10 Things We Learned From LatinPass

10 Things We Learned From LatinPass

Even for frequent flyers, for whom the extraordinary has become ordinary, last year’s 1,000,000-mile bonus promotion sponsored by LatinPass was unusually strange. First announced in early 2000, the promotion might have gone relatively unnoticed if not for the attention it received in this magazine and the feeding frenzy that it created in the FlyerTalk community. Now that the smoke has cleared, we can look back and see that this was a bonus promotion like none before it. This was a bonus to be remembered — and studied.

But was it a bonus to cherish? That probably depends on how much you enjoyed flying non-stop for days on end, sleeping on airport floors and visiting a seemingly endless array of Latin and South American cities and countries — if only for a few minutes.

Not that it was all bad, of course. Many of those who participated in the promotion met each other during their travels, and greeted one another like fraternity brothers on spring break (surely some of the oddest images to come down the frequent flyer pike in many a year). And the members who were finally able to get and use their LatinPass awards were elated. The truth of it is, if LatinPass were to bring this promotion back, most of us would welcome it with open arms.

Still, there’s room, and hope, for improvement. The promotion ended in June of last year and, at the time, LatinPass informed members that it may take up to a year for the miles and credits to show up on their records. This month marks one full year, and the number of members who are still at odds with the changes to the program are in the majority. To say that the promotion could have been handled more efficiently would be an understatement of epic proportions. But there’s always a chance LatinPass will learn something from its mistakes — though, to tell the truth, most often what is learned is how to repeat them, which is why some of the same complaints arise again and again.

So, as they are counting down to that last day of potential liability from the promotion, there are a few lingering lessons to keep in mind — for them and for us:

  1. Improvements made LatinPass worse
    From the start, the 1,000,000-mile promotion was impressive, and it quickly grew into a discussion-dominating phenomenon. But after the post-promotion program changes were instituted, the luster began to wear off. Part of the drop-off was just bad luck. The most compelling ways to use the miles earned from this promotion got booted, and the ongoing changes became predictable. But a large part of the problem stems from the LatinPass point-of-view that, while the publicity was terrific, they were unprepared for the liability.

    Members who called the LatinPass service center to check on their earnings were told that the promotion was intended for loyal members only, and those who joined only for the bonus miles would have to wait until LatinPass was ready to post their miles. That is not what many wanted to hear. The member’s post-promotion disillusionment increased when the LatinPass owners tried to stretch the liability by putting the onus of validating the flights, stays and car rentals on the members themselves. The promotion diluted the “everyday flyer” quality that had made the LatinPass program seem more innocent and accessible. We expected LatinPass to make good on all the miles that were earned from this promotion — we just didn’t expect them to be so cheesy about doing it.

  2. 1,000,000 miles is a limited concept
    Thanks to the success of the promotion, and despite the frustration that members are having with LatinPass, we’ll be getting more bonus offers like this one. For proof, one only has to look at Northwest and American, who have both run similar bonus promotions for their partners — though not in the same league as 1,000,000 miles. And, if the economy continues to sputter and airline traffic falls off, partner bonuses will be virtually inescapable.

    But look closely at these contests and you begin to uncover some flaws. Interestingly, many of the members who participate in these types of promotions aren’t really the airline’s best customers. They are often the ones who use the Internet to learn how to earn the bonuses at little or no expense. Add to this the fact that these types of bonuses usually require a substantial investment of time and effort — which many frequent flyers are increasingly reluctant to make — and you see why their value is limited.

    The Northwest partner bonus went well, but not as well as they might have expected given the publicity. The current AAdvantage 20-partner bonus promotion is limping along under the radar. And Delta’s multiple million-mile giveaway is a frequent flop, since it requires only luck to win. If the frequent flyer programs think these partner bonuses can replace all their mileage offers and make them member-proof, they’re going to be struck by a nasty surprise.

  3. Don’t fly a gift horse in the mouth
    Bonuses can fail for a number of reasons. Some fail because they offer the wrong incentive. Success escapes others because they feature a partner which isn’t ready for prime time (until they prove otherwise, we’ll assume Fiesta Americana falls into this category). And who can forget Legend Airlines, an organization which took to bonuses like a duck to hot oil?

    But when it comes to failing programs, the one to study is LatinPass. Rarely has a pileup been so brutal — yet so avoidable. You’d think LatinPass could have foreseen how fragile this bonus might be, especially given that 1,000,000 miles always attracts its share of media and member attention. Flying a handful of partner airlines isn’t out of the realm of a typical frequent flyer’s itinerary, let alone a few car rentals and hotel stays. And how could they neglect to automate their system for tracking and managing the miles and transactions of multiple partners?

    There’s no reason a successful program couldn’t have been shaped around a star bonus offering with the member base of all the participating programs. But no one involved seemed to have put any thought into how to make the bonus work, or even seemed all that interested in trying.

  4. Keep some things to yourself
    When a bonus as rich and potentially rewarding as LatinPass comes along, it’s our job to tell you about it. But, guess what, just because you have a bonus secret doesn’t mean you have to share it. Upon learning of a spectacular bonus opportunity, many of us are inclined to share our most clever thoughts on how to earn miles and fly free. Please, should you discover some multi-partner, million-mile bonanza, don’t tell us how we can fly 10,000 miles for only $750 (and that’s in business class), or clue us in on the best place to sleep for two hours in Lima, Peru in-transit, or what you are going to do with the miles. When your mother told you “silence is golden,” she didn’t mean that you should bring it out only on special occasions. Of course we’re joshing you a little here, since we started it all. But, as many members have learned, the Internet is a great source of information, but it also can turn you secrets into a stampede.

  5. Keep complaining about others
    Thanks to some outraged protests, gains were made to keep LatinPass a viable award outlet for all members of the program — even those who came in only for the mileage buffet. But progress has been slow, and if the past is any guide, progress will almost certainly stop the moment we stop focusing on the issue. Why does it matter? Consider the fact that, while some of the estimated 800 members who qualified for the 1,000,000 bonus and the hundreds of others who likewise earned a 500,000-mile bonus have been able to use some of their awards, there remains hundreds of millions of miles still to be used. And, with changing alliances, the times aren’t looking too good. All we can do is hope — and keep complaining.

  6. LatinPass is a poor example
    But it’s a great whipping boy. After LatinPass, the industry is once again under attack for problems related to its ability to offer a consumer-friendly program and its legislation. Never mind that the airlines that serve most of the awards for LatinPass aren’t residing in the United States. To some, the syllogism is simple: The LatinPass program operates as a U.S.-based program, so it should be subject to the same rules and regulations as other programs as monitored by the DOT and the new CustomersFirst initiative.

    The problem with that argument is, there’s no way to frame it so it applies only to LatinPass. Almost any program has international airlines and other partners who provide value to members and yet aren’t subject to the same general consumer protection guidelines as others? At least with the British Airways program — as opposed to, say, the LatinPass program — frequent flyers are made aware that American Airlines is its major partner, not soon-to-be-historical TWA.

  7. These frequent flyer programs have no sense of humor
    For years, frequent flyer program executives have said that the popularity of miles as a “new currency” makes these programs an effective retention tool. But, as the airlines continue to lure frequent flyers from other programs by “honoring their elite” status or through giant LatinPass-like promotions, they have weakened their own ability to retain their best customers.

    And now the programs appear to be shooting themselves in the foot again. If you want an example of frequent flyer incompetence, look at any program that limits the route system to use of upgrades (members often earn their upgrades on long-haul international flights and are then forced to use the privileges on short-haul domestic flights). Or, how about the programs that say your elite benefits only come into play when you are a paying passenger (wouldn’t it be nice if, when on a free award, you are still recognized as a valuable member of that airline’s frequent flyer program). If it wasn’t so frustrating, it would be funny. But it’s not funny, and these types of decisions prove that many programs have no sense of humor.

  8. Frequent flyers are not ready for reality
    Because so many frequent flyers rush to the Internet for news of the many ways to beat any promotion, some are saying frequent flyer programs have become “chat savvy.” No, like too many frequent flyers, they’ve just become rule addicts. Were they chat savvy, they’d realize that using the Internet to manage their rules and restrictions only makes them look worse, and they’d be more careful to avoid giving that impression. They might also be more careful about some of the changes they so freely make, because they’d be worried about lawsuits. But they’re not worried, which is why frequent flyers are not ready for reality.

  9. Rules have been changed to death
    There is an odd, but all-to-familiar formula at work in the frequent flyer program industry: Any promotion that exceeds expectations is pared back. And whenever it happens, it serves to highlight the inability of the program’s marketing department to accurately monitor and predict the success of a promotion.

    We’ve seen award charts and benefits for all frequent flyer programs altered because programs could not keep up with the success of the program. Whether it’s SWU’s from the Delta SkyMiles program or raising the airline lounge application fees because alliances are allowing in far too many members for the clubrooms to manage, it’s always the same. Shortly after the LatinPass promotion ended, we saw limits on transfers (Marriott and Hilton most noticeably), changes in award use for miles earned as bonuses vs. miles earned as flight miles, new rules on documentation which were put into place to slow down the accumulation of liability and discourage many members from properly earning the miles they were entitled to, implementation of a ridiculous system for booking partner flights and much more.

    There’s a lesson to be learned from this — for both the programs and frequent flyers. For the programs, the lesson is: Rules should not be changed due to the shortsightedness of those running the program. And the lesson for frequent flyers: It is probably safe to assume that the programs will ignore their lesson.

  10. Frequent flyers strike back
    This lesson is a provisional one, based on threatened legal action by members of the LatinPass program. There’s reason to be cautiously optimistic, if only because everyone involved has repeatedly acknowledged how much they enjoyed the LatinPass airlines (Copa and AeroPeru aren’t household names for most U.S.-based frequent flyers), despite the growing frustration with actually claiming and using their awards. Still, you never want to underestimate people’s capacity for acting against their own best interests. So just in case, here’s the last lesson:

    Take away rich bonuses from a little-known frequent flyer program alliance and people will find other programs to earn their miles with (though likely not at 500,000 and 1,000,000 miles a pop).

If the folks at LatinPass have learned nothing else, let’s hope they’ve learned that.

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