pinniped

36 hits, 152,253 total miles, $698.54 total outlay, .46 CPM

- I scored all six hotel stays as zero cost. Five were Marriotts that yielded about 2,200 miles per stay. The sixth was a crappy Rodeway Inn in the middle of nowhere. I think it was the only hotel option I had. In theory, I could score the Marriotts as negative cost since 2,200 miles plus 500 Marriott points is worth more than the 2,000 Marriott points I would have otherwise received. But that's splitting hairs...besides, at a couple of them I had to go order a beer and an appetizer to make sure my final bill was $100. (Oh, the troubles we go through for miles! )

- I scored rental cars as $25 cost each. That's about what 1/5th of a National Free Day is worth to me.

- I scored the three flower purchases as $30 each. That's about the difference between their cost and the normal street value of the flowers.

- I scored my own SPG hit as $19. I scored other hotel hits where I traded 850 SPG points as $35 each. I scored my own IHG hit as $70 - that was my 36th planned hit and all the reinforcement I needed to not go for 40.

- I scored Trial Gold as $100. I'm flying international in December, I genuinely need the trial to secure a 2012 *A status, and will enjoy the benefits of Gold during the trial such as domestic upgrades and international lounges. I simply estimate the total benefits I'll get at a little lower than $430...hence I'm allocating some of the cost to the hit. If I go 4 for 4 on domestic upgrades, maybe I'll revisit this and change it to $0.

- After consuming two of the Wine Insiders wines, I scored that hit at $0. The zin and the chard are both pretty good as $8 everyday drinkin' wines go... In fact, I'd consider buying another $90 case from them in the future.

hail2osiris

Earned Bonus
100,000

Earned Bonus - PQM
10,000

Total Bonus
110,000

Non-Bonus
25,206

Grand Total
135,206

$ Outlay
$788.83

Cost Per Mile
0.005834283

hail2osiris

Earned Bonus
100,000

Earned Bonus - PQM
10,000

Total Bonus
110,000

Non-Bonus
25,206

Grand Total
135,206

$ Outlay
$788.83

Cost Per Mile
0.005834283

pinniped

I probably could have gotten into the 16-20 hit range at close to zero incremental outlay.

I decided to go to 36, knowing that the planned hits in the high 20's and low 30's began to entail some sort of cash or other points cost.

I think of the IHG transfer hit ($70 net cost in terms of hotel award power) as my 36th hit. Didn't do them in that order, but in terms of planning it was this hit that made me realize that #37 and beyond would cost too much to warrant the pursuit.

Looking at my spreadsheet, adding #33 through #36 together, I was spending close to a penny per mile.

lkar

I think the true cost is even a bit more complicated than that. But for the promo, what would you have chosen as your earning preference for your $200 IC stay? If your answer is that you would have collected US miles anyway, then I agree it's close to a free hit. If you would have instead earned 2,000 PC points, then this hit had a cost -- the cost was the difference between how you value 2000 PC points and 500 miles. Or maybe you would have earned AA miles instead, which you value higher than US miles, and so there's an incremental cost there too. Or maybe you would have stayed at Hilton instead and pursuant to a Q4 promo earned 4,000 points, etc.

I think this can be seen more clearly with Marriott, for example, where you only get 2 miles per $1, but can get upwards of 17 points per dollar for using your marriott visa. If I had a business stay at a Marriott for $200, I would ordinarily choose the 3400 Marriott points, which I value highly. If I instead take 400 US miles, there has been a cost to me, even though there was no out of pocket cost.

Same principle with a car rental on business. It seems free. But the questions to me is what would I have earned but for the promo. If I passed on a 1,000 UA mile Hertz bonus to get 100 US miles instead, this hit had a cost, etc.

I think you sort of have to do that with the other vendors too. If you have a unique e-mail and address and credit card that will work with netflix to get a bonus, you have a wide variety of bonuses that you might be eligible for. Is there one that you value more highly than the one you grabbed to do this promo? How about erewards? Is the $25 spent on US miles really what you would have done with that $25? At some point, these questions hit the level of silly, but if you're truly interested in assessing the real cost of the miles you earned, you need to at least do a bit of this, IMO.

andyfarrimond

This is somewhat inaccurate, since I also had the cost of the points I used to swap from the various hotel programs (although most of them were orphan points anyway)

Earned Bonus
95,000

Earned Bonus - PQM
5,000

Total Bonus
100,000

Non-Bonus
25,002

Grand Total
125,002

$ Outlay
$257.00

CPM
0.002055967

MDtR-Chicago

Your excellent analysis got me thinking - what would be the theoretical minimum to spend?

You really have to account for, among other things:

• The actual money you spent, if you wouldn't have done the activity without GS
• The additional money you spent on something you would have purchased anyway, if you bought in a different way because of GS
• The lost value of miles/cashback you would have earned without GS
• The value of miles you got back independent of GS bonuses

If I follow those rules and make a few assumptions (would not have bought any of it otherwise, a US mile is worth 1 cent, no sales tax, etc.), I get these minimums for each hit level:

[...]

For those just starting, you can still do most of those hits. The next least expensive are Biscoff ($13.34) and TrackItBack ($19.94).

pinniped

Probably too late to start either e-miles or e-rewards from scratch. Don't know about Thanks Again...that one might be possible if they post Activity Date correctly.

If you go down the Vinesse road, might as well do Wine Insiders. Several FTers, including me, felt like the sampler case was drinkable enough to consider it a "free" hit. The catch is that you obviously need to be in or near a state where they can mail wine.

Sharebuilder might still work too. The cost for that one is about 10 minutes and giving up the kind of information needed to open a brokerage account. I figure ING already has that data about me, so I was willing to trade 10 minutes for 2,500 miles and 1 hit. Again, I'm just assuming they'd post the account open date as the activity date. I did all of this in Sept-Oct so I didn't pay close attention.

You could probably squeeze in another rental car or two but that requires a time cost unless you're already planning on getting a rental car.

drbobguy

It's always fun doing these calculations, but there's really no "right" answer. Time means different things to different people. For some emiles/erewards is free because they would be spending tuesday night sitting at their computer anyways. For others it's a hassle to deal with all these surveys.

As for me 36 hits ended up costing me about 38 cpm, or something like $380. I had six hotel stays that I'm not including in that total, although I also had four car rentals which are included in that $380.

I did one hotel transfer (free). The rest were purchases or other activities like emiles/erewards.

All in all I can't complain. About 115,000 miles for $380 and that includes getting a bunch of stuff (flowers, biscoff, etc.) in the process. A very good deal considering I have lots of free time. For me buying 100k US miles for $1500 (during the 100% promo) was not at all a good deal, since I have never paid for a business class ticket. But for $380, I'm game.

No matter how you add things up I think we all still come to the conclusion that Grand Slam is an extremely lucrative promotion. Whereas some other promos are more like incentives to do things you might already have done, Grand Slam represents an amazing value even if you don't use/need any of the items you purchase.

It's a wonder US keeps repeating this.

pinniped

I just don't think you'd get the necessary e-miles/e-rewards credit generated in 3 days to get 500 mile redemptions submitted with a Nov 14 activity date. I mean, I know there are ways to buy things that earn a bulk of e-miles at once but I'm not sure it would all happen and post fast enough.

I think it's quite good for them. Airlines selling miles to partners is a nice fat high-margin business. So US stepping in to throw us some bonuses for using a bunch of partners isn't a bad thing for them. I will finish GS with 152,000-ish miles, 100,000 of which are GS bonuses. US probably made a nice profit off of the 52k they sold. Partners, in turn, are happy to get something - my personal information plus a sale, plus maybe some future business. (I might actually buy another case from Wine Insiders at some point. )

I even did two things that US Airways *really* loves: I bought a trial preferred, meaning I'm now actually buying airline tickets from them when I probably wouldn't have considered it at all without the GS. And I bought miles directly from them at just under 1.5cpm, another massively high margin sale for them.

drbobguy

Good post! I would love to understand the economics of this better. Do all partners buy miles at about the same price? I think the current understanding ist hat the banks pay something like 1.0 cpm for miles from the majors, I wonder what the partners are paying?

Keep in mind the partners are paying for those miles, but US is giving us those 100k miles for "free" subsidized by what the partners are paying for their miles. Still that's like $1000 (or more, depending on how you value them) for $400 in purchases, which is a big subsidy. Also I would love to see a graph of how much revenue the partners are making from people crediting US miles during Grand Slam versus during the rest of the year.

lkar

I dunno, it still seems like rough economics for US unless there are features of their partner contracts that we don't know about, like tiers or bonuses.

I got about 28k bonus miles to earn my 100k. Even if US sells miles to partners for the price AA does -- 2.2 cents -- that's only about $600 of revenue. It could sell 128k miles directly to customers for $600 all day long. Probably twice that.

MDtR-Chicago

Perhaps there are two more factors to add in to this:

1) Outside of FT, people tend to be pretty bad at making promotions work for them. I suspect the average spend for most participants is significantly higher to earn the points.

2) There's definitely the appeal of convincing high-income travelers to try your stores and hotel/car brands. How many of us would actually order from 1-800-Flowers? Or stay (heh) at a Wyndham hotel? And I'm betting some of us will use those brands again... I'm certainly considering ordering Biscoff again. Maybe even OfficeMax - their delivery method is great.

Gamecock

OK, let me see,

118,162 miles for $2057.
Minus business expense hits: $1158.88

But if I control for the things I needed to do anyway:
2 hotel stays
3 rental cars
flowers to people that I send flowers to every year anyway
Changing to a cheaper netflix plan
Using a thanks again diner coupon for a meal we were going out for anyway, so that saved me money...

and

Count only the hits I had no need for:
Track it back
2 car rentals
1 hotel
a poetry reading
some miles
AA stock
etc.

My adjusted out of pocket cost is $247.15 for at a rate of 0.00209cpm.

Thanks to all the folks who made this possible! FTers are the best!^

kyunbit

leisure traveler paying for everything out of my own pocket.

Will net 117K for a total cost of $452 out of pocket ~0.39cpm.