Randy Petersen's Opening Remarks – May, 30 2007

Randy Petersen's Opening Remarks – May, 30 2007

With the 19th Annual Freddie Awards behind me, I thought I’d take a few minutes and try to convey to you what they were like. As hard as I try, I just can’t seem to piece together all of the actions that make them so much work and yet so interesting when we observe the results. But I’ll try.

I have to say, while I find some of the results interesting, they no doubt continue to measure what the average member values in bonuses, promotions and in programs in general. I’ve pretty much given up thinking that I will ever be able to predict the results. I try every year and if I’m lucky will guess about 30 percent of the winners.

But my choices for those I think will win are inevitably the result of my belief in the bonds of loyalty and why I think these programs work. Did I look over the results and mentally compare my choices with the winners? Yes I did. Did I scratch my head to the tune of “What Were They Thinking?” Yes I did. Did I think that members of programs around the world wouldn’t know a great program if they belonged to it? No. I can honestly say that in the case of every single winner this year, I can recall enough experiences of my own or that of our readers, to determine that the winners did indeed deserve to win.

Did I hope that Hilton HHonors had won? Yes I did. Did I wish American AAdvantage had won? Yes I did. But from what I know of the Frontier EarlyReturns program, they clearly have done a superb job in giving value to their members. And which program puts more into marketing than InterContinental Hotels Group Priority Club Rewards? Frankly no one does.

However, while I can clearly appreciate how and why Priority Club won this year’s Freddie Award for Hotel Program of the Year, I think the recent changes they made without giving advance notice to their members will come back to bite them. But as well, I could be very wrong on this issue. Members tend to not hold grudges for very long and that may work to the advantage of Priority Club. I guess we’ll have to wait to see next year.

It was interesting to see that Starwood Preferred Guest bounced back from last year when they tumbled from a record year during the 17th Annual Freddie Awards. I’m not sure I know what the fall was all about, although I did read plenty of comments from various sources on the Internet that seemed to indicate that members were getting bored. I suppose it’s proof that there really is a seven-year itch among members of loyalty programs.

The one program that I’ve come to root for in recent times is Alaska Airlines Mileage Plan. It’s just the overall enthusiasm of the people running that program that gets my attention — how they seem to continue to be driven year after year to make positive additions for their members. You can just feel it.

The question I hear asked most often from everyone is why aren’t the big programs winning? The answer to that is not a simple one. Large programs continue winning in the hotel categories, though the strides that the smaller Choice Hotels program makes year after year seem to buck that trend.

But to answer the question for airline programs, let’s remember that all large frequent flyer programs have focused on simply surviving these past five years. Until recently, they’ve spent no money at all to improve their programs and have to a large degree gotten into a two steps forward, one step back routine that has not helped matters any. What does American do when they introduce 15,000-mile awards? Add service fees for upgrades. What does United do to follow on the success of their Choices program? Cut back expiration dates. The list goes on and on. For once, I’d like to see a very smart frequent flyer program recognize that positive changes should not always have caveats.

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