RealDLInsider

Hey All! Hope everyone is doing well and you are all preparing for what will likely be a busy holiday season. As we approach year-end, there are a number of things underway here at Delta:

We heard you and other customers loud and clear around promotions beyond 125K MQMs. As some of you are aware, we launched a communication a week or so ago targeting customers who have already or could achieve 150K MQMs. The choices for reaching 150K MQMs this time around are 25,000 bonus miles, a complimentary Crown Room Club membership, or the ability to gift someone Gold Medallion status. Additionally, for those who have already achieved 150K MQMs, you will be automatically gifted your choice. I believe someone asked if there were going to be higher incentives, and unfortunately at this time – no.

While we discuss higher incentives, I’ll briefly highlight our unpublished 4th tier program. It obviously exists, and there is some rationale for how people get in. That rationale is unpublished, but is based on total revenue (including air travel, co-brand card spend and partnership usage). We also include a variable around the actual revenue per mile flown (a.k.a. yield), which ensures that the customers who pay very high fares or who fly often in First, Business and Premium Coach fares, get in. This would mean that a customer who flies 125K MQMs on primarily Business and First Class fares could get in, where a customer who flies 150K MQMs primarily in lower coach fares, probably won’t get in. The feedback around the program this past year from the participants was overwhelmingly positive. The result is that it will continue with a few modifications – again based on customer input. We will be adding some sizable program features around irregular operations support, will be extending the VIP desk hours, and will be modifying the gift program (all to the good). We will also be adding a feature which lets customers who are in, know what they need to do to stay in. For example, once in the program, we will likely have an MQM requirement to stay in.

SkyChoice Changes … It’s gotten quite a bit from the press and on flyertalk and I understand most is negative. As much as I realize that no one wants to believe me, and that some will never trust me, the reality is that the change is immaterial overall and will not devalue the currency. It would not be in my or Delta’s best interest to do anything that would have a material effect on the value of the currency, for a program that drives many billions of dollars in incremental business. Also, like most customer-oriented organizations in the airline industry, your job is a balance of giving and taking. This was a giveback to our revenue management organization to help protect the most valuable and profitable flights where we can fill the aircraft will full-fare paying customers, and in exchange, I believe got something bigger. The problem right now is that the customer takeaway is public, but the customer giveback is not. Once everything comes out and the SkyChoice change is in place, then maybe you’ll let me continue the debate?

Most of you probably saw, but we did extend Medallion Marketplace to all Medallions, and although travel is still the primary way customers want and do burn their miles, many do burn for this merchandise – particularly around the holidays. Allowing Gold and Silver Medallions to redeem for merchandise, eliminating the previous 200K mile cap for purchases, and some upcoming upgrades to the experience and product line, you should see this benefit be even better. More to come on this.

That’s most of the big updates, but I thought I’d leave you all with some interesting results from the 125K MQM threshold promotion and what items were selected thus far:

- 45% chose the bonus miles
- 32% chose the MQMs
- 23% chose the iPod

Have a good weekend! Til’ next time!

Jeff

IrieDame

Thanks for the update Jeff...I changed my travel mid year in 2007 and then for 2008 to only buying fully refundable FC fares and will proabably have at least 100k in MQMs next year...I am very interested in the 4th tier so will see how I pan out at the end of 2008.

Interesting stats on 125 promo...the Ipod selection percentage surprised me.

Akulashark

As always, thanks for participating in an organization that is concerned with your business from the consumer standpoint. Many other services could learn from your example. I did have a question about your 4th tier. You made mention that you also look at co-brand card spend, how does that compute in the equation? I will probably end the year in mixed full fare and discount fare at right around 100k mqm, but I spend $6000/month on my amex quite consistantly. I realize I would be the bottom of the barrel but if you are laying down a challenge for me next year I might move some of my *alliance business over to get into the club.

BTW, I just got my platinum kit today, I think it was right at about 4 weeks. Good job to your team for the quick turn around from a systems and materials stand point.

Bulldog King

Hmm?

Interesting......

I for one am quite interested in hearing more details (especially about this 'giveback') before I take any stance on this issue.


Yeah.....I noticed the changes....and even redeemed additional miles for some gift cards as a result of them.

One thing to note about this....is that the mileage calculation for redemption would seem to be a bit off......in that a $100 GC costs slightly more (an additional 100 miles) than 2 $50 GCs from the same merchant.

I should note that it has been my experience that other programs which offer similar redemption options (Gift Cards/Certs in exchange for points/miles) seem to work the other way..........i.e. offering a 'discount' when redeeming for a larger single GC award.

I am also glad to hear that the mileage cap has been removed.....as I have already redeemed well over 100,000 Skymiles at the Marketplace during 2007.

Perhaps you could track annual/lifetime redemptions in order to establish elite tiers for the Medallion Marketplace that offer exclusive Marketplace benefits?

Seriously.....one important change/improvement that I would like to see is the addition of online order status........especially as an indication of when an order is shipped....as well as possibly tracking info/# for Gift Card orders.

Thanks for keeping in touch with us......as your continued presence on FT is most appreciated.

A.J.

Feather Man

Jeff, in regards to the changes in redeeming miles for flights, it is not a question of believing you or not believing you. I will grant you the benefit of the doubt and assume that you truly believe the changes will have minimal affect.

But for me, the proof is in the pudding. I cannot find Skysavers for any of my preferred destinations. And before the recent change was made regarding availabilty 331 days out, I would call right at midnight and STILL could not find the seats I desired. Please correct me if I am wrong, but my only alternative is to check back on a frequent basis to see if seats will be released. I can't speak to the value of your time, but mine would be better spent doing work. The last three times I have redeemed miles for award travel, in each case, there was no availability on DL Metal. So I have used CO, SQ and NW in the past 9 months. Now you are going to implement a surcharge to book with partners. Of course, the Skymiles consumer is upset with these changes. And unless your competitors follow DL, you have just opened the door to give people a very good reason to look at other carriers and their rewards programs. In this case, it would have been far better for DL to be a "follower" instead of a leader in the devaluing accrued miles.

Word has started to get out. The DL partners who buy Skymiles to promote their credit cards, their car rental agencies, their hotels, etc are quickly going to learn how the end consumer feels about these "rewards".

iCorpRoadie

Thanks for the update! Interesting to hear about that super secret 4th tier!

DiverDave

All very well, but can't you at least throw some sort of bone to your ordinary FO, GM, PM customers? We at least need all the irregular ops support we can get.
You are always to continue the debate, but seeing is believing. Given the current mindset about Skysaver availability, this will be difficult.

Thanks for the update!

David

DMIrishFlyer

Jeff - thanks for the update on all of the above, I do appreciate your taking the time to give us these updates (wish they were more frequent!)

Regarding SkyChoice changes, I'll give you the benefit of the doubt and I'll try to be optimistic. Given the fact that I cannot find a ANY seat on any DL flight going anywhere I want to go on the dates I want to go on - I eagerly await the "customer giveback" and what it entails.

enigmamatt

Jeff --

After doing some back reading I found out that at one time it was possible to get on the list for the 125k MQM bonus even if you were not targeted. Is that still a possibility?

Matt

ecaarch

Sometimes we collectively like we you posts, and sometimes we don't, but I doubt anyone here would disagree when I say that we def appreciate your participation on FT. ^

AndyTLe

So make the customer giveback public. The best defense is a good offense. While the "negative" is all over the news, Delta comes out with half-assed responses to the press and with flyers. If this giveback is so great, why not come out with it to offset all this negative publicity?

Some of us loyal to Delta have been happy with the SkyMiles program. Some of us can't switch for one reason or another (home aiport, corporate travel), others can and I believe will switch because of the continued devalution.

DMIrishFlyer

Thats a fair point and question.

DiscoPapa

I would imagine, based off of Jeff's comments and from a recent interview I read with Bastian (I believe...or maybe it was Jeff?), that this "customer giveback" is no doubt in order. However, I am getting the impression that it is not quite ready for public announcement yet. Who knows what it is, but I'm guessing it will be some sort of "+1" for the FT-minded consumer. Unfortunately, there have been a lot more "-1"s lately.

Jeff, I appreciate you spending time to keep us FT'ers updated....if only you'd post more!

yorock

I'll bet a lot of those Ipods wind up in stockings. Folks banking this many MQMs every year usually aren't in need of more miles.

avflyer

Jeff, as others have stated, thanks for joining us and for answering some questions. If for one, am with you on the giveback to revenue management and take your word that the reduction in SC inventory will be minor.

Sadly, all this talk about Sky Choice, Sky Choice, Sky Choice, I feel is a distraction from a more serious issue regarding changes to Sky Saver availability.

1) Not loading seats in at the 331 window is a huge disappointment and one that makes it very hard to plan all the other aspects of travel (organizing with family/friends/associates, cruises, hotels, inter-Europe travel, etc.). I have heard others say that DL never had an official policy for loading at the 331 day window. To this I say NOT TRUE. For years I have been able to book such travel. This year (for next summer) the game was changed.

2) By selectively loading such inventory when Delta feels like it, you cause us, your most important customers (or so you say) to continuously check inventory which is frankly insulting as it wastes my (our) valuable time.

3) By waiting to load seats until you can determine how well the route will sell out, what you are really saying is that more and more seats will most likely load very close to departure and perhaps not at all. Essentially, a massive reduction in SS award seats. I say, Delta must allocate a small portion of most of its daily routes for SS redemption.

While all of us here want Delta to succeed, we have a right to expect that these seats will be available to us during prime time and not just during off-peak travel times. We have a right to expect to be able to book a return from Europe within a vacation time frame (a week or two) to attach to the outbound flight we were able to score. We have a right plan our trips in advance and not just at the last minute. And since our time is money too, we have a right to expect to book such travel without having to make calling Delta (or going on line) a late night (for east coaster's) daily ritual. I need my beauty sleep.

And in exchange, Delta has the right to expect that we will remain loyal to her.