Slightly OT: Business Case for Grand Slam?

Old Oct 5, 11, 8:49 am
  #1  
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Slightly OT: Business Case for Grand Slam?

Is anyone else curious about the business case for grand slam? It's obviously part of "Promotion" for the 4 P's of marketing, but in my lull between hits, I find my mind wandering:
  • What is it promoting?
  • What percentage of DM members participate? How many participants?
  • What's the projected number of participants who hit Tier 1 - Tier 10?
  • How many miles will be awarded?
  • What do customers plan on doing with those miles?
  • Does GS provide incentive to other retailers to become DM partners?
  • How does GS affect DM's relationship with other partners, i.e. does SS care about all those blue shuttles going back and forth to the Aloft in Phoenix, or does OM care about those boxes of lifesavers being delivered?
  • How does DM measure success of the promotion?
  • What does DM learn about consumers and consumer behavior in this promotion?
  • Why don't other carriers carry similar promotions?
  • Is the goal to educate customers on how to earn DM miles through partners, to generate buzz, to generate loyalty, or to make money?
  • How did DM get away with using the trademarked phrase Grand Slam anyway?

I just think it's a very interesting promotion. Some real marketing thought going on here.
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Old Oct 5, 11, 5:44 pm
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I don't know about you but my 4 boxes of cookies from Biscoff are long gone and I just found out the store a half a mile from me carries the Anna's cookies. Came back with a box of the ginger thins at lunch today. (I'll probably pay for my miles in cookies over the years lol)

Last edited by weaverjf; Oct 5, 11 at 6:01 pm
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Old Oct 5, 11, 6:16 pm
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I'm sure there are multiple reasons, but it seems to be rather successful. Look at how many people are talking about it on FT - there's an entire sub-forum dedicated to it, which makes people think about USairways (and in a seemingly good light). I can't tell you how many times I've pulled up the main landing page or the web app and have seen one of these threads as a recent post. Now if you go and tell your friends, or the rental car people, etc., that's a lot of word of mouth alluding to the fact that 'USairways is fun,' for a bonus that doesn't cost them a whole lot.
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Old Oct 5, 11, 6:24 pm
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Originally Posted by bangkokiscool View Post
[*]What is it promoting?
It's promoting US own currency. Just like the US government, US Air can print its own currency. As much as required without any issues.

Originally Posted by bangkokiscool View Post
[*]What percentage of DM members participate? How many participants?[*]What's the projected number of participants who hit Tier 1 - Tier 10?
I think only people who belong to flyertalk or similar community will participate. Lot of people i know don't even want to get a credit card and get free miles, forget about spending money to get miles for future travel.

Originally Posted by bangkokiscool View Post
[*]What do customers plan on doing with those miles?
whatever US decides to let them.

Originally Posted by bangkokiscool View Post
[*]Does GS provide incentive to other retailers to become DM partners?[*]How does GS affect DM's relationship with other partners, i.e. does SS care about all those blue shuttles going back and forth to the Aloft in Phoenix, or does OM care about those boxes of lifesavers being delivered?
In my opinion this is just another way of reselling US miles.

Even at 3 cents rate, 50 miles i get from a blue van leaves a 200% profit margin for them.

Teleflora & FTD are such ripoff, I can get much nicer flowers for 1/3 of the price elsewhere.

There are better trading platforms available for same cost than sharebuilder.

I can get domain for $10 per year from godaddy. $26 for 3 years for something i dont need is a very good deal for NS.

Skymall - i dont even want to talk about it.

Any business, if it offers a good value to the customer, they automatically use it again with or without miles.

Originally Posted by bangkokiscool View Post
[*]Why don't other carriers carry similar promotions?[*]Is the goal to educate customers on how to earn DM miles through partners, to generate buzz, to generate loyalty, or to make money?
I think mostly other carriers don't need additional cash or sell miles in different ways, having too much cash is another headache for airlines (labor contracts). Selling miles is like issuing stock. It's purely based on need.

Originally Posted by bangkokiscool View Post
[*]How did DM get away with using the trademarked phrase Grand Slam anyway?
Its generic phrase. As long as it is not used in the same business line against the business who has the trademark i don't think anyone cares.

Last edited by virtuo0; Oct 6, 11 at 9:58 am
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Old Oct 6, 11, 11:12 pm
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Originally Posted by HikerT View Post
The grand slam cannot be profitable to US but nobody seems too worried.
Why do you think GS is not profitable for US? All these partners have to pay US for every mile we earn from those partners. And I'd imagine those partners pay a fee to be part of the GS promo, too. And then most people who get the bonus miles from US use them on US metal anyway.
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Old Oct 6, 11, 11:36 pm
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Wink

Originally Posted by tommyleo View Post
most people who get the bonus miles from US use them on US metal anyway.

??
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Old Oct 6, 11, 11:38 pm
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Originally Posted by tommyleo View Post
Why do you think GS is not profitable for US? All these partners have to pay US for every mile we earn from those partners. And I'd imagine those partners pay a fee to be part of the GS promo, too. And then most people who get the bonus miles from US use them on US metal anyway.
I don't think it takes a brain surgeon to do the analysis. Same reason AMEX took it in the shorts for offering everyone 75-100K that called to get matched. Then again, I could be missing something and you might have the smarts to run the marketing for one of these companies.
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Old Oct 7, 11, 12:40 am
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Originally Posted by bryanwallace View Post
??
I said "most" -- not "all"...
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Old Oct 7, 11, 12:41 am
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Originally Posted by HikerT View Post
I don't think it takes a brain surgeon to do the analysis. Same reason AMEX took it in the shorts for offering everyone 75-100K that called to get matched. Then again, I could be missing something and you might have the smarts to run the marketing for one of these companies.
This is at least the third year that US has offered the Grand Slam promo. There must be some value to US to continue the promo, or else they would not continue it.
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Old Oct 7, 11, 9:46 am
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And how many years has Sharebuilder continually offered a $50+ bonus for signing up for an account? I can assure you they've been doing it a lot longer than US has been doing the GS.
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Old Dec 12, 11, 8:47 pm
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As I see it (totally speculating) the following are the marketing justifications for the GS:
  1. Selling miles to "Partners" is a very profitable business for airlines (AC's Aeroplan is a case in point, it is a separate business from AC that seems to make a profit only selling miles). Therefore by giving DM members an added incentive to learn how to maximize mile earnings from partners US is likely to sell a lot more to partners (I certainly learned a lot of tricks to earn more miles that I will continue to use now that GS is over)
  2. Continuing from the prior point, promoting their partners will encourage companies to sign up as partners.
  3. It is frequently not efficient to have big chunks of miles with different programs, so once people get big GS bonuses they are likely to start crediting all their *A flight to US (and they make money on those miles as well, I assume)
  4. Once people start crediting all their *A miles to US, they are likely to start (or continue) actually flying US, all else being equal, it always makes the most sense to fly an airline that you have elite status with
  5. It makes a lot of noise and reminds people that US is a *A partner and therefore a serious consideration as a choice of a primary airline
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Old Dec 13, 11, 5:15 pm
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I just don't get it either. I agree with those who say there must be something in it for US, but it doesn't make a whole lot of sense to me.

I earned 100k bonus miles by doing partner activity that earned me about 16,000 miles. So, for all of my activity, the partners I used paid for a total of 16,000 miles, or about $300 to $400. Even accepting that US can print as many miles as it likes, those miles are a liability to US, and I would think they would go broke very quickly selling miles at the rate of 116,000 miles for $400.

While I accept that those who post here do much better than the average person at this promo, with the proliferation of blogs and stuff, I would think that the number of miles that partners actually had to buy is a very small fraction of the total miles US gave away.

I think people tend to think in terms of what they spent for the partner activity, but US isn't getting anything close to that amount of money. For an officemax hit for which US gives upwards of 5,000 miles depending on how many hits you have, officemax need only buy as few as 2 miles from USAirways for about a nickle. Even if you do an extravagant hit, like spending $1,000 at Marriott and crediting it to miles, Marriott only needs to buy 2,000 miles from US, which is not that pricey.
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