I’m what the airline industry would call a leisure traveler. I buy my airline tickets at least 21 days in advance to get the best deal. I’m also a native Californian residing in Houston so I would always see a nice jump in my frequent flyer miles when I went back home to visit. Still, I haven’t accumulated enough miles to go anywhere! This week Delta Airlines announced that beginning January 1, 2015, it would change how frequent flyer miles are accrued. Rewards are no long distance-based but rather fee-based meaning that the more you spend on your ticket is what earns you the most miles. Leisure travelers like me may not be too thrilled but those who fly business class or first class are rejoicing. This move is all about taking care of your best customers and as a business owner I completely understand.
It makes perfect sense.
According to a recent article on this change, elite flyers weren’t feeling too elite. Travelers who weren’t spending nearly as much as business class and first class travelers were reaping the same reward. One of the reasons small business owners spend hundreds and even thousands of dollars on CRM is so we can identify our best customers. We want to take care of brand loyalist who have high customer lifetime value (CLV). The move by Delta that will more than likely be adopted by United and American will reduce the number of travelers in their elite program and thus reflect truly elite flyers; those spending the most money with those companies.
Is it fair?
Some travelers may argue it’s not fair but reward programs are built so that you can take care of your best customers. The more you buy at Krogers, the more cents off per gallon you earn. One month I racked up .40 cent off per gallon! My grocery budget took a serious hit that month but gas was also creeping up to four bucks a gallon. When you have to fill up a truck, .40 cents off is like winning the lottery.
The more I spend at Walgreen’s, the more points I earn and I can use those points as cash. Reward programs are incentive programs and the more you spend, the more rewards you earn. Delta is making a much needed adjustment to their program.
What are you giving your best customers?
First, do you know who your best customers are? A good CRM will help you identify them. The customers who exhibit brand loyalty and have high CLV are worthy of your best rewards or offering. These are the people who help keep you in business. Your staff who takes extremely good care of these customers are another reason and deserve recognition as well. Take great care of all your customers and your employees but when clients and employees go above and beyond and display unparalleled brand loyalty, for those you want to do something a little extra.