Low Value Customer

Old Jan 15, 19, 10:03 am
  #46  
 
Join Date: Jan 2002
Location: USA
Programs: Delta DM, Marriott TE, Hertz & Avis PC
Posts: 212
Most corporate customers force their spend through corporate cards that preclude their ability to leverage the DL specific Amex products to qualify. Far too much revenue comes in via these non DL branded cards and will continue to do so. So no, requiring spend for status would destroy this channel of revenue as corporate fliers have next to no say in which card they are required to use for their Delta / all travel purchases.
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Old Jan 15, 19, 10:50 am
  #47  
 
Join Date: Dec 2018
Location: The ATL
Programs: Delta DM, Marriott Lifetime Titanium, HHonrs Diamond
Posts: 574
I think DL has made it very clear where it draws the lines on customer value. That is the dividing lines between SM, GM, PM, and DM. If they cared about sub-groups of value, then they would create more categories.

DL has made it clear that a person who flies 75k MQM and spends any amount of MQD with a $25k spend on a DL AMEX compared to a person who flies 75k MQM and meets the MQD without holding a DL AMEX are equal value.

And DL made it clear that DM was worth a $250k card spend at any MQD spending if the MQM's are met. They could have eliminated the credit card spend entirely from DM qualifications. They knew it was way too low at $25k back in 2017 considering the value of DM perks. Nor are they giving top status away solely with a credit card like Hilton does with its Aspire.

So yes credit card spend IS valuable to DL and has a much higher margin than the margins on flight operations. In 2018, the pre-tax margins for the entire business was 11.6%. I don't think it is a stretch to conclude that margins on the DL AMEX income are comfortably better than 11.6%. So from a margin standpoint, credit card use has value and can expand potentially without limit, unlike flight operations which has many levels of constraint to expansion.

And they will continue to evolve the qualification thresholds as they see fit. If they think you are low value, they will change the qualifications to bump you down a notch next year.
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Old Jan 16, 19, 3:19 pm
  #48  
 
Join Date: Mar 2018
Programs: SkyMiles 2018 PM, 2019 PM, 2020 PM
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Originally Posted by Renes Points View Post
OK you don't like folks from REV MGT quotes. How about the CEO from back in Q3: https://seekingalpha.com/article/421...pt?part=single

Yes. That's what we're excited about in the future is the ability to control your travel and upgrade however you want to with whatever currency you want to use. So you want to if your company buys you a coach ticket and you want to sit in the Premium Select cabin, we'll have an offer for you that would be 17,000 miles for you or its a $170 in cash. So those kinds of offers are really where we're trying to go with all of that in making it simpler to buy or easier to buy and allowing you to buy it however you'd like to pay for it. - Edward Bastian

That is now live on Delta.com. Yes we know it is not yet "Skypennies" i.e. 1 SkyMiles = 1 Cent but we are almost there now. The point is the company people all feel it makes no difference SkyMiles or Cash!
It is not so much a matter of what I like or don't, you literally posted the proof that said "we are not there yet" then chose to ignore the parts where people have posted that "they are not there yet."

I'm just fine with whatever quotes you post, you seem to be the one that has an issue with the stuff you are posting... or is it a language issue? Did you misunderstand "we are not there yet?"

You've argued a point that you've disproven in your own posts, and acted flabbergasted with having this pointed out.

My own take is that despite this claim, and I do believe it could very well be a goal, there are clearly some uses that exceed the 1 cent valuation. The sum total is really a question of how much is AMEX spend worth to them, which has really been left out of your analysis. The OP is about the value of a customer, not the value of a skymile, so I truly fail to see how your argument relates, whether or not they ever get to their stated goal--that has not been met yet.
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Old Jan 16, 19, 9:24 pm
  #49  
 
Join Date: Apr 2002
Location: Atlanta Metro
Programs: DL Gold Medallion, AA, UA, BA, Hhonors Gold
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DL has about a zillion elites of different types. I doubt they really keep track of exactly how each one of them has earned his/her status, and it's even less likely that they're somehow reacting to these subtle differences in the way members have earned status.
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Old Jan 18, 19, 12:48 am
  #50  
 
Join Date: Dec 2014
Programs: DL DM, AA PP
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Originally Posted by FlyBitcoin View Post
I think DL has made it very clear where it draws the lines on customer value. That is the dividing lines between SM, GM, PM, and DM. If they cared about sub-groups of value, then they would create more categories.
Originally Posted by hotturnip View Post
DL has about a zillion elites of different types. I doubt they really keep track of exactly how each one of them has earned his/her status, and it's even less likely that they're somehow reacting to these subtle differences in the way members have earned status.
So I agree that Delta probably doesn't care (for example) that one person earned status via the MQD waiver whereas another accrued MQDs the traditional way. But I think it's naive to think that Delta doesn't use private measures / categorizations to differentiate customer value. We already know that they care about things like whether someone has the credit card and whether they booked via a corporate account because these factors are built into upgrade priority rules. In addition, frontline staff have access to information like how many change fee waivers a member has gotten in the past and there's also a flag for customers who are notorious complainers to prevent them from abusing Delta by trying to get unwarranted compensation.
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Old Jan 18, 19, 8:15 pm
  #51  
 
Join Date: Dec 2018
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Originally Posted by rucksack View Post
In addition, frontline staff have access to information like how many change fee waivers a member has gotten in the past and there's also a flag for customers who are notorious complainers to prevent them from abusing Delta by trying to get unwarranted compensation.
Yes, they do, and they keep track of every time we compliment an employee as well. One FT member from the EU was able to view his file per EU laws, and the text of every compliment he gave was in his file. Some customer service software is only used for complaints and negatives about us travelers, but Delta at least documents the good with the bad.
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Old Jan 19, 19, 6:52 am
  #52  
 
Join Date: Aug 2017
Location: Vietnam & USA
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Originally Posted by FlyBitcoin View Post
Yes, they do, and they keep track of every time we compliment an employee as well. One FT member from the EU was able to view his file per EU laws, and the text of every compliment he gave was in his file. Some customer service software is only used for complaints and negatives about us travelers, but Delta at least documents the good with the bad.
Thank you Bitcoin, your comments have been to the point and informative.
As you said to the OP, if the OP's business wasn't valuable to Delta, he'd know it.

I was a FO for the early 90's. I have always felt valuable to Delta because they made me feel so, even as the FFP got bigger and bigger and I was left n the dust as a Silver.
Even as the upgrades for Silvers dried up 10 years ago, Delta people, on the ground and in the air, still made me feel valued.

.
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