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Stop Targeting and Generate Cash Flow

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Stop Targeting and Generate Cash Flow

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Old Sep 27, 2002 | 5:38 am
  #1  
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Join Date: May 2001
Location: Radcliff, KY
Programs: HH-Gold, MR Platinum
Posts: 316
Stop Targeting and Generate Cash Flow

In reading both the AA and DL boards, it is clear that the targeted promotions frustrate FF. If targeted promotions were available without targeting, how many of us would add the extra trips to rack up more mileage or qualify for additional status?

These two targetings I refer to right now are the 4 segments on DL between 9/25 and 12/15 and the double miles on AA from 10/1 to 12/15.

I wonder if it is possible to develop a reasonable list of the parameters for the targets. Things probably considered are:

Status from 2001
Current Status
Miles Flown YTD
Segments Flown YTD
Typical Fare Type
Originating Airport
Primary Route Flown

At least this would be my initial thought.


IMO, the airlines could improve their financial positions by opening the promotions to anyone registering in advance. It would be one way of filling the seats.



[This message has been edited by katfan (edited 09-27-2002).]
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Old Sep 27, 2002 | 8:43 pm
  #2  
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Join Date: Aug 2000
Location: Edmond, Oklahoma
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Posts: 941
I always thought the promotion that Delta had over the past years that rewarded you for flying x number additional segments than the ones you flew in the same period the previous year to be the smartest.

So many trips are arranged at the same time each year, and having a promotion giving bonus miles to everyone who registered, or you might not have had to register, I forget made the most sense. If the purpose is to increase traffic and fill seats giving you a bonus for flying over the previous years numbers is the best way, plus you don't have to "target", and nobody feels left out.

If as an airline I felt I had to target specific fliers I would probably target people living at airports where you have a surplus of empty seats, or where you were losing market share. I might also target people who in the past had flown a lot but had a lot fewer segments in the current quarter or year, thinking maybe they had defected to another airline, and the bonus might bring them back.

I think the airlines are spending way too much time targeting, I think they believe they can figure trends statistically to get the most profits. They should worry more about service, running on time and keeping the customer happy, as this will bring in more revenue than any magical formula. The mythical formula might increase earnings, but I don't think it will make a poorly managed company profitable.

After watching the "yield managment" theory and overselling planes, having to give away a lot of vouchers and hotel rooms I wonder if they are really making as much as it is costing them. If you give away a $400 voucher to someone to sell another $300 ticket, and the $400 voucher is used by the cutomer who would have paid in cash for a future ticket, is there really a gain in the long run?

With all the red ink flowing at the airlines there is some question. But there are so many other problems causing losses, it is hard to tell if targeted promotions, yield managment is helping the airline, or yet another bad managment decision by an industry losing so much money.
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