Opening Remarks – March, 22 2011

Opening Remarks – March, 22 2011

Match My Miles

Recently I had the distinct pleasure to address a conference of frequent flyer program executives. And while I enjoyed tiptoeing through the tulips of the past 30 years of frequent flyer miles (their birthday is May 1 if you want to add this to your calendar), I also tripped over a few roots. One of the roots I thanked program executives for was the advent of the “status match”. Yes, frequent flyers do not have to start all over when changing travel loyalty. The notion that a super-elite flyer would have a mere ‘silver’ card in their wallet is only slightly better than a standard-issue basic blue card.

But status matches are not the only thing distinct in the history of loyalty programs. In the fall of 2001, KLM announced a master of a mileage match offering up to 100 percent of the points or miles you had with another airline loyalty program. On top of that offer was yet another offer to match the same elite level that you held with the competing program. Needless to say that despite the requirement to have a non-U.S. address (KLM was a partner of the Northwest WorldPerks program at the time), hundreds if not thousands chased the mileage match (into the millions of miles–literally!).

Fast forward 10 years and they (mileage matches) are back. Although this time, it’s not a battle between airline metal, rather, a battle between airline plastic. For years we have written about the impact of the credit card on these programs almost to the point of declaring that credit card companies are the inventors of frequent flyer programs. And after the past year of writing about monstrous mileage bonuses for new credit card applications (yes, I’m aware that some of you missed out on the 100,000-mile bonus from British Airways Executive Club), here’s the latest mashup.

Capital One’s Venture Card, clearly the most competitive card in the past three years in the travel space, has released the “Match My Miles Challenge”. And it is darn near one of the most innovative promotions we’ve seen in the U.S. for some years. This promotion gives frequent flyers who acquire a new Capital One Venture Card the opportunity to match up to 100,000 of the miles they have in an airline credit card rewards program. What this means is that if you play your cards right, you are likely to get a nice chunk of the one billion miles that this offer is good for. That’s right, Capital One is putting forth up to 1,000,000,000 miles into this promotion.

And it is designed to work very simply. Sign up for a new Venture Card (one of my picks for the most influential cards in the past three years–where do you think the idea of no foreign exchange fees came from?), provide proof of your current airline miles and spend $1,000 on the Venture Card during the first three months.

There is a catch–first-come, first-served. Now, considering that I know tens of thousands of frequent flyers that easily have 100,000 airline miles that can be matched, this offer might only last to the first 1,000 people (if they each match 100,000 miles). But my guess is that there will be any number of others with far fewer miles on their mileage accounts to match. The plan is to offer the one billion miles until they are all gone, or until May 13. Frankly I’d like to see them last no longer than mid-April and I’m thinking of doing it myself. Just coming off an international trip where it looks like I’ve paid nearly $100 in three percent foreign transaction fees with my airline credit card, maybe the timing is great for me to look around. Lord knows the offer is rich enough to get my attention even if the card benefits themselves may not have caught my eye. And if I’m counting, the 100,000-mile bonus is worth around $1,000 when I compare it to Capitol One’s latest award redemption policy and chart.

As you may know, the Venture Card offers double miles so customers earn miles twice as fast, and they enjoy easy redemption, without the restrictions commonly found in other rewards programs: no blackout dates on any airline, no expiration, no spending minimums, no earn caps, no special earn categories and as mentioned, no foreign transaction fees.

Interested? Here’s where you need to go:
http://www.capitaloneventure.com

And finally … The biggest question this past month: What does the move by Delta SkyMiles to end expiring miles mean to the industry? The answer: Nothing. There has never been any measurable competitive shift because of expiring miles and there will not be one now. Just days away from the Delta SkyMiles announcement was the launch of the new Southwest Rapid Rewards program with the latest and most forward direction in the industry and it has expiring points. So while we are in the middle of the decision by United to adopt the OnePass strategy of no real expiring miles, or keep the current Mileage Plus expiring miles, the Delta SkyMiles decision I don’t think has any immediate effect on the industry. I can see all the other programs, including American AAdvantage, retaining their expiring miles.

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