Yes. The point of my post was that even if the June 1 date was accurate, a non-FT'ing Radisson customer would not know that, and would assume that the deadline had passed. Maybe he'd call or write to complain and get the 4:1; or maybe he'd assume nothing could be done, and get 8:1 when he eventually converted.

True, that has been posted here, albeit after the fact (on May 7).

It does not make it official though, since Julie, aka Radisson Customer Service, posted the following here:

You know this how? Please cite your source of information.

Rip off huge chunks of mileage? Please explain to me exactly how it is that we go about 'ripping off' such mileage? Lest you forget, the airlines set the price for that mileage. It's not given away free.

I'm not sure where you see these huge losses coming from but FF award redemptions do NOT cost the airline what they would charge a revenue passenger. The actual costs of an additional passenger filling a seat are marginal to the airline. That's what revenue management is about and that's why award redemption is always harder than buying a ticket.

Here's a puzzle for you, if I earn 150,000 miles with one flight (entirely possible at one point on CO due to multiple concurrent mileage bonuses), am I still strip-mining the program?

My friend, business is not about "From each according to their abilities, to each according to their needs." It's the responsibility of any business to make sure any offers are healthy for their bottom line. If they aren't, why are they offering them?? If the promo was a loss leader, why not put in language to the effect of "One to a customer?"

To all the people lambasting wormwood and his theories on the Radisson/GoldPoints changes:

Ask yourselves the following questions:

1) If Radisson/GP weren't losing money on this promotion, why would they change it so severely in their favor?

2) If they weren't losing money on this promotion, why is this now the second time they've significantly changed terms (the reduction of ValueMags points being the first) with very little or no advance notice?

3) If, as some of you claim, they actually were making money by doing what they were doing, would it not make business sense to keep doing what was profitable?

Personally, I tend to agree with what wormwood says about it. They had a system which they promoted, yet got used to a point that they didn't anticipate - and because people were using that system to that level, they took steps to ensure that it didn't happen in the future.

Consider the math on the ValueMags deal:

450 points/$ = $4.44 for 2000 points
2000 points = 500 FF miles
$4.44 for 500 FF miles = $.0088 per mile

If GoldPoints were paying $.01 per mile, that alone says they were losing money on each transaction. However, we don't know how much they paid, or how much ValueMags gave as a commission for each transaction to GP.

What we do know, however, is the numerous hours that GP customer service people spent researching transactions that didn't go through, and dealing with people (many of whom are documented here on FT) as spending time on the phone or writing e-mail to claim missing points and make numerous transfers to the FF account of their choice. From a pure payroll point, I highly doubt that this was cost-effective for them to continue, even if they ended up making a small profit on the miles or commissions.

If a business loses money on each single transaction, then it makes sense for them to abandon it and move on to something else. It sucks that they did it with no notice. That, though, is their right to do.

Mike

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[This message has been edited by nako (edited 05-13-2002).]

Who knows? Perhaps they felt like it? We don't know the specifics therefore second guessing management is like pissing in the wind.

Quote:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">2) If they weren't losing money on this promotion, why is this now the second time they've significantly changed terms (the reduction of ValueMags points being the first) with very little or no advance notice?

The auditing of ValueMags points wasn't a reduction. Some orders posted mistakenly at 150 points and some didn't post at all, which GoldPoints corrected manually.

Quote:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">3) If, as some of you claim, they actually were making money by doing what they were doing, would it not make business sense to keep doing what was profitable?

Not necessarily. Just because it's profitable doesn't mean it's good business sense. The airlines might not have liked seeing so many miles coming in from a partner and could have severed their relationships had such a promotion been allowed to continue. For all we know, Goldpoints diluted the mileage redemption at the behest of their partners.

Quote:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Personally, I tend to agree with what wormwood says about it. They had a system which they promoted, yet got used to a point that they didn't anticipate - and because people were using that system to that level, they took steps to ensure that it didn't happen in the future.

Consider the math on the ValueMags deal:

450 points/$ = $4.44 for 2000 points
2000 points = 500 FF miles
$4.44 for 500 FF miles = $.0088 per mile

If GoldPoints were paying $.01 per mile, that alone says they were losing money on each transaction. However, we don't know how much they paid, or how much ValueMags gave as a commission for each transaction to GP.

No we don't, and that's exactly why all this conjecture is meaningless. What business runs a promotion DESIGNED to increase usage/sales (and that's what winter sales are for, are they not?) and then says, "Oh, wait, I wanted you to buy more but not that much!". Isn't that a mixed message? By running a promotion are they not inducing us to do more business with them? This is where I believe the people who've been pis*ing and moaning about how we took advantage of GoldPoints are missing the point. WE DID EXACTLY WHAT WE WERE SUPPOSED TO! In what business do they run a promotion they only want to be MODERATELY SUCCESSFUL!?

As far as the "great money loss" I assure you, if the point redemptions were going to seriously financially cripple the company or even take it under they would have taken action to limit their exposure, from limiting the amount of points redeemable per year (a la LatinPass) to prohibiting the conversion of non-Radisson points to Radisson airline partners at the Radisson rate (GoldPoints has their own 10:1 conversion ratio to far fewer airlines) to declaring bankruptcy, terminating the program, and saying "sue me".

Quote:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">What we do know, however, is the numerous hours that GP customer service people spent researching transactions that didn't go through, and dealing with people (many of whom are documented here on FT) as spending time on the phone or writing e-mail to claim missing points and make numerous transfers to the FF account of their choice. From a pure payroll point, I highly doubt that this was cost-effective for them to continue, even if they ended up making a small profit on the miles or commissions.

Which is their own fault for not having systems in place to automate the processes involved. Our transactions were not out of the ordinary, they were larger than most but they were not complex. The only reason why things took as long as they did and required as much effort as they did is due to the way GoldPoints is organized and they are solely responsible for that. Again, why am I in the wrong for doing more business with/through them?

Quote:

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">If a business loses money on each single transaction, then it makes sense for them to abandon it and move on to something else. It sucks that they did it with no notice. That, though, is their right to do.

Mike

They haven't "abandoned" anything at all. They've cut the point value in half which stinks but there's no way to know why they chose to do so. If it is due to Valuemags they're closing the barn door after the horse has escaped. Again, there's no explaining poor management.

So, to both you and Wormwood I pose this question : What of the many internet businesses that gave something away for nothing and extolled free services. Are we abusing them as well by using them? So many businesses went belly up, is it OUR FAULT that such a company went under BECAUSE IT WAS BUILT ON A FAULTY BUSINESS MODEL WITH NO PATH TO PROFITABILITY??? By your logic, we're to blame for that as well for using their services.

Gentlemen, running a business brings with it a great responsibility. There's no safety net and your ... is out there on the line every day. That's just life. Yes there's fair dealing and I believe in being equitable and honorable. Had Goldpoints come to me and said, "Mr. Kanebear, we lost quite a bit of money on your order. Would you be willing to accept XXX as compensation or perhaps like to have your order cancelled and your credit card refunded?" I would have listened. I can't say what action I would have taken but I probably would have agreed to cancel the orders and refund my credit card... no harm, no foul.

The fact is, they did nothing of the sort and in fact transferred my points with a thank you and a smile. In the absence of such contact from them, I can only assume that they had no problems with my transactions and were satisfied with the result. It is not my job to second guess their decisions.

And Wormwood,

Disrespectful of those who don't have as much? So, this begs the question. Do you miss the USSR much??? Should I buy less food because someone else can't? Should I earn less money because someone else makes less than I do? Last I heard, Communism failed miserably.

In any case, compadre, I appreciate your distaste for gluttony. As a proudly overweight American, I'll toast you as I heartily cut into my medium-rare 24 oz. Porterhouse steak.


[This message has been edited by kanebear (edited 05-13-2002).]

Well, if you are running an all-you-can eat buffet and you forget to ban take-out, you might be in a similar position to Radission on this promotion. Wormwood says that we should not take advantage of what is almost certainly an oversight. I say that many people will do so, since the rules allow it, so my individual decision makes negligible difference overall. There is truth in both points of view, which is why neither of you will win the debate.

I have agreed all along that Radisson is within its legal rights to make changes with zero notice, but I maintain that this is no way to run a loyalty program. Members are expected (except possibly by wormwood) to maximize their benefits under the rules. The fickleness of their loyalties is the raison d'etre of loyalty programs. Because of this inherent asymmetry, I don't think it's reasonable to expect the members to assign the same value to maintaining good relations with the program that the program should assign to maintaining good relations with members. Just my 1 mile (=$.02).

If a program wants me to be loyal, it has to earn it. For example, if Southwest were ever to offer anything like ValueMags, I'd be on the phone pronto telling them to withdraw it immediately before the s**t hit the fan and caused financial losses and/or a devaluation of member benefits. They take good care of me and I will help them every way I can. (I wouldn't do this for any other program, BTW.) Maybe somebody did phone Radisson and was ignored, or maybe the holiday shutdown delayed their response; I don't know.

I spoke with Andrew at ValueMags.com the first day this promotion was made public. And I told him what to expect, and if anything I told him to expect more FlyerTalk
members to take advantage of than did. And his comments were "Great, we're ready. We'll all be happy then". So i don't feel any sorrow for anyone at "ValueMags.com" or "GoldPoints.com".

IMHO, if anything, this is a clear indication of how incredibly amateurish were people responsible for this promotion.

I agree with you here completely. Valuemags had *nothing at all* to do with people who prefer to stay at Radisson hotels, unless they happened to participate in the ValueMags promotion. Yet the end result (8:1 mileage transfer ratio) has harmed the very people this loyalty program is designed to lure and keep, which could potentially cause Radisson *much* greater harm over the long term than Valuemags did. Again, I come back to poor management decisions. If they are trying to prevent another ValueMags, they should limit/halt redemption of GoldPoints through Radisson for mileage conversion, not harm their most loyal guests.

Wormwood and I will never agree, that much is clear. We'll always be on opposite sides of the issue and will have to agree to disagree.

If you have the time and inclination to do a search on wormwood's posts you will see that by his own logic any participation in the valuemags offer was unethical. You will also see that he participated in the promo.

Many of us saw the valuemags promo for what it was, a business offer made to us calculated to get us to participate. Nothing unethical about participating. Wormwood, on the other hand, saw it as unethical from the get go and yet still choose to engage in what he himself deemed unethical activity. He has no claim to the high moral ground here at all, quite the opposite.

My guess is that he has it in for the Milespy people for some reason and that is what fuels his continued hot air. I think the rest of us can pretty much ignore him. It works for me!


[This message has been edited by Mvic (edited 05-14-2002).]

Kanebear:

My inclination as to why GP would engage in such a promotion knowing that they'd be losing money is because it would be a loss leader. You know, the old "get people in to buy something at a great value, and even though we lose money on it, we'll make it back up in the long run because they'll buy other stuff." Having worked in a retailer notorious for doing this on a daily basis, I've seen how well it can work when done correctly.

And for GP, it backfired in the worst possible way.

Whose fault is this? We can argue back and forth all day as to who is to blame. The point is - I find it difficult for you or *anyone* to assert that GP didn't lose money in this whole deal.

Oh, and yes, this is the second time that they've changed terms without notice. Remember, the 150 pts/$ fiasco with ValueMags began when they attempted to reduce the point value for purchases four days before the promotion was supposed to end.

Mike

I never stay at Radison. (I give as much as possible of my business to Hilton since I can transfer FF miles into Hilton, which is what I usually do with miles, since I almost never can get a free flight when I need it.) Thus, I was not a member of Radison's frequent guest program. When I learned about Valuemag, I joined, but my only intention was to buy everyone magazines for Christmas, and then have Radison convert the resultant points to FF miles, which I would then launder into Hilton Hhonors points. Hence, Radison would not have gotten a single revenue night out of me that they were not going to get anyway, and they still won't, even though I am now a member of Radison's program. I suspect that Radison realized that there were a lot of people out there like me, who were just in it for the miles and who were very INfrequent guests at Radison properties and thus the program refocused its priorities on maximizing the program's benefits from the point of view of those who actually stay at Radison properties.(Valuemag's plug got pulled a day before I placed the order; I thought I had until the end of December, so I spent too much time asking everyone what magazine they wanted, so it didn't work for me.)

kanebear

wormwood - I am unsure how you felt comfortable participating in the promotion if you consider it such a ethical dilemma.

Perhaps I misunderstand your situation.

To each his/her own!