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Wal-Mart changes FF policy
Interesting article on Wal-Mart's FF policy:
Full story here Fort Worth Star-Telegram Posted on Sat, Jan. 28, 2006 Wal-Mart will allow employees to keep frequent-flier miles By TREBOR BANSTETTER STAR-TELEGRAM STAFF WRITER After decades of missing out on one of the most widespread business-travel perks, employees of Wal-Mart will finally get to keep their frequent-flier miles beginning this year. Effective Feb. 1, the retail giant will change its long-standing policy of collecting miles earned by traveling employees and using them strictly for corporate trips, executives said. Wal-Mart will also allow employees to travel in first class or business class for the first time on certain flights. "We feel like this enhances our ability to recruit and retain our associates and makes us a higher-level employer," said Dan Fogleman, spokesman for the Bentonville, Ark.-based company. For 25 years, the vast majority of people who travel for business on most major airlines have been able to accumulate frequent-flier miles for their personal use. That was one of the key elements of the program when it was invented by Fort Worth-based American Airlines. The idea was that if the traveler personally received the benefit, he would make sure his corporate travel department always booked flights on that airline. It succeeded far beyond American's expectations, and today millions of people are enrolled in frequent-flier programs with every major carrier. Airlines also partner with hotels, car-rental agencies, credit cards and a host of other businesses to distribute miles. Business travelers are typically among those who benefit most, cashing in miles for free trips to Hawaii, Paris and other vacation spots. But a select few companies, including Wal-Mart, Chrysler and Anheuser-Bush, were able to negotiate deals that allowed them to pool employee miles and use them for business travel, said Randy Petersen, who publishes a newsletter, Inside Flyer, that caters to corporate travelers. Those deals, although rarely publicized, were allowed because of the immense volume of travel those companies booked. "Wal-Mart has been doing it this way for a long, long time," said Petersen, who managed Wal-Mart's frequent-flier program as an independent consultant in the late 1980s and early '90s. He estimates that at the time, the company was saving close to $1 million annually by using the miles for business travel. The policy change means the airlines will have the opportunity to build loyalty among Wal-Mart's employees. Executives at American say that many travelers rank the carrier's frequent-flier plan as a top reason to fly the airline. Fogleman said Wal-Mart hopes that some of its business travelers will use their miles for upgrades to first class. "When they travel on a regular basis, this can help them arrive both physically and mentally prepared to do the job," he said. Petersen said that with airfares at historically low levels, the cost of managing the pool of miles had likely become greater than the free travel benefits. He also speculated that Wal-Mart got lucrative corporate discounts with major carriers last year, which allowed the company to finally turn the frequent-flier benefits over to employees. American, Delta Air Lines and others renegotiated most of their corporate discounts last year after an industrywide reduction in business fares. ------------------------------ Trebor Banstetter, (817) 390-7064 [email protected] |
thanks for posting, a good friend of mine travels alot for WMT. ill have to let him know. i always thought it a waste to not get the miles. couldnt they have taken the miles but still gotten the perks?
grb |
Interesting, thanks ^ And welcome to Flyertalk, FWFlyer :)
In case you didn't know, Randy Petersen who is quoted herewith, is our Godfather, so to speak :D |
I understand that the Wal-Mart traveller didn't get to keep the miles earned, but did they get to keep any status earned?
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Glad I've not even had the urge to set foot in their stores for 6+ years, much less work for them!
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Originally Posted by Spiff
Glad I've not even had the urge to set foot in their stores for 6+ years, much less work for them!
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Originally Posted by boazs
One can only imagine what would happen to loyalty programs and the airline industry once Wal*Mart Airways and its associated Miles & Smiles Frequent Flyer Program are launched... ;)
Well, the age of the greeters at the door will be still about the same as what I'm used to on the majors. :rolleyes: Outoftown, today in Portland, OR. |
Originally Posted by boazs
One can only imagine what would happen to loyalty programs and the airline industry once Wal*Mart Airways and its associated Miles & Smiles Frequent Flyer Program are launched... ;)
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Originally Posted by grbflyer
thanks for posting, a good friend of mine travels alot for WMT. ill have to let him know. i always thought it a waste to not get the miles. couldnt they have taken the miles but still gotten the perks?
grb |
Originally Posted by cur
Some companies allow you to collect miles for status, but they wouldn't allow you to use miles for personal trips. IMO, that's a reasonable compromise.
I fly the miles, I keep the miles. Anything less and I'm working elsewhere. |
Originally Posted by cur
Some companies allow you to collect miles for status, but they wouldn't allow you to use miles for personal trips. IMO, that's a reasonable compromise.
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Originally Posted by cur
Some companies allow you to collect miles for status, but they wouldn't allow you to use miles for personal trips. IMO, that's a reasonable compromise.
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NOW you guys are starting to understand what it's like having your airline employee travel benefits jerked around or limited or what have you... When I frequented the UA board in my UAX days, all of us were quite frequently blasted over our travel benefits and what classes or service we "should" or "shouldn't" be permitted to sit in.
This thread shows us that you guys receive travel BENEFITS just like we did. If you are in the seat as a requirement by the person paying for your travel expenses, why *should* *you* receive the miles associated with your travel? After all, it's like asking why an employee "should" be able to sit in Biz or F class. The truth of the matter is that it is a benefit negotiated by BOTH corporate travellers and airline employees. What would happen if the 0 miles fare classes really took off, and you were required to book into them? Then NOBODY would be able to split the pie. How would that sit with you? What if they told you you could get miles, but you would be required to pay the fare difference required? Would you pay it? |
Originally Posted by DHAST
NOW you guys are starting to understand what it's like having your airline employee travel benefits jerked around or limited or what have you... When I frequented the UA board in my UAX days, all of us were quite frequently blasted over our travel benefits and what classes or service we "should" or "shouldn't" be permitted to sit in.
This thread shows us that you guys receive travel BENEFITS just like we did. If you are in the seat as a requirement by the person paying for your travel expenses, why *should* *you* receive the miles associated with your travel? After all, it's like asking why an employee "should" be able to sit in Biz or F class. The truth of the matter is that it is a benefit negotiated by BOTH corporate travellers and airline employees. What would happen if the 0 miles fare classes really took off, and you were required to book into them? Then NOBODY would be able to split the pie. How would that sit with you? What if they told you you could get miles, but you would be required to pay the fare difference required? Would you pay it? |
Originally Posted by DHAST
NOW you guys are starting to understand what it's like having your airline employee travel benefits jerked around or limited or what have you... When I frequented the UA board in my UAX days, all of us were quite frequently blasted over our travel benefits and what classes or service we "should" or "shouldn't" be permitted to sit in.
... The truth of the matter is that it is a benefit negotiated by BOTH corporate travellers and airline employees... The fact of the matter is that FF programs are not a "benefit." They're a marketing program devised and adminstered by airlines to increase customer loyalty. Their purpose is not to reward past behavior, though that's what they do. It's to encourage future behavior. The minute they stop doing that, they're out the window in a heartbeat. An airline and company can agree that the company will receive discounts if it puts all or most of its travel on the airline. At that point the airline no longer has to encourage the company's employees to use it. The company takes care of that. The FF program is therefore, in terms of its original intent, useless. The downside to the airline is that, by removing something frequent travelers have come to expect, it will incur ill-will. That will show up in several ways: resentment and demotivation, avoiding beneficial but optional travel, avoiding the airline when employees have a choice, "proving" that using a different airline is "necessary" for a specific trip, bad PR for the company, and so on up to good people quitting. It's hard to measure the bottom-line damage all these do, but one can't deny that they exist. This has nothing to do with airline employees. It's a matter of airlines starting the game and making the rules. We try to learn the rules and play the game as well as we can. The airlines created the monster. Now they have to live with it. |
Originally Posted by JS
Why the hostility? :(
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Effrem,
I have one question for you... isn't it fiscally responsible for a company to require you to use award miles on company travel that were gained by flying on company paid travel? Why or why not? Presuming that you fly enough to care about airline related marketing tools, doesn't elite status in and of itself achieve the same goal about encouraging future behavior? At the level of flying I do, the base miles are inconsequential. It's the elite perks that actually get my feet and butt on an airplane. You're right in that it sucks to have the rules of the ball game changed at the 7th inning stretch, but, as is anything with life, the only constant in life is change. |
Originally Posted by DHAST
Effrem,
I have one question for you... isn't it fiscally responsible for a company to require you to use award miles on company travel that were gained by flying on company paid travel? Why or why not? Presuming that you fly enough to care about airline related marketing tools, doesn't elite status in and of itself achieve the same goal about encouraging future behavior? At the level of flying I do, the base miles are inconsequential. It's the elite perks that actually get my feet and butt on an airplane. You're right in that it sucks to have the rules of the ball game changed at the 7th inning stretch, but, as is anything with life, the only constant in life is change. It may or may not be fiscally responsible. Kinda depends on the company. The article says that with the lower airfares (I'm thinking since the Saturday night stays were eliminated) it costs more to administer than Walmart saved, so it would be fiscally irresponsible to continue it. That's why Walmart dropped it, not because of some revolt in the ranks. And if it doesn't make cost sense for Walmart, with the way fares to Bentonville are, then I can't see it making sense for anybody, although I'll bet there are a few companies out there who haven't figured this out yet. Companies set the terms and conditions of employment. As long as you know going in what they are, and agree to it, it's OK. And things do change, and if you really don't like the change, your only option is often to move. And I agree that if you fly enough, the last thing you want to do on vacation is spend another night in another bed in another hotel in another city. For very high mileage flyers, the status is everything, and the miles don't mean that much. For intermediate flyers, they don't spend that much time on the road, they don't get as much status benefits, and the miles really are meaningful. |
Originally Posted by DHAST
Effrem,
I have one question for you... isn't it fiscally responsible for a company to require you to use award miles on company travel that were gained by flying on company paid travel? Why or why not? Presuming that you fly enough to care about airline related marketing tools, doesn't elite status in and of itself achieve the same goal about encouraging future behavior? At the level of flying I do, the base miles are inconsequential. It's the elite perks that actually get my feet and butt on an airplane. You're right in that it sucks to have the rules of the ball game changed at the 7th inning stretch, but, as is anything with life, the only constant in life is change. It might be "fiscally responsible" for a company to use milk crates for office furniture, limit bathroom breaks to 5 minutes every 8 hours and make me pay for my own staples. Guess what? I'm not going to work there! Same goes for my FF miles. If a company tries to pull that nonsense, I am gone and I'm pretty darn good at what I do. As to airline employees in premium cabins... You want to pay like we do, great you're welcome to the product too. Otherwise, after all paying passengers have been accommodated, either in paid fares or upgraded with the appropriate currency (miles, points, etc), then airline employees are also welcome in the premium cabin. No arguments there. Employees in premium cabins over paying passengers (not complimentary upgrades)? I will avoid any airline that has this policy. Delta, Northwest and Continental all have BS rules that favor non-rev travel in international business over paying passengers willing to pay miles or certificates to upgrade. Consequently, the Sk***am Alliance gets about 20% or less of my annual travel. :) |
Originally Posted by gemac
Effrem may have gone to bed. :rolleyes:
It may or may not be fiscally responsible. Kinda depends on the company... There's a fine line between "fiscally responsible" and "penny-pinching." The first is good. The second is not. Personally, I think trying to grab employees' FF miles crosses the line, but anyone should feel free to disagree - and to run their company accordingly, if they have one. (I've put my money where my mouth is in that regard, as CEO and half-owner of a consulting firm with a fairly large international travel budget a few years back.) For that matter, I also think that trying to force employees to use their miles for business travel gets into "penny wise and pound foolish" territory. |
Originally Posted by DHAST
Effrem,
I have one question for you... isn't it fiscally responsible for a company to require you to use award miles on company travel that were gained by flying on company paid travel? Why or why not? 85% of my work travel occurs with departure times after 6pm. I don't get paid a higher salary than similarly skilled who work on projects which do not require as much travel. Allowing me to keep my miles is a benefit that costs my employer nothing. In fact, in the long run it saves my employer money. And I have offered to use miles before without reimbursement - on a ticket that was going to cost $1800 but was wide open in F award space, and was told that it was a nice gesture but that they could afford the expense. |
Originally Posted by Spiff
Glad I've not even had the urge to set foot in their stores for 6+ years, much less work for them!
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It's "fiscally responsible" to cut costs where the dollars saved aren't offset by consequences such as lost productivity, increased employee turnover or difficulty in attracting good employees in the first place. Unfortunately, the dollars saved are much easier to measure than these consequences, and performance management incentives are usually skewed towards easily measurable (and generally short-term) cost savings even in cases where they are counter-productive.
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Originally Posted by Spiff
Glad I've not even had the urge to set foot in their stores for 6+ years, much less work for them!
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on that note... did you know that Target employees don't get to keep their miles? a sore matter for some here in MSP...
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I've switched to K-Mart anyway. ;)
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