Postcards from Perkistan

While doing an update of the AAdvantage program I’ve stumbled across some interesting 2008 stats for the program:

Q: How many AAdvantage Awards were claimed in 2008?
A: The number of awards claimed in 2008 in each AAdvantage mileage redemption category were as follows:

MileSAAver® and AAnytime® Awards: 2,858,222
Upgrade Awards: 769,527
Product Redemptions: 407,074
Special Mileage Awards / Other Airline / Other: 780,533
Total Redemptions - 2008: 4,815,35

It’s pretty interesting to see that most miles (60%) are redeemed for flights using American Airlines even though there are 20 leading airline partners that members can redeem their points with. Total redeemed on Flights is an astounding 92%.

All flights within continental US are worth 25,000 points flying AA. A flight from New York to Los Angeles on American Airlines is worth around $382. Meanwhile, if we compare this with a 25,000 point merchandise reward we are looking at getting $250 worth of value for our 25,000 points. It certainly seems that AAdvantage members are making the most of their points.

-Me

I was reading Wise Marketer this morning, a website for loyalty marketing professionals. They quoted some news from travel site kayak.com:

Kayak.com has issued a number of tips for prospective travellers, one of which is to simply: “Forget customer loyalty. Frequent flyer miles aren’t as valuable as they used to be, so book with another carrier if it means a deal”.

Now, the argument around the value of frequent flyer programs and points and accessibility is one that is covered in great depth and by extremely knowledgeable and passionate people out there in the webisphere. And they take their points very very seriously, so I’m not going to get into a stoush with them.

Miles, miles everywhere...

What the kayak research shows is that obtaining value from these programs when you are chasing their core reward (in this case flights) is hard. What they don’t highlight is that if using those points for a trip is so hard, you should look to burn them on the thousands of other retail and merchandise items you can get.

Sit on points hoping to get a reward, or (like our private beta tester Wayne) find the coffee machine of your dreams in the Perkolator™ and use those flying points on instant satisfaction.

And that’s where we come in. Instead to telling people how ‘broken’ loyalty is, we enable consumers to find their favourite brands and activities in locations near to them so they can utilise the programs in a tailored and personal way. And rather than focus on the big points programs we would much rather do this in retail programs are based on the brands people love.

Retail programs are (on the whole) simple. Spend in a store or from a favourite brand and you get rewards. Sure some of the rewards on offer seem minuscule compared to the purchase price but there are plenty of great programs, and if you are going to shop there anyway…

We will also be working hard at Perkler to tell retailers what their consumers want - we hope they will take advantage of the community and target people for extra and special perks. We are on the lookout for these kind of retailers right now and together we know we can make retail loyalty even better.

As a wise man (not wise marketer) once said “the perks are out there…”

Have a good weekend everyone

Justin