Q & A with United CEO

Discussion in 'United Airlines | MileagePlus' started by Infinite1K, Nov 9, 2011.  |  Print Topic

  1. Infinite1K
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    Infinite1K Silver Member

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    The Associated Press did a Q & A with SMI/J.
    Full article here.
     
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  2. Jimgotkp
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    Interesting article... I thought you weren't able to congregate in the galley or lavatory areas? :p
     
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  3. Infinite1K
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    I guess that rule does not apply to CEOs. I also wonder if uses the lav which is not in his ticketed cabin :)
     
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  4. Flyer1976
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    Well when one is cornered on a flight, all one can do is go to the Galley and chat with the scum of the press over a Freshbrew Coffee =D
     
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  5. Wandering Aramean
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    My favorite quote:
    Must be an elite. :D
     
  6. Flyer1976
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    I liked the

    There's a few place I can think of that UACO+Partners should be flying to :p
     
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  7. Scottrick
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    More targeted promotions. *sigh* I never seem to get the good ones, but then that's to be expected if he's using my buying power as a metric.
     
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  8. HaveMilesWillTravel
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    As a scientist, what would you do if you were in charge?
     
  9. Scottrick
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    Scientists shouldn't be in charge of anything. It would probably lead to good results, but no one would enjoy it.

    That said, I think UA's people are probably figuring, "this guy flies infrequently, so let's offer him 1,000 bonus miles per RT during October, and this guy flies all the time anyway, so we can get away with offerring him 250 miles." The problem is they assume they know the results of their experiment before it takes place. How do they know, for sure, that the guy who does mileage runs every week on G fares isn't going to be incentivized? Maybe he'll fly twice a week, and bump it up to a W fare if he has to. I really don't know the answer to this, I'm just saying.

    There are two harms from targeted promotions. (1) You annoy customers who weren't targeted. (2) You have an opportunity cost if you targeted incorrectly. There's also (3) you design the promotion poorly and lose tons of money, but let's assume sufficient safeguards are in place. There's no way to target promotions and avoid #1. However, you can reduce #2 by dividing each targeted group in half. Target the first half like as you originally intended. Target the second half randomly. That way you have an internal control, the best kind, to confirm your hypotheses about how well those promotions should work.
     
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  10. HaveMilesWillTravel
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    So are you enjoying the results that MBAs and lawyers come up with better? ;)

    I think as targeted promotions become more common place, people will eventually get used to not being targeted for everything. And there is harm from not doing targeted promotions: you are wasting promo money on people who would have done what the promo rewards even without the promo. An example that I think works well are certain re-engagement bonuses from SPG: my wife was offered certain rewards (extra points or something else, I forget) after having had no SPG stay for about nine months. I didn't receive that offer, because I had had a couple recently (so I clearly hadn't forgotten about my SPG account and there was no need for SPG to throw points at me).

    And yes, as a customer, I'd love to be targeted for everything and get as much free stuff as possible. :D
     
  11. Scottrick
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    But you're falling for the same trap as the people who design these things. There are individuals who don't change their buying habits, and there are individuals who don't. We have guesses about how to identify these groups by things like how many miles they fly and how much they spend, but we are still relying on hypotheses. I am proposing that it's fine to target half of your group using your guess. That's the testable hypothesis, H1. But you still need a null hypothesis H0 (the hypothesis that the promotion does nothing) to use as a control that gets the other treatment. You can't assign the entire group to one treatment or else your comparing an actual result against a guess about what would have happened if you hadn't offerred the promotion. Revenue projections and all the rest are not as good as real data about what happens when 50% of the population don't get the promo.

    Edit: I just realized, maybe the guys at UA are this smart, but I'm in the null group. :(
     
  12. HaveMilesWillTravel
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    Indeed, maybe they already do that kind of stuff ;)
     
  13. chitownflyer
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    Speaking of promos, I have not received a single email notification this year offering a United bonus mile promo. Instead, My Mileage Plus emails are filled with junk emails about using miles for merchandise or lots of other spam. Come on United, bring back the old style emails with info on bonus RDM or EQM offers.
     
  14. Infinite1K
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    The quality of MP emails has really hit an all time low. Whether it is the "special low fares sale" emails without any mention of pricing or their multiple emails on Merchandise Awards.

    At least they stopped sending out the silly emails that explained all the great benefits of the Mileage Plus program.
     
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  15. Mackieman
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    They are, and they've got tools internally that help crunch the massive amounts of data they have on all of their customers (especially us). We like to play armchair CEO a lot around here (and FT/A.Nut/Whatever else), but we often forget that there are a lot of smart professionals working for UA and other airlines.
     
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  16. Wandering Aramean
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    But certainly not as smart as we are without any data to back up our claims, right!?!? :oops:
     
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  17. Mackieman
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    Of course, we can't go around admitting that a staggering amount of our conjecture and personal opinion aren't stalwart facts. ;)
     
  18. Infinite1K
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    Having smart people and all that data does not mean they get everything right.

    Just ask all the smart guys at MF Global or Bear Stearns...
     
  19. Mackieman
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    I don't believe they always get it right. The idea I'm trying to communicate is that, the vast majority of the time, we have little to no information about anything that happens with UA (or any other airline). We have conjecture and we have colloquial experiences. I believe it is important to approach these topics grounded in the understanding that, while a certain action or occurrence may seem obtuse or just plain wrong to us, the company has vast amounts of data to mine in order to discern what to do in any given situation, and I know for a fact that they at least attempt to do this in the case of UA.

    To be sure, they don't always get it right. But to make a sweeping declaration of some level of incompetence because a particular customer was not included in a targeted offer because that person would have taken advantage of such an offer is short sighted and not cognizant of how marketing in a modern business actually works.
     
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  20. Infinite1K
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    I don't think our experiences are not relevant. Many of us fly frequently and our experience and knowledge is valuable. In fact, one of the consistent pieces of feedback that you hear from Airline Executives at Mega DOs is how informed the attendees are.

    I believe the issue at hand is that the CEO and his approach is that everything needs to be done based on numbers. That is how they define new products and services with the aim to make a profit. But you don't get great products that way.

    If you set out to make a great product or deliver a great service, not only will you get a great product or service, but you'll also get the profits to go along with it.
     
  21. Wandering Aramean
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    Actually, you do. Or at least you do to get sustainable great products.

    There is certainly a difference between the views of "cut costs no matter what" and "spend $1 to make $1.10" but I'm not at all convinced that Smisek is wholly in either of those camps.

    There's also the need to consider that simply having a great product doesn't mean you make money selling it. Just ask the folks who invented betamax. Sure, it'd be great if we all got to experience the absolute best product all the time but if the company cannot stay in business providing that then it isn't really of much value to us.
     

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