After our flight in Q-Suites and the Doha Transit Tour, we boarded our flight to Male in business class aboard a Qatar Airways 777-300ER (review coming Thursday).
I began going through my process of taking pictures of the seat and getting settled in. At that point, a flight attendant came by and asked me about my breakfast offering.
Then, the purser comes up to me (and me alone) and does something I’ve never had happen before:
She thanked me for being a Oneworld elite member. I was thanked for being an American Airlines elite while flying Qatar Airways.
When she said that to me, I actually went into a little bit of a shock. I had never been thanked for being an elite member while flying American Airlines. I hold Platinum elite status due to a combination of flying and using the American Airlines portal. This isn’t even close to being top tier status.
After she walked away, it got me thinking: Why does this even matter?
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How Do Airlines Think of Elite Status?
At it’s core, US airlines are accountable to the shareholders. I’m not going to get into the debate on whether that’s the best model of business to do, but it’s the reality of the current airline landscape.
How does this relate to elite status? Airlines want to encourage behaviors in a manner that gives them the greatest bottom line possible.
There are a variety of factors that play into this. Who is buying the most tickets? Who is actually buying airline tickets that are the most profitable (typically businesses and high net-worth individuals)? What are the behaviors associated with those individuals?
They then want to reward those individuals with status to keep them on the “hamster-wheel” of status. Keep them coming back so that they partake in these profitable behaviors as long as possible.
Why US Airlines Think About Elite Status Wrong
It is of my opinion (and I have no insider information to confirm this) that airlines have segmented their data so much that they are leaving a lot of value on the table by oversegmenting their customers.
What does it mean to oversegment your customers? The goal of segmentation is to build a rough model of the world so that people generally fall into buckets of certain characteristics in a way that predicts behavior. For a non-airlines related example, in US politics, if you are white, you are statistically much more likely to vote Republican than if you are black.
Airlines typically do the same things. They look for segments of the flying population and try and bucket them into segments of profitability. They then construct elite status levels that puts those most profitable individuals within those buckets and develop ways for people to get up to the next status level and, by default, generate more income for the airlines.
However, does simply segmenting people into profitability buckets cause people to develop loyalty to a brand? What is brand loyalty really about?
A Tale of Two Customers
Consider this: there are two individuals. One flies across the country every month roundtrip in first class between New York and LA. They don’t pay for their own ticket, as they fly for business, and they are required, by rules, to fly for American Airlines. They naturally get top tier status.
There is a second individual: your middle manager who flies biweekly in economy. This individual doesn’t fly very expensive routes, so they don’t technically spend a lot on flights, even though they fly often. They also have the American Airlines credit card – they can’t spend much (maybe $25k per year on their credit card), but they pull out that credit card for every purchase. They get Platinum status, but just barely.
Who is the more loyal customer? Is it the individual who has to fly American Airlines, but does not engage with the company at all (providing a lot of money in airfare) or the middle manager who tries to put every dollar they spend associated with American Airlines? The second one!
The problem is that US airlines don’t really do anything that actually rewards loyalty beyond their stated terms and conditions: spend X amount, get Y benefits.
How Should US Airlines Treat Elites?
I think that my example makes it pretty self-evident. How are people engaging with the loyalty program overall? I think American Airlines actually does a pretty good job considering that credit card and partner spending counts.
However, I do think that there is something missing: the actual inflight experience. In my mind, Qatar Airways gets it. Qatar Airways recognized that I was an elite member, even though it was with another airline within the alliance! They recognized that I was at least likely flying Qatar Airways because of my affinity for Qatar’s partner. They’re not wrong!
What I think US airlines fundamentally misunderstand is that simple, no-cost ways of doing business creates greater brand affinity for their own brands. I don’t expect to be thanked for my loyalty while I’m sitting in economy,. However, when I am occasionally upgraded to a premium cabin, a thank you for my loyalty would go a long way!
A great comparison would be my affinity for Hyatt. I love Hyatt hotels. One reason that I love it so much is that, almost every time that I check into a hotel, I am thanked for my loyalty. That means a lot! They don’t have to go above and beyond and provide a bottle of champagne in every room I stay in. A simple thank you, recognizing that I am a repeat customer, truly make me feel valued for putting my hard-earned dollars towards that specific brand.
I don’t know what can make that happen. For me, instructing check-in agents (when I’m checking a bag, which isn’t too often) and flight attendants (good luck with that) to thank me for being loyal is the right move.
Conclusion
I get that this is more thought exercise than actually useful to most of my readers. I totally get that. Thank you for taking the time to read this post.
However, I do wish that US airlines would actually try to think about how no-cost ways to engender loyalty actually does help the bottom line overall.
What do you think about loyalty in US airlines? Do you think they should be requiring flight attendants to actually help take care of the brand?
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