UrbaneGent

From what I'm seeing from the "new" United's management, elite status matters very very little and it's trickling downwards. I do see the agents at the airport try to be nice, but I don't think Messrs. Smisek et. al., cares. It seems it's all about maximizing the revenue the airline can generate from a single passenger right before he/she purchases a ticket to the point of check-in at the airport (a little is on the aircraft...for now - watch, that is going to change soon). And it doesn't matter if it's a paid ticket or a mileage ticket (who would have ever thought UA would offer a TOD on a mileage ticket!?! It's insanity!).

The mentality? From the very moment the passenger is about to (and then does) purchase a ticket, throw at him/her every single opportunity to generate a sale - from seating to saving the reservation for 24 hrs to paying now ahead of time if you decide to change your itinerary to luggage to selling an upgrade - and everything in between. And after all of that, if there's an empty seat in the front of the plane available, well, rather than the seat go empty, toss it to an elite as a token of our appreciation.

Speaking of elites, I will bet you any money, I can see it in the boardroom, heck, I can even picture it over dinner with his executives as they order that $1600 bottle of wine at Jean-Georges. If Monsieur Smisek could, he would get rid of almost all the benefits of being an elite...oh wait, that's what he is doing now. Why? Because he sees for every elite that takes an economy plus seat for free, he could have easily sold it to a regular ol' traveler for twenty/fifty bucks or a credit card holder at $359 a year. For every elite that gets an "unlimited upgrade", he could sell it to anyone willing to pay even $49 and then some, even on a mileage ticket. Again, after all that there's an empty seat...then appease the elite.

So throw the elites a bone, just don't tell them it's fake raw-hide, tell them we get unlimited potty breaks once a day for five minutes - oh, the grass is actually plastic and the fire hydrant is made out of wood...treat us all like dogs. Because that's how we are all being treated.

Sit. Jump. Roll over. Speak!
Unlimited Upgrades. System-wide 1K upgrades. Lifetime Benefits. GS!

Wow, will you look at that!

Sure, the airline has to survive and thrive, but there's a fine line until you alienate your customer. Can you imagine if ALL companies did this? If promises made to their customers were broken on a whim? Where's being noble in all of this? Where is leaving one's legacy? Where is trust? Where are all the fundamentals of service and quality?

A company, in my opinion, can not, simply can not survive if it does NOT service their customer with a high-quality product at a good price, it all has to be there: SERVICE-QUALITY-PRICE. In the short-term yes, United will generate $$, in the long-term, it has been proven over and over again in other industries, customers will leave.

UG

jetsetr

Absolutely agree with what you are saying above. But I don't inherently hold it against UA to try and maximize revenue - they're a corporation trying to survive in an industry that historically has had difficulty sustaining profitability, especially when fuel prices are skyrocketing. Yes, as dgcpaphd noted before in a response to a post I made, UA did make a tidy profit last year. But as said in many a financial prospectus, "past performance does not guarantee future returns."

UA has a fiduciary obligation to maximize shareholder value. But of course, we can disagree with UA as to what we believe are in the best long-term interests of the company, versus short-term interests, especially vis-a-vis customers who have been loyal for many years. As I had said in an earlier post, I believe that UA has swung the pendulum very far in their favor at the expense of elite benefits, and that there probably is wiggle room to swing the pendulum back to a more elite customer-centric focus, as long as we can reasonably quantify the value of the benefits (and associated revenue) we would like reinstated.

And of course, as I have said before, I believe that PMUA who were between 1MM and 2MM pre-12/31/2011 were disproportionately downgraded due to the accretive dilution of benefits that took place at all Premier levels, which is unfair and needs to be rectified in some rational economic manner.

Baze

I have not looked at last years financials. Are those "profits" real profits or just on paper profits due to write offs from the merger? Are they really making and hard cash profit? And if it is true hard cash profit then I really don't see them changing anything until those "profits start to decrease or go away. If real profits they have no incentive to please million milers or any one else for that matter.

Ukalien

Profits from last year, "on paper" or otherwise shouldn't influence the prudent management of the business this year. They should be looking at all kinds of metrics to see where their business is up, down or flat. They have the ability to see year over year, including seasonal variations, and being an airline, can measure advanced bookings as leading indicators. They obviously can segment their business to see patterns among flyer categories, and this is where, as high mileage flyers, we have to carry our economic message. If a lucrative slice of their business starts to diminish this might give them cause to consider what steps to take to reverse the trend.

Of equal concern seems to be the trend towards monetizing everything, both in direct terms and through the huge credit card push. This is a "we want your money now" philosophy, with the "ongoing relationship" idea out of the window. And we all know what happens when you make everybody special: no one is. I visualize next years credit card offering free use of the onboard bathrooms and no charge for the oxygen masks should they be required.

Customer satisfaction means nothing. Customer LOYALTY means EVERYTHING!

http://www.millionmilersunited.com/

Xyzzy

I keep reading this and getting annyed. Why? Because it's absurd. Without customer satisfaction, customers won't remain loyal.

Also, dn't forget -- many businesses find that their most frequent (you'd use the term 'loyal') customers are some of their least profitable customers.

UrbaneGent

You are absolutely, 100% correct. But don't give me (United, that is) Systemwide upgrades, tell me I'm #3 on the list with 5 open seats...and I sit there waiting when there's no way I'm going to the upgrade.

Don't market "LIFETIME" benefits to MMilers and then change the benefits after THIRTY YEARS - can you believe that?!? THIRTY YEARS? I still can't wrap my brain around that!

Don't put "automatic upgrade requested" on my itinerary as if I have any chance of being upgraded on my domestic flight.

In other words, don't lie to me, don't b.s. me with marketing hot air, and think we are all stupid.

The past couple of months, I must say, have been such an eye-opener for me. When Starwood stated I would be Platinum for life because I was Platinum for 10 years straight with 500 stays - where did my mind go? I didn't believe them. It's like I don't trust anyone anymore. I'm waiting for Starwood to come up with a Titanium tier or something.

United keeping people who actually flew 1MM at Premier Gold because we were told "LIFETIME" Premier Executive is so nasty. Those close to 2MM, like myself, had the lifetime RCC membership taken away.

I know everyone here understands - but I just keep asking myself, how does an airline, the airline I loved for over twenty years has changed so much. How can an executive like Monsieur Smisek be so slimey to his customers and then say on videos (paraphrasing) "Our word is the single most important thing" and do the EXACT OPPOSITE?!? So crazy!

UG

wilp888

And can you name one company that does not value highly their most frequent customers? Every company tries to make each customer a frequent customer. Whether they are profitable or not is entirely up to you as you are the one that sets the price of your products.

jetsetr

FWIW, I just cleared a transcon segment 72 hours out (flying non-hub to hub, but still, it's a transcon). The system does work (granted, not always as we would like), but my main issue is that there is lack of transparency surrounding inventory availability vis-a-vis CPU clearance and TODs.

Twenty years is a long time on both sides of the equation, from both the customer perspective, as well as the industry perspective. I was recently speaking with an industry analyst who's worked for several airlines, but is now more well known for his analytical insights and market forecasting. He said the main difference between then and now is that when FF programs first started, there was a lot more pressure to differentiate FF benefits, simply because more carriers existed. These days, there are three four US-based legacy carriers left standing, offering traditional FF programs that are for the most part still "mileage-based," which are competing against three main LCCs (WN, B6, VX) who offer FF programs that are more revenue-based. The playing field has thinned considerably, and as such, the competitive pressures are lessened, allowing all carriers to scale back benefits and disaggregate and unbundle "revenue triggers" like CR1s / RPUs in order to maximize revenue.

Again, that doesn't mean that those "caught in the crossfire," specifically legacy PMUA MMers who had not yet reached the 2MM mark as of 12/31/2011, are going to be particularly happy. This is why I believe it is so critical to rally some consensus amongst this specific group to identify or closely approximate the size of your population and come up with a set of benefits that you would like reinstated, and then come up with a reasonable, rational cost and revenue benefit analysis.

dgcpaphd

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Today, I noticed something that many or most of us missed when we read the January 26, 2012 - article that appeared in the Wall Street Journal concerning the demotions to the million-mile program.

For convenience in locating the article, here is a link to it:

http://blogs.wsj.com/middleseat/2012...equent-fliers/

Please notice, in the ninth paragraph, you will see the following quotation attributed to Mr. Foland:

“What United promised as a lifetime benefit, Mr. Foland said, was 50,000-mile gold-level status in the program, not particular benefits given to gold-level members. Program rules allow those benefits to change.”

I think that most of us, when we first read the article, did not notice that the above quoted statement attributed to Mr. Foland is false.

Contrary to what he told the WSJ reporter, there WERE “particular benefits” promised to us.

Specifically, there were two regional upgrades promised “at the end of every year.” This is a “particular benefit” as were the three System-Wide Upgrades given at achieving million-mile status. These “particular benefits” have been knowingly and intentionally breached by way of rescission, by the new UA management.

If and when the day arrives that Mr. Foland becomes required to answer to outsiders for the false and contradictory statements he is on record for making to a WSJ reporter and to others in connection with the breach of certain UA programs, I predict that he will not fare well.

Given the knowing and intentional breach of the million-mile program and the knowing and intentional breach of yet an unrelated UA “lifetime” program (that required a membership fee to join), it should be clear to the new UA management that it is in the best interests of UA to rectify the breach of those programs before these matters are no longer under the control of the new UA management.

Unless the new UA management corrects the above discussed matters without more delay, the new UA management should expect considerable embarrassment and problems it will surely encounter, if and when these matters escalate to a new level.

One easy and inexpensive method for UA to have these problems go away would be to compromise (over the prior false and misleading statements) and grandfather those million-mile members that reached the million-mile status prior to the merged frequent flyer programs.

While the above compromise would not make UA customers whole, it would be a compromise that would sufficiently assuage million-mile customers to a point that the new UA management would have reasonable assurance that outside intervention over the breached agreements will not be necessary. It will also minimize future defections of former abused loyal customers.

I am very much aware that the new UA management has a right to change the frequent flyer program.

However, the new UA management does not have a right to make false statements to the press, post false statements (advertisements) on united.com, knowingly and intentionally breach paid “lifetime” memberships and/or breach “lifetime” promises made to customers who relied on united.com and spent considerable sums of money with UA while falsely believing what was advertised in the FAQ section of united.com.
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jetsetr

Do you have any idea / reasonable estimate of what the size of this specific population is?

Edit: For argument's sake, would you find it reasonable to lump in PMCO legacy MMers for the sake of not creating two separate classes of legacy MMers?

Ukalien

Thanks for bringing that up. The problem with customer satisfaction is that today everybody and their brother claims they have it. It's literally the lowest common denominator. If you don't have customer satisfaction what does it say about you and your product? In any case customer satisfaction is really only meeting a modest expectation, as in "I expected it, I got it, therefore I'm satisfied". Hardly an endorsement of true delight.

And how do companies typically come up with those CustSat ratings for themselves? Through those lousy surveys that none of us like to do. United did them on the phone until March 3rd after every call to an agent.

If the function of a business is to attract and maintain customers what is it that would maintain a "non-loyal" customer? Satisfaction? Everybody claims to have that (in this case United, Delta, American etc.). Is it low price? If it is there's a perfect example of a "least profitable" customer type. People who shop for price are always available to the lowest bidder - no loyalty there.

So, while there are always exceptions to the rule, "loyal" customers actually deliver high value to the brand they believe in. By selecting the brand over others, by giving repeat business (in United's case going out of the way to book UA, even if it meant additional connections), By striving to reach mileage targets set by United, and by recommending the airline through Word of Mouth (WoM). This is where United had a true following, they felt they received more value from UA than from it's competitors, which meant they weren't going anywhere. And there are plenty of well respected studies in circulation that demonstrate direct linkage between customer retention and profitability.

And now you know why I say...

Customer satisfaction means nothing. Customer LOYALTY means EVERYTHING!

http://www.millionmilersunited.com/

dgcpaphd

Unfortunately, I do not have this information. If I did, I would calculate the expected exposure of UA for the costs of the maneuver to elevate the legacy million-milers.

The information is held with UA. It would be available upon a class action filing through discovery, after the action is filed.

Whatever the population is or the costs involved, it will be worth it to the new UA management because of the expected negative goodwill that will be created if the facts are exposed to the public and to various regulatory agencies.

Moreover, it is the only fair way to reward our long-term loyalty. Those of us who relied on what was posted over the years via united.com and most recently in the FAQs and answers that appeared on united.com expect more from the new UA management than false statements and breaching of "lifetime" promises.
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Fredd

Please notice also that his statement is contradicted by what UA Insider writes in this thread's very first post*.

"Here are the new lifetime benefits..."

" Lifetime premier benefits for 1 million miles = Premier Gold..."

"Million milers will be able to designate a spouse or significant other to always have the same premier tier as them [sic]..."

"This spousal benefit will replace the one-time and annual upgrade gifts..."

UA Insider makes it very clear that there were lifetime benefits (plural) that UA is now unilaterally changing.

This is the same airline and the same mileage program, yet UA seems committed to change, amend, "replace" and cancel previously promised lifetime benefits, and obviously believes it can do so with impunity.

*Whom to believe, One of them (it can't be both) or your own lying eyes?

dgcpaphd

You presented a very good find and an excellent analysis of the matter, Fredd.

Your presentation is one more element of verifiable contradictions made by the new UA management.

There is no longer any doubt that UA is currently being operated in a management style where integrity and honesty got trampled out of existence by so many false statements and denials. Credibility no longer resides within the merged UA.

The resultant damage to the formerly excellent reputation of UA, is now immeasurably damaged.

The new UA management can falsely deny all they want. Most of their denials and contradictions now remain a permanent record, thanks to the Internet. That record cannot be erased no matter how much the new UA would like it to be erased or called back and cancelled. Let us not forget-

"The Moving Finger writes; and, having writ,
Moves on: nor all thy Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all thy Tears wash out a Word of it."

The false statements and breached agreements will be revisited if and when this matter escalates to a new venue.
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bmvaughn

At what point does that happen? April? 2013?