Randy Petersen's Opening Remarks – August, 22 2012

Randy Petersen's Opening Remarks – August, 22 2012

Join The Call

I received a letter from one of our readers (see Letters to the Editor on page 8) and actually, he is one of my favorite smart guys when it comes to the topic of miles and points. Gary Leff is author of the blog View From the Wing and has made a name for himself among frequent flyers. In fact, in the past I’ve even asked Gary to guest write this very Opening Remarks column. Gary and I at times agree on certain topics and then other times we’re a bit at odds, but never do we drop our respect for the other’s opinion. This may be one of those times when we agree to disagree, so with the utmost respect to Mr. Leff, I’ll reply to his letter here. I always enter a discussion with Gary thinking I’m about to get my hat handed to me because not only is he one of the truly smartest guys on the block, but he’s been a member of a champion debate team. Couldn’t someone else have written a letter to me this month? Okay, Mr. Leff …

Gary, I always appreciate a fine discussion with you. But there’s a bit of a disconnect I think. You mention trying to persuade me to “join the call” to let members manage their own data. What I find strange about this comment is that I’m pretty sure history shows I was the absolute first to make that call and still do. In fact, you likely weren’t even in high school when I first introduced a solution to help members manage their miles and data. What exactly were you doing in 1987? Fact is, I’m all for members being able to manage their own data or I would have never introduced the original Mileage Manager in 1987. And while I’m not big on this recent move by both Southwest and American, I do respect where they are coming from. I can assure you that in the original conversations I had with Southwest about their stance on this, the idea of a commercial agreement was not the topic of concern they spoke of–it was their members’ information security. Reading Ms. Rubin’s comments from the recent Milepoint chat, I can see that AA might be sensitive to a third party company having the ability to “profit” from their data. There it is, that ugly capitalist word–profit.

Now, concerning commercial agreements–to get access to any travel industry information and/or inventory, you must have a commercial agreement in place to utilize that data. Individual customer data is not freely available–companies must pay for it.

Granted, the amount of money required to get access to this member data may in many cases be a high hurdle to clear for the smaller startups, but frankly I see that as a positive. Here’s why. Over the past 20 years, I’ve seen more than 50 screen scrapers come and go with business models to help aggregate mileage and other types of loyalty balances with maybe two or three identified as “making it”. Gary, you are a CFO, what kind of business market is that? With the move toward commercial agreements, it likely will force this segment to become more accountable to their business model, and as well, more responsible to their customers. And I’m not saying I agree that this is the best solution, but if it brings some level of responsibility and protection for the members and their data, then I’m all for it.

I’m sure the reasons why AAdvantage has suggested a commercial agreement are complex, but the main reason is that they likely have spent a lot of time and money creating the membership data and why should they give it away? I know the reply … because it’s their customers’ data, not AAdvantage’s. I get that, but I think by and large that average members need some level of protection for what happens to that data if released by a loyalty program.

Here’s a really funny look at this situation, Gary, because you mention the issue of “terms and conditions to the detriment of their members” and, “members have to take extra steps to check their frequent flyer balances.” I visited two of the leading mileage aggregators today and here are excerpts from these third party companies’ own terms and conditions: “Your Membership is solely for your personal use, and you agree not to authorize others to use your Membership account …” and “While XXXX may show award expiration dates it is the user’s responsibility to verify expiration dates directly with the provider of miles/points”. I find it ironic that the very industry you are defending has the very same rules as the industry it does not want to honor. And to verify the information on a third party website, you are being asked to return to where that information came from.

Historically, all loyalty programs have been accused of jealously guarding their members’ data. But the suggestion from AAdvantage of a commercial agreement might mean that the program is working to become a gateway–becoming a more open model for those who wish to work with AAdvantage. Without realizing it, we may be witnessing the next phase of the customer–apps for everyone.

Gary (and all frequent flyers)–we are all on the same call, let’s respect their rules and concerns and work toward making it safe and responsible for all of us.

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