OH-LGG

What does it help if we dont know how many % of tier members qualified by segments?

niksal

...sigh. Must every discussion always end up in the same discussion about segment qualification? Like I’ve said before: remove segment qualification and you will never see me on a finnair flight again. I am the scum that occupies seats in the Schengen lounge one morning every week. I am the one who drinks a coke zero, a champagne or a bottle of wine when returning to Helsinii in the evening. And once a year I behave really poorly, because I book a longhaul flight that I upgrade with vouchers. And yes, a few times per year I also book some shorthauls together with my family of four, and we even access the lounge via the gifted gold card to my wife.

I am sorry that I moved from SAS to Finnair a few years ago to trouble all of you really important longhaul passengers, who pay for your business class tickets or otherwise gather your 150k points. You are so much more important clients to Finnair that I wonder why we others don’t get a yellow ribbon or some other form of identification to show our inferiority. We should then shine your shoes on the planes, sit in the laps of eachother so you can have a seat next to you free, and pay triple price for BoB, if there is anything left after you have received everything for free. We can enter the lounge only between 3am and 5am, the rest of the time it should be reserved for the worthy points qualifiers.

I bet you are all smart, successful people. Why can’t you come up with anything better than taking away benefits from others?

ffay005

Niksal makes a very good point here. I think there's zero chance that AY will discontinue the qualify-by-segment possibility. Most segment qualifiers probably fly between HEL and either ARN or OUL. They buy expensive tickets at the last minute, they require flexibility and they do have a choice of airlines. On such a short flight, it doesn't really matter what colour the exterior is painted in, inside the plane it's more or less the same, be it AY, SK or DY. So to keep these pax with AY, it pays off to give them status if that is what makes them stay with AY and keep buying those expensive tickets.

And when you give status to pax who only (mostly) fly these short routes, the cost of that status is not very expensive to the airline. Nobody pays for a seat assignment on a 40 minute flight, so the cost of assigning exit rows to segment-qualifiers is €0. Not many check in bags, so there's no cost in throwing some theoretical extra free bags at status members here. The lounge obviously costs something, but I bet a substantial part of these frequent pax don't visit the lounge very time (and at OUL there is no lounge at all). The vouchers that Niksal uses to upgrade that one leisure flight a year obviously have a value. But that's about it.

It might very well be that the segment qualifiers are the most valuable customers to AY. That German executive who flies to Asia on corporate J tickets a few times a year probably doesn't bring in as much money as Niksal does.

NoWindowSeat

OH-LGG

Small correction here: She said so many Platinums on board nowadays. She didnt say and She can't say too many.

intuition

I feel we are border-line off-topic, and I hesitated before making more comments (and if we are deemed OT then please fork).

But this has some bearing on Lumo, as the "there are too many X" and the "it is too easy to acquire Y" intensified when Finnair added this new tier.
We will all have our own views on what is easily achieved. Someone flying many segments sitting on 58Ö feels he is doing a hard job flying every day/week and thinks it is much easier to fly 3-4 longhauls in business. Someone flying 3-4 longhauls thinks he is doing a hard job getting the monies to do so and battling constant jetlag and time away from home. Naturally looking with envy towards the shorthauler.

On this we will likely never come into agreement.

However, I'd like to explain why I think we end up here. From my view as somewhat experienced with managing loyalty over the last 12 years, there is a dissonance in Finnair plus. It has been there for a long time, but it became very apparent when Lumo was introduced.

While we can't agree on tiers or points being easy, we can probably agree on that by design a loyalty program should be designed so that achiving a specific tier should be as easy/hard regardless of how it is done. A tier is a tier is a tier, right? It must be the design goal that tier X is awarded travellers of similar importance to the company.

Let's say Silver is the base line, which needs effort 1 to achieve. Now, as Finnair wants qualifications by points and segments parallel, they need to define the value of effort 1 in both points and segments. They ended up with 30 000p = effort 1; 20 segments = effort 1. And for effort 2, they ended up with 30 000p and 46 segments respectively.

Logic has it that one unit of effort is equal to another unit of effort. So we should now be able to deduce the points and segments needed equal to any unit of effort. And here is where the dissonance kicks in, as it is not at all linear.

Qualifying for Lumo by points requires 15 times the effort of silver, while it only requires 7,5 times the effort on segments. Regardless of what you think is easy and hard, it takes twice the effort to qualify for Lumo by points compared to qualifying by segments.




OK, you say, Silver can't be used as the base line because Finnair decided to skew the table for some reason. OK, let's use gold as base-line. So we assume it is supposed to be as "easy" to earn gold by points as it is to earn it by segments.
Well, that makes silver and gold to be pretty equal in a larger view, but Lumo is 5,6 times the effort of Gold by points, while it is only 3,3 times the effort on segments.





And this dissonance goes on, even if we hold Platinum as the standard level. The new scale makes the rest of the program tiers look pretty equal, but it still takes 3 times the effort to qualify for Lumo on points when it only takes 2 times the effort if you qualify on segments.







So regardless of you think it is more difficult to ask the boss for 76 tickets or to ask for 8000 monies, there is no denying Finnair skewed the entire program in favour of marginal segments. As you climb the ladder, segments are more and more valuable. If you qualify on segments and double your flying (fly twice as much and pay twice as much) you are awarded more that then points qualifier when he/she fly twice as much and pay twice as much.

Regardless of what tier you achieved, getting to next tier always requires much more effort if you qualify by points than on segments.

It is this that sparks the debate, not the desire to cut someone's benefits.

And if FA says "there are so many platinums", "it is good there is a new higher level" and knows several persons running for lumo, it is clear that this dissonance has been picked up by people, both travellers and employees.

The message is clear to me too. Finnair values people flying many cheap shorthaul segments over people flying a handful expensive longhauls. To me as a loyalty professional it seems stupid, but I am sure they have their reasons.

But when the discourse is that it is too easy to reach platinum but no recognition that segments are the anomaly, then I need to object.

Ed Size

From AY staff working in customer relations - a few years ago.

Anyhow, I don t realize that many Platinums traveling on the same flights/cabin I fly.

intuition

I would just like to add that I think the number Ed quoted is correct.

I've been told a near exact number of platinums in one market by a market executive, and it scales up to a number in that ball-park. My number is also a few years old, and the effect of lowering the segment qualifier and growing fleet is not included.

WilcoRoger

While I enjoyed your graphs, I think the conclusion you drew is incorrect. Flying 150 shorthaul segments in booking class Ö might result in as little as 75k redeemable points. This customer will have easily spent 15k€, probably more. Now one could easily fly for half of that amount 4-5x EUR-HEL-BKK in C, raking in ca 7-800k points (with the threshold boni). Both pax will be Lumo, one with 2,5 short haul Y redemptions in his hand, the other more than 25 of the same (or 7-8 longhaul C). Who is now valued more?

If you divide the figures by ca. two, you'll get a commuting Plat, putting in 75 segments at 7-8 k€, earning 30-40k and a thrice-a-year-longhaul-flyer Plat spending 4-5k€, earning 150k.

Ed Size

I feel valued well by AY+, even if I only fly 4 - 5 times a year with them I got all the benefits I need, and I do not want to change with somebody who is getting his status on segments in Y. For me status to that person is just the compensation for the suffering.

intuition

I get your point and I should probably avoided including the cost/value part of discussion. I think itis difficult to set a cost on points and segments, as we here all tend to think in the lowest possible achievable price there is, and the extrapolate from there. Also, there is the whole revenue vs margin discussion we don't need to go into once again.

There also is the complication of value of award-points like you say. As we talked about tiers, I purposely ignored them, but IRL they do exist and matters.


Anyway, what I did miss was to correct for tier bonus that only applies to points. So I did a new analysis, where I compared tier by tier with the question "How much does it take to advance to next tier, compared to what it took to qualify for this tier".
This is an important question, as this is what a loyalty program works towards. You don't just want people to qualify, you want them to increase the business with you.

Finding is still that it always takes a relatively greater effort to upgrade to next tier, if qualifying by points.



A newly baked silver needs to add 26 more segments or 50 000 points to get to gold. However, compensating for the tier bonus of 10%, it is only 45 455 points effort, as 4545 points are added for free.
Adding 26 segments on top of the already done 20 segments, is an extra 130% effort. (You need to fly another 26/20=130% segments).
Adding 45 455 points on top of the 30 000 the silver already has is an added 152% effort.

Going from Gold to Plat is a much lesser added effort. Still, the pointer needs 76% more while the segmenter needs 65%.

And going from plat to lumo is the most unequal leap. The segmenter does not even need to double his flying (+97%) while the pointer needs to add 160% more flights.

CeruleanBlue

OH-LGG

So we need one level more now.

Platinums and Lumos who qualify by points and on LH J only (must be zero miles SH!) they should be called as ValuePlatinum or ValueLumo.

All others who fly SH segments or swap points for their status or do something else that indicates low working class, low status in society and no elite, should be called low or lower class Platinum or Lumo. Should these cards also be lower status than AY Silver?

FFlash

Fakelumo
PaperLumo
LottoLumo
namr it

Courmisch

Exactly why should an executive with Finnair Platinum status owing to long-haul business class flights care about white-collar upper middle-class staffers with Finnair Platinum status owing to intra-Nordic commuting?

They might fly the same short-haul flights, and use the same lounge at Scandinavian capital airports. But other than that, they will use different lounges (HEL premium and intercontinental outstations vs HEL Schengen), different flights and different cabins.

How does the lowly Y flier inconvenience the J flier? I just don't see it. Except for misplaced entitlement and superiority complex, maybe.