The past couple of years have witnessed dramatic changes in the airline industry in general, and frequent-flyer programs in particular. Most of these changes have been perceived by members as a devaluation of benefits, and a large percentage of members are reconsidering their loyalty — the very loyalty that these programs were designed to instill.
In a recent survey conducted by WebFlyer.com, nearly three-quarters of frequent-flyer program members expressed that the benefits offered by their favorite program have become worse this year, and 35.1 percent say they have already switched their frequent flyer program loyalty in 2003 or are planning to do so. These are alarming statistics and support the notion that programs are suffering a severe crisis of public confidence.
But what about the 64.9 percent of members who evidently feel their program is becoming worse, but are staying the course anyway? Who are these people and what would motivate them to remain loyal to a program that they themselves acknowledge to be crumbling beneath their feet?
A few years ago, one of America’s foremost trend experts, Faith Popcorn, identified something she referred to as growing consumer “militancy.” Though Popcorn’s prediction wasn’t directly associated with any particular industry, she foresaw an environment where consumers would begin to organize and, in the process, impart a greater influence on the way companies were managed.
In fact, this idea doesn’t seem to be new. In his 1982 book, Megatrends, John Naisbitt noted that “Consumerism is the economic expression of the American Revolution.” Naisbitt argued that consumerism is deeply rooted in American history and he predicted that it would increase during the 1980’s with the distinct possibility that it would become extremely militant late in the decade. And as far back as 1977, Lou Harris conducted a study, “Consumerism at the Crossroads,” wherein he estimated that companies had approximately 10 years, perhaps less, to begin including consumers in the corporate decision-making process — or face a virulent new strain of militant consumer action.
Now, more than 25 years after Harris conducted his study, consumer militancy appears to have become a reality in the world of frequent-flyer programs. Within just the past three years, no less than four major North American airline programs have been opposed by organized consumer groups whose aim has been to encourage the reversal of changes made to the programs. Continental members tried to “Deny Continental the Freddie,” US Airways saw some of its Dividend Miles members start a “Cockroach” campaign, Air Canada Aeroplan was faced with “Errorplan,” and now Delta SkyMiles members have renewed a “SaveSkyMiles” campaign, complete with its own Web site (http://www.saveskymiles.com).
Though disappointed with changes to their programs, the majority of members (as evidenced by the WebFlyer survey) are deciding that, rather than run to another program, they prefer to stay and fight to improve the program to which they’ve been loyal.
The convergence of frequent-flyer miles as a second currency with instant global communications and disillusionment with program change has created a movement we call the “militancy of miles.” The rallying cry: Be active, be involved, be inquiring and be demanding.
A Look at Recent Militant Movements
Though the rise of militancy among frequent travelers is a relatively recent phenomenon, the first tentative attempts at this form of protest were undertaken nearly 10 years ago, by none other than Inside Flyer.
In the 90s, the editors of this magazine led two movements in response to changes announced by Continental OnePass and United Mileage Plus. In 1994, OnePass implemented sweeping changes to its highly valuable upgrade policy, and shortly thereafter United introduced a Saturday night stay requirement with 14 day advance notice on award redemption. Those involved in these small movements asked the respective programs to reconsider these changes, and in both situations the programs rescinded the policies once they were made aware of the feedback from members.
These grassroots efforts demonstrated early on that ordinary members are not powerless and that with a concerted effort they can have an influence on the programs. Then, in the latter part of 1999 and early 2000, the members of the Continental OnePass program got together again and in much greater force — this time in an effort to “Deny Continental the Freddie.”
For years, Continental had enjoyed a tremendously loyal membership. Millions of OnePass members had flown and supported the airline as it struggled to survive bankruptcy. They delighted in the program’s generous upgrade policy and took pride in the airline’s success in the late 90s.
But in 1999, many of these same members began to sense that Continental was becoming complacent and was less concerned about keeping the loyal members satisfied than it was about attracting new members.
Much of the program’s advertising at the time boasted of the numerous Freddie Awards OnePass had received over the years (for more information about the Freddies, go to www.freddieawards.com). A group of members who perceived their benefits to be diminishing and who were frustrated with the program decided that the best way to make their concerns heard would be to undertake a concerted, organized effort to ensure Continental OnePass did not win any more Freddie Awards.
“Many of us were noticing a gradual decline in service over time,” said the movement’s founder, David Danto. “When we would complain to Continental, their general response seemed to be ‘Hey, we’re winning all of these awards, so you can’t be having problems.’ So we said, fine, then we’ll prevent you from winning awards.”
Though it’s difficult to determine the impact the campaign had on Freddie voting, Danto believes the movement’s message was more important than short-term results.
“It was probably ineffective at first,” says Danto. “But as time has passed, I do feel vindicated now that everything we predicted and the horrible trends we foresaw turned out to be true.”
“Deny Continental the Freddie” represented the first organized effort by a group of members to make their voices heard and directly influence a program’s policy decisions. And it certainly wouldn’t be the last.
Late in 2002, US Airways had a bug problem.
In September of that year, the airline announced sweeping changes to its Dividend Miles program, largely designed to change the behavior of its most frequent flyers. Among other things, the changes rewarded those paying higher fares, and reduced benefits for those flying on the cheap.
“We had customers who paid $2,000 asking us ‘Why is the person who paid $200 afforded the same luxuries as me?'” said David Castelveter of US Airways. A logical question, and one US Airways tried to address.
Of course, not everyone saw it that way. Many economy-minded, and distinctly loyal customers felt slighted. Some of them, spurred by angry posts to FlyerTalk.com, formed a group that called itself the “cockroaches.”
The name, they say, was taken from a pejorative post on usairways.com. Within weeks, 500 cockroach-shaped lapel pins (complete with the US Airways logo) were made. Some 400 have been sold.
For the record, US Airways never implemented the changes.
“What we might have said or done, we meant no offense,” Castelveter said. “Today, someone flying for $200 and someone flying at $2,000 get the same miles awarded into their account, and they all count toward tier status.”
Did the bugs win? In a sense. But the changes were rescinded long before such mainstream media outlets as USA Today profiled the cockroach movement. The direct impact, then, of the few hundred cockroaches out there, has been limited to an after-the-fact gadfly role.
Not so with the 22 hard-core members of Air Canada’s Aeroplan who, in January 2002, started up a satirical Web site — Errorplan.com — devoted to stopping changes to the program.
Though their identities remain closely guarded, the group appears to have had an impact on the airline, largely because of their clever use of printed newsletters and the Internet. Many of the newsletters, which warned of upcoming program changes even before they had been announced, made their way into conspicuous places on Air Canada flights and lounges. Needless to say, program executives were not amused.
“We were very upset because they were using our brand and our premises to distribute their newsletters,” said Aeroplan president Rupert Duchesne. “We regarded it as an infringement on our intellectual property rights.”
Still, Duchesne and his colleagues weren’t about to write off such an obviously well-organized group of customers. Air Canada executives willingly met with members of the guerilla front. The proposed changes were never implemented, and unlike just about every other loyalty program out there, Aeroplan has made no changes to benefits for 2003.
Most recently, Delta SkyMiles has seen its members organize what they call the “SaveSkyMiles” campaign.
Originally launched a few years ago, the SaveSkyMiles campaign has been reborn in 2003 in response to Delta’s recent elite qualification changes and changes to elite benefits. At www.saveskymiles.com, anyone can read the complaints of those who are spearheading the campaign and other SkyMiles members can even sign a petition to show their allegiance to the cause.
“We’re not lunatics. We’re looking for a few concessions, reasonable changes, so we can stay with Delta without feeling like suckers,” says Bruce Schobel, a New York-based actuary and two Million Miler on Delta who is active in the SaveSkyMiles movement. “Delta’s program is no longer competitive with those of other airlines, and we believe that this will drive away customers. Basically, we support Delta. We don’t want to see our favorite airline destroy itself.”
Why All the Fuss? Why Now?
With the above examples, we are witnessing a tidal wave of cynicism, fear and an insistence on responsible frequent-flyer program management. An increasing number of people believe these programs are out of control. They find the world of miles less tangible and beyond prediction, and they are extremely confused by the panoply of choices with which they are confronted. In the end, ordinary members suddenly find themselves disentitled from benefits that were long considered a God-given right.
Ten years ago, program changes came and went with nary a mention in the media (other than in this magazine, of course). But times, and members, have changed. Members want something back, they want rewards for their loyalty — and they don’t want the benefits and awards granted them today devalued over the time it takes to gain benefit from them. Members believe they have a right to share in the value they create and are increasingly viewing loyalty as a two-way street. It is this belief that helps fuel these movements.
But what ignited this recent firestorm of mileage militancy? Part of the reason may stem from a failed attempt by the U.S. government to address the rights of travelers. In 1999, the U.S. Congress proposed a bill that would address many of the concerns facing frequent travelers. Not wanting to suffer any type of government regulation, the airlines joined together and introduced what was then called the “Customers First Initiative,” with the stated purpose of providing more information and power to frustrated travelers. Frequent flyers, tired of feeling helpless when attempting to take advantage of supposed program benefits, looked forward to the increased leverage the initiative sought to provide. But when all was said and done, the only thing the airlines committed to disclose were their frequent-flyer rules. (And who doesn’t want to spend all day reading the rules?) Alas, there was no direct implementation of frequent flyer program requirements, such as a much needed minimal number of saver award seats per flight, etc.
In the end, the government backed off, preferring instead to let the airlines handle the situation internally, and frequent travelers were left with what they perceived as little more than a smokescreen. Still frustrated, and with no more illusions that the government would come to the rescue, frequent flyers turned to each other — and they did so via the Internet.
If the information age has taught us anything, it is that we are not alone. In numbers there has always been power, and with current technologies such as email and online bulletin boards, numbers have never been easier to acquire.
“I do think the Internet has everything to do with the formation of these types of movements,” says Mark Sullivan, managing director-loyalty marketing, Continental Airlines.
Witness FlyerTalk, an online bulletin board devoted to frequent travelers. This year alone, FlyerTalk will likely see nearly 2 million posts, all on topics related to frequent-flyer programs and travel. Now, like never before, members can instantaneously share information, along with their opinions about the changes being made to these programs.
With this access to others who share similar experiences, member protest has taken a more global approach. Gone are the “nimbys” (not in my back yard) who protested changes to their programs, but were unconcerned with the activities occurring in the larger world of frequent flyers. Today’s militants oppose program changes on principle and strive to garner the combined strength of frequent flyers to oppose any change that might negatively impact the entire industry.
This is why members involved in the SaveSkyMiles effort have tried hard to get members of other programs involved with their efforts, as it is feared the changes in the Delta SkyMiles program may have an affect on potential partner programs Northwest WorldPerks and Continental OnePass. Nimbyism is not about solving problems, it’s just about shunting problems into someone else’s program. Nowadays we are seeing “opposition on principle.” A belief by members that they have a “right” to benefits, combined with a general disillusionment in the government’s ability to assist and ready access to thousand of others in the same boat proved a perfect set of circumstances for the proliferation of today’s brand of militancy.
Is Anybody Listening?
The militancy of miles is transforming the relationship between programs and members, even as some program executives remain strongly resistant to this form of consumerism. Those that oppose the idea of allowing these types of movements to actively influence program operational decisions argue that, though vociferous, these militant groups represent only a small fraction of the membership population.
“We like to hear the opinions of all of our customers, and we often get good information from those who post on FlyerTalk,” says Sullivan. “But we do not make program changes based solely on the feedback of one segment of the OnePass population. We try to address the opinions of all OnePass customers and come to decisions based on how we can make the program better for everyone.”
Therein lies the rub. Though every program executive realizes that the surest way to success rests in learning how to better satisfy members — and successfully retaining loyal customers takes on even greater importance today, as airlines struggle to navigate the treacherous waters ahead — they are left with the question; How much weight do you give to the complaints of any given sub-set of members? For some at least, the answer is, “each member’s feedback carries equal importance.”
It must be said, however, that not all program executives are quick to dismiss these movements. When Air Canada announced the changes that spawned the introduction of Errorplan, executives from the Aeroplan program willingly met with representatives of that member effort. The President of Aeroplan, Rupert Duchesne, even volunteered to appear on the popular FlyerTalk Live! chat forum to address member concerns and returned two months later to report on the progress that was being made to mesh the economies of the industry with the expectations of the members.
SkyMiles program director, Robert Borden, is another program executive who expresses the need to actively communicate with these distressed groups of customers.
“With these most recent SkyMiles changes, we started a Q&A thread on FlyerTalk to answer customer questions in an effort to guard against misperceptions,” says Borden. “We also are actively using delta.com and email, in addition to regular mail, brochures and phone calls. All of this is in an effort to reach a broad cross-section of customers in an attempt to give perspective on our changes and to respond to their questions and concerns.”
In fairness, we know of few major programs that have made major changes without first running a few ideas and concepts by member focus groups. When a program meets regularly with an informal member-advisory group, it is providing access to the corporate decision-making process long before the point of change. Of course, programs will not always go along with its member group’s recommendation; but you can be sure more and more programs are including members as part of the process of arriving at decisions.
A Militant Revolution
In the past few years in particular, major programs in North America have suffered a severe crisis of public confidence. With the bankruptcy of two major airlines (and the resulting fear of loss of awards and benefits) and the loss of all earned awards by members of the National Airlines and Ansett frequent-flyer programs, consumers have lost slavish brand loyalty and instead have become shrewd members seeking a blend of program quality, value for their loyalty and, most of all, safety from devaluation of their miles and awards.
Gaining the loyalty of the frequent-traveling public has always been a little like trying to hold onto a wet fish with a buttered hand. Most frequent flyers have never been hesitant to shop around, always looking for a better program, one that meets current needs or that holds the allure of greener pastures. Perhaps due to this fragile “loyalty,” programs in return have continued to slash benefits, have failed to meet the rising expectations of award redemption and have engaged in a litany of personal peccadilloes (who can forget in 2002 when the Chairman of Continental Airlines, Gordon Bethune, stated in an in-flight magazine that there would be no changes to the OnePass program, only to be trumped days later when OnePass executives did, in fact, announce changes?).
In their newly militant form, however, members now seem to believe only they can be relied upon to stop a slide into powerlessness. Members have learned that their voice counts, and that when they work together, they have a new legitimacy. Ironically, this militancy appears to re-enforce program loyalty, and could actually serve both the members and the programs well — at least those programs that realize militant members are members who are willing to fight to remain with their program of choice.
The militancy of miles is a fine-tuned, better-provisioned and more outraged and active version of the Inside Flyer actions in the early 1990s. Consider the arsenal: 89 million members of programs worldwide, some 80 percent or more with Internet access and over 5 million elite members in North America whose benefits seem to wane over time. Combine that with the attention of major media worldwide and it is clear militancy is a force that is already shaping the 21st century of miles.