MQM Valuation Based on Fare Paid Now Showing on Delta.com
Sep 8, 2012, 5:05 pm
#571
FlyerTalk Evangelist
Join Date: May 2008
Location: CHA, MAN;
Programs: Delta DM 1 MM; Hz PC
Posts: 11,169
Sep 8, 2012, 7:59 pm
#572
FlyerTalk Evangelist
Join Date: Oct 2011
Location: ATL
Programs: DL Scattered Smothered Covered Medallion, Some hotel & car stuff, Kroger Plus Card
Posts: 10,745
Originally Posted by yohanson:19278851
Do a MR/VR. Watch this forum: http://www.flyertalk.com/forum/mileage-run-deals-372/ Go somewhere you've never been before and take lots of pictures!
Of course I can do MRs to reach a higher status. The point is that I MUST do them to get that status, while the PM who has spent the same amount does not.
Sep 8, 2012, 8:06 pm
#573
Join Date: Jan 2010
Location: Twin Cities
Programs: Delta DM MM, IHG Plat, Hilton DM, Marriott SE, Emerald EE, Oakdale Gun Club, NRA & GOA Life Member
Posts: 3,870
You're missing the point. I've spent the same amount of $ to reach FO as others have spent to reach PM. Others can spend a quarter of my spend to achieve the same status, arguably with a better long term outcome due to rollover.
Of course I can do MRs to reach a higher status. The point is that I MUST do them to get that status, while the PM who has spent the same amount does not.
Of course I can do MRs to reach a higher status. The point is that I MUST do them to get that status, while the PM who has spent the same amount does not.
Sep 8, 2012, 8:11 pm
#574
Join Date: Feb 2012
Location: Los Angeles, CA
Programs: DL DM, UA 1K, AA EXP, US G, SPG P, HH D, MR G, NEXUS/GE, DL AMEX Reserve
Posts: 2,035
Originally Posted by yohanson:19279782
You're missing the point. I've spent the same amount of $ to reach FO as others have spent to reach PM. Others can spend a quarter of my spend to achieve the same status, arguably with a better long term outcome due to rollover.
Of course I can do MRs to reach a higher status. The point is that I MUST do them to get that status, while the PM who has spent the same amount does not.
Of course I can do MRs to reach a higher status. The point is that I MUST do them to get that status, while the PM who has spent the same amount does not.
Sep 8, 2012, 8:26 pm
#575
FlyerTalk Evangelist
Join Date: Oct 2011
Location: ATL
Programs: DL Scattered Smothered Covered Medallion, Some hotel & car stuff, Kroger Plus Card
Posts: 10,745
Originally Posted by yohanson:19279782
You're missing the point. I've spent the same amount of $ to reach FO as others have spent to reach PM. Others can spend a quarter of my spend to achieve the same status, arguably with a better long term outcome due to rollover.
Of course I can do MRs to reach a higher status. The point is that I MUST do them to get that status, while the PM who has spent the same amount does not.
Of course I can do MRs to reach a higher status. The point is that I MUST do them to get that status, while the PM who has spent the same amount does not.
I disagree with your take on it, but neither of us is going to change the other's mind at this point. I would, however love to hear other opinions on the difference.
Sep 8, 2012, 9:37 pm
#576
Join Date: Feb 2006
Location: Charleston, SC
Programs: DL DM, Hilton Diamond, Hyatt Platinum, SPG Gold
Posts: 49
Interesting article that JetBlue and Virgin America have 'Stage is set' for revenue focused loyalty programs. Its only a matter of time for Delta, as I'm sure corporate is closing watching those programs. If all of the legacy carriers switched within a year time frame, where are we all going to go? Flying Blue doesn't fly US Domestic.
Sep 8, 2012, 10:02 pm
#577
Join Date: Jan 2010
Location: Twin Cities
Programs: Delta DM MM, IHG Plat, Hilton DM, Marriott SE, Emerald EE, Oakdale Gun Club, NRA & GOA Life Member
Posts: 3,870
Interesting article that JetBlue and Virgin America have 'Stage is set' for revenue focused loyalty programs. Its only a matter of time for Delta, as I'm sure corporate is closing watching those programs. If all of the legacy carriers switched within a year time frame, where are we all going to go? Flying Blue doesn't fly US Domestic.
I think when/if Delta rolls in a revenue qualifier, it isn't going to have much impact on the way people are already earning status BIS or AMEX spend. They will just reward those spending a fortune on short flights.
Sep 8, 2012, 10:08 pm
#578
FlyerTalk Evangelist
Join Date: Sep 2003
Location: HH Diamond, Marriott Gold, IHG Gold, Hyatt something
Posts: 33,544
A quarter of your spend? It cost me $400 to get silver this year. A bit less for next year.
Sep 9, 2012, 1:01 am
#580
Join Date: Dec 2004
Location: LHR / BHX / MAN / ATL
Programs: DL DM 2MM - IHG Diamond
Posts: 4,053
Amount of spend does NOT always equal amount of profit for DL
There has been a lot of focus in the thread debating the merits of a "spend-based" program. There are valid arguments to be made on both sides of the question...and a handful of poster have made them again...and again...and again. 
However, one of the aspects that hasn't been widely discussed is the PROFIT generated for DL by various flight patterns. For example, take two pax that both earn GM by spending the same amount of $$. With planning and about $6,000, pax A can earn GM by flying ATL-MCO-ATL 50 times on $59ow T fares. With planning and about $6,000, pax B can earn GM by flying ATL-FRA-ATL 6 times on $1,000rt T fares.
Those arguing for a "spend-based" program believe that these two pax should earn the same status since they spent the same amount of $$. However, it isn't always as simple as they would have us believe. The costs associated with pax A (50 tickets & 100 boardings) far exceed those associated with pax B (6 tickets & 12 boardings), meaning that pax B likely generates more PROFIT for DL than pax A, even though they spent the same $$.
Although I used T fares for simplicity, simlar examples could be made at the various fare classes, so this is not limited to T fares. The reality is that the amount of $$ a pax spends is no more a true indication of his/her profit potential to DL than the number of miles he/she flies is. @:-)
However, one of the aspects that hasn't been widely discussed is the PROFIT generated for DL by various flight patterns. For example, take two pax that both earn GM by spending the same amount of $$. With planning and about $6,000, pax A can earn GM by flying ATL-MCO-ATL 50 times on $59ow T fares. With planning and about $6,000, pax B can earn GM by flying ATL-FRA-ATL 6 times on $1,000rt T fares.
Those arguing for a "spend-based" program believe that these two pax should earn the same status since they spent the same amount of $$. However, it isn't always as simple as they would have us believe. The costs associated with pax A (50 tickets & 100 boardings) far exceed those associated with pax B (6 tickets & 12 boardings), meaning that pax B likely generates more PROFIT for DL than pax A, even though they spent the same $$.
Although I used T fares for simplicity, simlar examples could be made at the various fare classes, so this is not limited to T fares. The reality is that the amount of $$ a pax spends is no more a true indication of his/her profit potential to DL than the number of miles he/she flies is. @:-)
Sep 9, 2012, 7:45 am
#581
A FlyerTalk Posting Legend
Join Date: Sep 2009
Location: Minneapolis: DL DM charter 2.3MM
Programs: A3*Gold, SPG Plat, HyattDiamond, MarriottPP, LHW exAccess, ICI, Raffles Amb, NW PE MM, TWA Gold MM
Posts: 100,417
There has been a lot of focus in the thread debating the merits of a "spend-based" program. There are valid arguments to be made on both sides of the question...and a handful of poster have made them again...and again...and again.
However, one of the aspects that hasn't been widely discussed is the PROFIT generated for DL by various flight patterns. For example, take two pax that both earn GM by spending the same amount of $$. With planning and about $6,000, pax A can earn GM by flying ATL-MCO-ATL 50 times on $59ow T fares. With planning and about $6,000, pax B can earn GM by flying ATL-FRA-ATL 6 times on $1,000rt T fares.
Those arguing for a "spend-based" program believe that these two pax should earn the same status since they spent the same amount of $$. However, it isn't always as simple as they would have us believe. The costs associated with pax A (50 tickets & 100 boardings) far exceed those associated with pax B (6 tickets & 12 boardings), meaning that pax B likely generates more PROFIT for DL than pax A, even though they spent the same $$.
Although I used T fares for simplicity, simlar examples could be made at the various fare classes, so this is not limited to T fares. The reality is that the amount of $$ a pax spends is no more a true indication of his/her profit potential to DL than the number of miles he/she flies is. @:-)
However, one of the aspects that hasn't been widely discussed is the PROFIT generated for DL by various flight patterns. For example, take two pax that both earn GM by spending the same amount of $$. With planning and about $6,000, pax A can earn GM by flying ATL-MCO-ATL 50 times on $59ow T fares. With planning and about $6,000, pax B can earn GM by flying ATL-FRA-ATL 6 times on $1,000rt T fares.
Those arguing for a "spend-based" program believe that these two pax should earn the same status since they spent the same amount of $$. However, it isn't always as simple as they would have us believe. The costs associated with pax A (50 tickets & 100 boardings) far exceed those associated with pax B (6 tickets & 12 boardings), meaning that pax B likely generates more PROFIT for DL than pax A, even though they spent the same $$.
Although I used T fares for simplicity, simlar examples could be made at the various fare classes, so this is not limited to T fares. The reality is that the amount of $$ a pax spends is no more a true indication of his/her profit potential to DL than the number of miles he/she flies is. @:-)
Sep 9, 2012, 9:20 am
#582
Join Date: May 2009
Location: South Park, CO
Programs: Tegridy Elite
Posts: 5,678
There has been a lot of focus in the thread debating the merits of a "spend-based" program. There are valid arguments to be made on both sides of the question...and a handful of poster have made them again...and again...and again.
However, one of the aspects that hasn't been widely discussed is the PROFIT generated for DL by various flight patterns. For example, take two pax that both earn GM by spending the same amount of $$. With planning and about $6,000, pax A can earn GM by flying ATL-MCO-ATL 50 times on $59ow T fares. With planning and about $6,000, pax B can earn GM by flying ATL-FRA-ATL 6 times on $1,000rt T fares.
Those arguing for a "spend-based" program believe that these two pax should earn the same status since they spent the same amount of $$. However, it isn't always as simple as they would have us believe. The costs associated with pax A (50 tickets & 100 boardings) far exceed those associated with pax B (6 tickets & 12 boardings), meaning that pax B likely generates more PROFIT for DL than pax A, even though they spent the same $$.
Although I used T fares for simplicity, simlar examples could be made at the various fare classes, so this is not limited to T fares. The reality is that the amount of $$ a pax spends is no more a true indication of his/her profit potential to DL than the number of miles he/she flies is. @:-)
However, one of the aspects that hasn't been widely discussed is the PROFIT generated for DL by various flight patterns. For example, take two pax that both earn GM by spending the same amount of $$. With planning and about $6,000, pax A can earn GM by flying ATL-MCO-ATL 50 times on $59ow T fares. With planning and about $6,000, pax B can earn GM by flying ATL-FRA-ATL 6 times on $1,000rt T fares.
Those arguing for a "spend-based" program believe that these two pax should earn the same status since they spent the same amount of $$. However, it isn't always as simple as they would have us believe. The costs associated with pax A (50 tickets & 100 boardings) far exceed those associated with pax B (6 tickets & 12 boardings), meaning that pax B likely generates more PROFIT for DL than pax A, even though they spent the same $$.
Although I used T fares for simplicity, simlar examples could be made at the various fare classes, so this is not limited to T fares. The reality is that the amount of $$ a pax spends is no more a true indication of his/her profit potential to DL than the number of miles he/she flies is. @:-)
Cargo will impact how valuable any passengers are on a given flight in the first place, too. Some routes may cover, or nearly cover, the cost of the flight and the people are pure profit at any price. Others, can't count on much or any cargo revenue and the people are more of a factor in covering costs and then in profitability.
There are so many variables on each flight. To really make sense, there would have to be a calculation of the profit from each of a passenger's flights and then reward based on your aggregate profitability for the year, rather than straight purchase price paid.
Sep 9, 2012, 9:30 am
#583
Join Date: Jan 2010
Location: Twin Cities
Programs: Delta DM MM, IHG Plat, Hilton DM, Marriott SE, Emerald EE, Oakdale Gun Club, NRA & GOA Life Member
Posts: 3,870
Also the marginal revenue from that cheap seat, that would otherwise go empty, may be more valuable than the above higher fare seat if the second FRA seat would've simply been purchased at the same price by another flyer anyway.
Cargo will impact how valuable any passengers are on a given flight in the first place, too. Some routes may cover, or nearly cover, the cost of the flight and the people are pure profit at any price. Others, can't count on much or any cargo revenue and the people are more of a factor in covering costs and then in profitability.
There are so many variables on each flight. To really make sense, there would have to be a calculation of the profit from each of a passenger's flights and then reward based on your aggregate profitability for the year, rather than straight purchase price paid.
Cargo will impact how valuable any passengers are on a given flight in the first place, too. Some routes may cover, or nearly cover, the cost of the flight and the people are pure profit at any price. Others, can't count on much or any cargo revenue and the people are more of a factor in covering costs and then in profitability.
There are so many variables on each flight. To really make sense, there would have to be a calculation of the profit from each of a passenger's flights and then reward based on your aggregate profitability for the year, rather than straight purchase price paid.
Sep 9, 2012, 10:47 am
#584
FlyerTalk Evangelist
Join Date: Oct 2011
Location: ATL
Programs: DL Scattered Smothered Covered Medallion, Some hotel & car stuff, Kroger Plus Card
Posts: 10,745
There has been a lot of focus in the thread debating the merits of a "spend-based" program. There are valid arguments to be made on both sides of the question...and a handful of poster have made them again...and again...and again.
However, one of the aspects that hasn't been widely discussed is the PROFIT generated for DL by various flight patterns. For example, take two pax that both earn GM by spending the same amount of $$. With planning and about $6,000, pax A can earn GM by flying ATL-MCO-ATL 50 times on $59ow T fares. With planning and about $6,000, pax B can earn GM by flying ATL-FRA-ATL 6 times on $1,000rt T fares.
Those arguing for a "spend-based" program believe that these two pax should earn the same status since they spent the same amount of $$. However, it isn't always as simple as they would have us believe. The costs associated with pax A (50 tickets & 100 boardings) far exceed those associated with pax B (6 tickets & 12 boardings), meaning that pax B likely generates more PROFIT for DL than pax A, even though they spent the same $$.
Although I used T fares for simplicity, simlar examples could be made at the various fare classes, so this is not limited to T fares. The reality is that the amount of $$ a pax spends is no more a true indication of his/her profit potential to DL than the number of miles he/she flies is. @:-)
However, one of the aspects that hasn't been widely discussed is the PROFIT generated for DL by various flight patterns. For example, take two pax that both earn GM by spending the same amount of $$. With planning and about $6,000, pax A can earn GM by flying ATL-MCO-ATL 50 times on $59ow T fares. With planning and about $6,000, pax B can earn GM by flying ATL-FRA-ATL 6 times on $1,000rt T fares.
Those arguing for a "spend-based" program believe that these two pax should earn the same status since they spent the same amount of $$. However, it isn't always as simple as they would have us believe. The costs associated with pax A (50 tickets & 100 boardings) far exceed those associated with pax B (6 tickets & 12 boardings), meaning that pax B likely generates more PROFIT for DL than pax A, even though they spent the same $$.
Although I used T fares for simplicity, simlar examples could be made at the various fare classes, so this is not limited to T fares. The reality is that the amount of $$ a pax spends is no more a true indication of his/her profit potential to DL than the number of miles he/she flies is. @:-)
In that broken record, I've previously pointed to examples where it costs one person ~$6.5k to reach FO on segments, and another person $2k to reach the same status. Yes, it certainly did cost DL more $ to fly the first person on 30 flights vs. the 10 that the $2k spender took. I'll admit that I wouldn't know where to begin with even a ballpark estimate of profit margins for different flights, but is the difference really that big? The profit margin, after taking all the variables into account, on the $2k worth of flights would need to be over 3x (in aggregate) the margins on the $6.5k flights just to make those same people equally profitable for DL.
I think some of the push to a revenue-based program vs. profit-based is because it's already something that's visible to DL's customers. The tiers of a FF program must be visible in order to give customers something to strive for (thus building loyalty, even if just through MRs/SRs). DL is not going to make the profits generated by individual customers visible, but revenues already are.
The way I see it, revenue is likely just as flawed as a measure as mileage or segments. But, since it would be flawed in my favor, I would welcome it. In lieu of that, I would at least welcome rollover segments - that part of it bugs me more than anything else, TBH.
Sep 9, 2012, 11:14 am
#585
Join Date: Jan 2010
Location: Twin Cities
Programs: Delta DM MM, IHG Plat, Hilton DM, Marriott SE, Emerald EE, Oakdale Gun Club, NRA & GOA Life Member
Posts: 3,870
Finally, something we agree on.
I think some of the push to a revenue-based program vs. profit-based is because it's already something that's visible to DL's customers. The tiers of a FF program must be visible in order to give customers something to strive for (thus building loyalty, even if just through MRs/SRs). DL is not going to make the profits generated by individual customers visible, but revenues already are.
The way I see it, revenue is likely just as flawed as a measure as mileage or segments. But, since it would be flawed in my favor, I would welcome it. In lieu of that, I would at least welcome rollover segments - that part of it bugs me more than anything else, TBH.
BTW, NWA first gave me SE status with only about 8000 EQM when I first became "elite". That may have had something to do with my $1000-1240 fares MSP-STL-MSP that I had been paying at the time.