Tuesday, January 29, 2013

Shame on you Delta Airlines

Delta Grade for
Customer Relationship Management
Today I read an article on ABC News about Delta changing their frequent flyer policy.  It is entitled:

Changes to Frequent Flier Programs Could Mean the End of 'Mileage Runs'

Uh, no..... but it could end the run of loyalty on Delta Airlines.

I have long been a fan of Delta and at one point was even Platinum.  All things being equal (aka not having to go through Atlanta), I would still choose Delta, but this latest move ruffled my feathers.

I remember aspiring to that rank before I realized that it equates to never seeing my family due to being on the road.  The notion that people do "mileage runs" for fun is truly offensive to those of us that have logged nearly a million miles in our careers.

In 1997, after a long time trying to have a baby, I finally conceived my daughter Kiera.  We had spent a boatload on specialists and so when I found out that I was pregnant, I stopped traveling, just to be safe.

Hear me out.  I didn't stop traveling on Delta.  I stopped traveling period.  By the end of the year, with absolutely no communication with me, they knocked me down to Gold status.

Shortly thereafter, we moved from Atlanta to Tampa.  At first I thought it would work out well, as there are so many Platinum and Gold Medallion members in Delta's home base of Atlanta, I thought that being Gold in Tampa would surely be to my advantage in a smaller market.  Wrong.

Nevertheless, since I am a consultant, I kept flying and since my firm was the general contractor, building, I racked up a lot of miles that year and quickly regained my platinum status.  Whew.

Wrong again.  In 2003, after failing at conceiving a second child, we adopted a 3 year old boy from Russia.   Once we brought him home in March, I agreed to curtail my travel and stay home to get Sergey adjusted to the US and his new life.

January 2004, renewal packet comes in and I have been busted down not to Gold, but to Silver.  Ouch.  In Tampa, that doesn't even get you a center seat in coach as an upgrade....

I quickly got on the phone with rival Continental and asked if they wanted my business.  I sent them my previous year DL statement which showed my Platinum level travel and they happily made me Platinum on Continental.

So why the ancient history?

It is so easy to treat your customers right if you just talk to them.  

If after hundreds of thousands of miles flown on your airline, you suddenly see the miles drop to zero (or minimal activity), you should be on the phone asking if you did something wrong to make the person switch, or if their is an illness or extenuating circumstance (birth of a child, adoption, etc.).

And after spending over $100 million on their new website, it is unconscionable that Delta should make a policy change that will only hurt its best and most loyal customers.

The website by the way, while beautiful, should NEVER have cost that much - and when I heard about it I quipped about building it for $80 million.

Customer Relationship Management 101 - Talk to your customers and when you need to raise profitability, don't ding your best customers to do it.  It is bad form and it is bad business.

To read the whole ABC article by Rick Seaney of click HERE.

Monday, January 28, 2013

The Zombies vs the Dinosaurs: The Battle of the Century?

Zombie image courtesy of Farelogix (airplane made out of dollar bill and dinosaur courtesy of Solutionz Media)

Thanks to Jim Davidson of Farelogix for the fodder for my blog today.  It had been a little while since I'd taken time to write and I so love new inspiration!

The Global Distribution System companies (aka GDS - Amadeus, Sabre and Travelport's Apollo, Galileo and Worldspan) have long been dubbed as dinosaurs.  In a recent article by Jay Campbell of the Beat, Airline Direct Connect (provided by Farelogix and others) has a new moniker - the Walking Dead (aka Zombies).

[the Beat is a subscription only newsletter, but worth the money if only for the spirited banter that is sure to emerge between Jay and Jim over this article]

The fact of the matter, as Jim so aptly brought out in his tome is that this is a very complex matter.    Indeed!

While technology plays a central role in this argument, from where I sit, it is really about business models, ecosystems, litigation and yes, even egos (gasp).

The bottom line is that this is indeed a battle of the century, as there is an enormous investment at stake.

At this juncture, more than 34 years of R&D and marketing spending has been poured into the GDS, which if you count the Private Equity investment, now numbers in billions of dollars.   And of course, let us not forget that the foundational investment was made by the very companies that are now challenging the status quo (the airline founders of the GDS).

Sandler Capital, the Private Equity firm that holds a majority share in Farelogix has certainly invested tens of millions, if not nearing a hundred million in the Direct Connect solution used by a wide number of airlines, including American.    

Interestingly enough, in American Capitalism, there is no birthright to either completely changing an ecosystem with a new invention, nor is their a birthright to preserving the status quo.

As the various players in this tableaux have found, all they can do is either go on the offensive, or remain on the defensive in the attack on the status quo.

He who has the most stamina (or perhaps the most attorneys and the biggest war chest) wins.

Clearly the war rages on.   Who are you betting on?

Stay tuned.

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