" to "The airlines cannot afford to sell a seat at a loss". They can and do. I think we are in full agreement.
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Old Mar 26, 2012, 8:16 am
  #1188  
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Originally Posted by LedgeT
The Loyalty Program is comprised of two projects that seek to increase revenue and customer loyalty along with
decreasing liability related to unused award miles. Coordinated communication to the general public regarding the
intentions of these changes is paramount to acceptance.

Revenue Based Mileage Accrual (RBMA) project shifts the basis for awarding miles to a revenue based accrual approach
Release 0: Support the communication/announcement of upcoming SkyMiles program changes (targeted 1Q12).
Will no longer display distance flown miles for departures after new miles accrual effective date (targeted for 3Q12)
Release 0.5: Provide Mileage Calculator to calculate approximate revenue based mileage accrual based on travel
after launch ((targeted 2Q12)
Release 1: Convert SkyMiles System from flown miles to revenue based mileage accrual (3Q12)
Release 2: Reward SkyMiles members with miles for all non-air purchases (i.e. SkyClub, Seats) (currently On Hold)

Fare Based Award Ticket Redemption (FBATR) project
Fast Track Release – Provides limited base functionality to align with the Polaris Chicago release timing

Phase I at Launch introduces Fare Based Award Redemption Model, Single Shopping Experience for Customer, New Award Inventory Controls, Cash + Miles Award Redemption Product, Award Redemption for OA, Modifications to the automated Award Refund, Redeposit, and Reissue and Exchange Process

Phase II – After Launch includes Bid for Price Award Redemption Product, Buy It Now Award Redemption Product, Volume Discount Award Redemption Product, Modifications to SkyMiles Branded Mileage Upgrade Products, and Modifications to SkyMiles System-Wide Upgrade Certificates

113 hours and 45 minutes left in Delta's scheduled announcement period per LedgeT's Delta's insider. Keep in mind we've gone 80+ pages based on this post, and some cry for attention on airliners.net.


Maybe when this time passes and nothing happens this thread will be locked.
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Old Mar 26, 2012, 8:22 am
  #1189  
 
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It will

This project has been running for a while, you can find some interesting details here

(no, the link above does NOT lead to a blog or commercial...)

You need to read the lines inside carefully. It tells a bigger story-

first, the magnitude of the project(s) related, even in DL's size and standards. There is a non-ignorable number of contractors and employees associated with this project.

Second, the software- both number of applications, type of applications and names. The names mean something for people who have experience with Customer Analytics.

Third, the CSV (Customer Score Value) is a component that was already disclosed by Jeff last year in his public speech at Emory (march 2011), and he also told all the participants in the 2010 mega-DO that it may be developed (so working backwards, one can evaluate how long it has been standing). But, the CSV is linked to other products. It requires a certain infrastructure, which may explain why we are experiencing such a sub-standard award calendar. The resources go elsewhere, now it is clear where 'elsewhere' is.

Also, one may add the 'pre and post' details. It's not a generic description that one looks for, it's the direction and tentative timeline. If one worked on Parts A,B and C, one can figure out what and when would part D,E and F be relevant (and what can they build on from the previous parts).

Besides, I would use key words from prevoius postings and links posted in this thread. I think you will find some surprising findings, it is just too bad that we are late to this quest for data. There is a lot of interesting software, vendor and people movement

Last edited by DLroads; Mar 26, 2012 at 8:52 am
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Old Mar 26, 2012, 8:26 am
  #1190  
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Originally Posted by DLroads
This project has been running for a while, you can find some interesting details here

(no, the link above does NOT lead to a blog or commercial...)
An employee resume? I'm sure Delta, has had dozens of people with this exact job description for decades. 80 pages because Delta has people that analyze customer loyalty programs?
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Old Mar 26, 2012, 8:30 am
  #1191  
 
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Originally Posted by itsaboutthejourney
Your otherwise impeccable credibility here just went down a notch. Usual DL sources haven't been this dead silent in ages; I think we're within days/weeks of this announcement vs months.
Sorry guys - I HONESTLY haven't heard a thing, other than the frustration that we've had *cough* issues with the KLM/AF availability.

Mind you, there is a shift bid coming up, and the last of the old NWA 'way of life' is being swept away - we used to do it in person, and now it's all via computer proxy and system wide, and while it has no effect on you folks (unless I find myself starting at half past dark, and before I get my hands on my third cup of tea, I disavow any responsibility for the first few call to know the difference between Helena and Hong Kong) but you would think they would give front line at least some kind of 'heads up' that change is coming? Especially something this big?

Ah well, I've said in the past that I read FT to keep my ear on the ground, and you guys have taught me a LOT (I still keep the up to date Black out list for KE flights at my fingertips) so if you folks are an invaluable resource for those who wish to be 'in the know'.
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Old Mar 26, 2012, 8:31 am
  #1192  
 
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Originally Posted by mother-
Except you're still missing that price is irrevocably tied to demand.
Where did I say it wasn't? AFAIK I wasn't talking about price at all. I can't take the 15.7 cent per mile yield and apply it to a JFK-LAX RT that DL routinely sells for $300.
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Old Mar 26, 2012, 8:46 am
  #1193  
 
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AMEX Uncertainty from these changes

One of my biggest frustrations with these reported changes is that I don't know how it will affect my Skymiles AMEX. Right now it is quite clear. I get miles that have a value I can roughly guess, and if I spend enough in a year, I get some MQMs that might help me hit another elite level. But without knowing what miles will be worth, and not knowing how elite status will be determined, etc. I don't have any idea if I should be charging stuff to my AMEX (and building towards the spend threshold) or to my Flexperks card, where I at least know exactly the value of what I'm getting.
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Old Mar 26, 2012, 8:46 am
  #1194  
 
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Also, one may evaluate where DL is putting their resources and partners' currently as it is associated with skymiles.

i.e. on Friday (3/23) DL announced the expansation of the shopping portal to all of the americas (in Spanish, Portuguese, French and English) which has been running since 3/5/2012, and offering new 'options' for SM unique to non-US customers... see below. It does not take a very long thought process to understand that the resources are assigned to the 'incremental' revenue projects in lieu of fixing core problems. It means that Jeff wants to change the rules of the game instead of solving the main core problems : availablity of awards, calendar, redeem options, address tier problems, etc.

One does not need a written statement from DL to see where it's heading.

Also, search the services of Loylogic and you will understand the reason(s) DL skymiles works with them. It will help understand the 'revenue driven direction'


------------------------------------
Loylogic and Delta Air Lines announce that a new multi-country, multi-language online shopping portal was launched on March 5, 2012, giving SkyMiles® members across Canada, Latin America, Mexico and the Caribbean the opportunity to earn additional SkyMiles® for their online purchases.

Now in its 30th year, SkyMiles® is one of the longest-running and most successful loyalty programs in the travel industry. With the launch of SkyMiles® Shopping in these new markets, Delta will offer more innovative channels for its members to earn SkyMiles® and further distinguish the airline and its loyalty program in key markets within Canada and Latin America.

‘Our priority is to connect with our SkyMiles members across the globe by providing a broad selection of brands that appeal to customers in different regions and markets and we’re able to accomplish that by partnering with Loylogic,” said Jeff Robertson, Vice President of Delta SkyMiles.

Delta recognized multi-market shopping presents a number of complexities surrounding product fulfillment, languages, and the need for local currency checkout, all of which are paramount in achieving local appeal and a seamless customer experience. Delta selected Loylogic because its solution is centered on solving each of these challenges and has recently been recognized for the second consecutive year for providing the ‘Most Innovative Loyalty Technology’ in the industry.

For the launch of SkyMiles® Shopping across the Americas region, Delta and Loylogic will provide complete language content in Spanish, Portuguese, French and English to ensure comprehensive appeal to members across the region. Overall, the program will present hundreds of merchants and exciting brands which in turn offer millions of products, offering Delta’s valued customers throughout the region the ability to earn SkyMiles on every purchase.

Dominic Hofer, Chief Executive Officer of Loylogic said: ‘We are thrilled to partner with Delta Air Lines and the SkyMiles® team to enhance their loyalty currency in the Canadian as well as the fast-growing Latin American e-commerce markets and to deliver new and exciting benefits to non-U.S. SkyMiles® members.’

Last edited by DLroads; Mar 26, 2012 at 9:08 am
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Old Mar 26, 2012, 8:47 am
  #1195  
 
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This is the interesting part. First this all started in 2010. However, it does confirm new level

* Leadership and management of 3 areas including Market Research, Customer analytics and Web Analytics (16 people; 23 contractors)
* Focus groups and quantitative research led to selection of flat bed seats and launch of the Sky Priority program for HVC’s (high value customers)
* Application of a testing strategy and campaign optimization process resulted in over $90M in incremental revenue
* Conceived, designed and published the monthly ‘Customer Report Card’ for the CEO to keep a pulse on customer & operational metrics
* Developed Delta’s offline customer segmentation (21M active) and Customer Value Score to provide a deeper understanding of the customer & enable differential marketing investment
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Old Mar 26, 2012, 9:53 am
  #1196  
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Originally Posted by ATLCDG
The last time I checked, profits generally-and I mean generally these days--provide upward presure on stockprices. Who wants dividends? Give me a LT capital gain any day.

Just my opionion...Uhmmm....however.
I'm not an active trader. I love value stocks. I take dividends in more stock. Portfolio grows faster. ^^^

http://www.youtube.com/watch?v=XVCtkzIXYzQ
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Old Mar 26, 2012, 9:53 am
  #1197  
 
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Originally Posted by MR_MAMA
This is the interesting part. First this all started in 2010. However, it does confirm new level

* Leadership and management of 3 areas including Market Research, Customer analytics and Web Analytics (16 people; 23 contractors)
* Focus groups and quantitative research led to selection of flat bed seats and launch of the Sky Priority program for HVC’s (high value customers)
* Application of a testing strategy and campaign optimization process resulted in over $90M in incremental revenue
* Conceived, designed and published the monthly ‘Customer Report Card’ for the CEO to keep a pulse on customer & operational metrics
* Developed Delta’s offline customer segmentation (21M active) and Customer Value Score to provide a deeper understanding of the customer & enable differential marketing investment
It doesn't confirm any such thing. ALL FF members at DL have a customer value score. Many of us have been talking about this for MONTHS on FT. That is why I say if you are going to leave, email DL with your ff# - they know what you are worth to them. You might make a point, or you might not.

Last edited by bubbashow; Mar 26, 2012 at 9:59 am
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Old Mar 26, 2012, 9:55 am
  #1198  
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Originally Posted by bubbashow
It doesn't confirm any such thing. ALL FF members at DL ahve a customer value score. Many of us have been talking about this for MONTHS on FT. That is why I say if you are going to leave, email DL with your ff# - they know what you are worth to them. You might make a point, or you might not.
Which explains why I got the following e-mail from Delta:

Dear Dovster,

We understand that you had some serious problems on your last Delta flight.

While you have not contacted us about them, may we suggest that you boycott us in the future?
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Old Mar 26, 2012, 10:04 am
  #1199  
 
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Originally Posted by Dovster
Which explains why I got the following e-mail from Delta:
LOL. I hope it never gets that bad, but they are putting great efforts into tracking customer interaction (esp HVC) and customer worth. I imagine it does have an impact on the outcome of a situation.
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Old Mar 26, 2012, 10:30 am
  #1200  
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Originally Posted by bubbashow
LOL. I hope it never gets that bad, but they are putting great efforts into tracking customer interaction (esp HVC) and customer worth. I imagine it does have an impact on the outcome of a situation.
The HVC are the ones that probably don't talk to the airline much.
I know my Eagle rating (on AA) but it's not really the best (lots of activity from BA, and some complaints)
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