Qantas Points Club Discussion

[dairyfloss]

You are WP - the PC and PCP tiers were not really aimed at WPs - they were intended to give some crumbs to people who accumulate a lot of points but don’t fly often.

SC earning on QF award bookings is more of a meal than some crumbs, but that was already sorted with PC.

 

[Mr H]

SC earning on QF award bookings is more of a meal than some crumbs, but that was already sorted with PC.

For the target market - as per their launch material - the SC earning on reward flights would be of minimal benefit since their target market would not be aiming for status. Plus, they are the least likely people to be able to get rewards on QF flights. A better bonus for their target market might be for PC+ members to be able to book QF reward flights when they are first released.

 

[exceladdict]

For the target market - as per their launch material - the SC earning on reward flights would be of minimal benefit since their target market would not be aiming for status. Plus, they are the least likely people to be able to get rewards on QF flights. A better bonus for their target market might be for PC+ members to be able to book QF reward flights when they are first released.

I think the underlying business goal is to get people redeeming qf points on qf flights, instead of partners or toasters which require a cash outflow.

 

[Mr H]

I think the underlying business goal is to get people redeeming qf points on qf flights, instead of partners or toasters which require a cash outflow.

I'm not sure about that. The toasters cost QF maybe 0.5 c per point - and they sold the points for 1.0c per point. There's a healthy profit to be made from selling toasters, even though the cash flow is a bit back to front.

If QF wanted people to redeem on OF flights, then the obvious thing to do would be to release more award inventory. As long as all their reward seats are already being snapped up, then there's no point in trying to encourage more people to opt for them.

 

[jcwhizz]

I'm not sure about that. The toasters cost QF maybe 0.5 c per point - and they sold the points for 1.0c per point. There's a healthy profit to be made from selling toasters, even though the cash flow is a bit back to front.

If QF wanted people to redeem on OF flights, then the obvious thing to do would be to release more award inventory. As long as all their reward seats are already being snapped up, then there's no point in trying to encourage more people to opt for them.

I reckon the QF target market was nothing to do with the long suffering punter (ie us) and everything to do with encouraging various banks / large retails to ally with QF…. People love chasing targets and now have a reason to churn cards to “better” points earners / change banks and / or buy fuel from BP etc.

 

[Mr H]

I reckon the QF target market was nothing to do with the long suffering punter (ie us) and everything to do with encouraging various banks / large retails to ally with QF…. People love chasing targets and now have a reason to churn cards to “better” points earners / change banks and / or buy fuel from BP etc.

I agree that PC/PC+ encourages churning but I can't see that banks would want to encourage that. The points bonus for credit card sign up is a loss leader for the banks to recruit new business. It doesn't work for them if people leave as soon as they have received their sign-up bonus.

 

[jcwhizz]

I agree that PC/PC+ encourages churning but I can't see that banks would want to encourage that. The points bonus for credit card sign up is a loss leader for the banks to recruit new business. It doesn't work for them if people leave as soon as they have received their sign-up bonus.

Sure you will get the few professional churners but I’ll bet Scotty from bank marketing has done the math - there will be a significant proportion who don’t actually close down their old card…. And most of the cards that have the big sign on bonuses have a nice far annual fee….

 

[sudoer]

I think the underlying business goal is to get people redeeming qf points on qf flights in economy class, instead of partners or toasters which require a cash outflow.

My addition in bold. QF can't have everyone redeeming business/first long haul, but they need to release just enough aspirational inventory for a new QFF member to hear about them. In a sense, any of us AFF members who've told their friends & family about their latest premium cabin trip for only $400-600 taxes + X points, or have posted pics/videos on social media, are giving QFF exactly the word of mouth marketing that keeps the machine profitable. And there's nothing wrong with that - I'm certainly guilty on all counts.

everything to do with encouraging various banks / large retails to ally with QF

This is very true. QFF's loyalty program has turned into so much more than just rewarding people for flying, and you can see how hard they're pushing to expand it with QBR to tap into the small business owners segment who will usually have control over more spend than your average QFF member.

I agree that PC/PC+ encourages churning but I can't see that banks would want to encourage that. The points bonus for credit card sign up is a loss leader for the banks to recruit new business. It doesn't work for them if people leave as soon as they have received their sign-up bonus.

The banks are absolutely fine with churning - it's a customer acquisition cost. The SUB equation doesn't work if everyone takes their SUB and runs, but you'll always have a certain percent that hit the $5k min spend and carry the balance paying ~$1k per year interest, or even worse, can't control their spend and impulsively max out the card, becoming stuck on the credit card debt treadmill. I have spoken with professional connections who are >$50k in credit card debt - it's the unfortunate truth that these are the "perfect customer" for a bank, and ultimately what keeps the SUB market so lucrative and worth continuing to churn.

 

[exceladdict]

I'm not sure about that. The toasters cost QF maybe 0.5 c per point - and they sold the points for 1.0c per point. There's a healthy profit to be made from selling toasters, even though the cash flow is a bit back to front.

If QF wanted people to redeem on OF flights, then the obvious thing to do would be to release more award inventory. As long as all their reward seats are already being snapped up, then there's no point in trying to encourage more people to opt for them.

Yes true, they wouldn't do it if it wasn't profitable.

I agree that PC/PC+ encourages churning but I can't see that banks would want to encourage that. The points bonus for credit card sign up is a loss leader for the banks to recruit new business. It doesn't work for them if people leave as soon as they have received their sign-up bonus.

Banks also make money from interchange fees, I've tried to do the maths before but I doubt we would see points awarded on ongoing spend if there was no margin.

My addition in bold. QF can't have everyone redeeming business/first long haul, but they need to release just enough aspirational inventory for a new QFF member to hear about them. In a sense, any of us AFF members who've told their friends & family about their latest premium cabin trip for only $400-600 taxes + X points, or have posted pics/videos on social media, are giving QFF exactly the word of mouth marketing that keeps the machine profitable.

Good point!

 

[http_x92]

Even other people are surprised at how we can get Y seats for so cheap, like telling them a SYD-LAX CR is only $350 + X points. Even better if its J.

 

[MEL_Traveller]

This is interesting… I know a lot of click-bait bloggers do it this way…. $250 First class to London (plus 350k miles), but do non bloggers actually do it too? I always say I paid 300k miles, plus fees and tax… I consider the 300k the price of the ticket, rather than the carrier fees and charges.

In a sense, any of us AFF members who've told their friends & family about their latest premium cabin trip for only $400-600 taxes + X points, or have posted pics/videos on social media, are giving QFF exactly the word of mouth marketing that keeps the machine profitable. And there's nothing wrong with that - I'm certainly guilty on all counts.

 

[sudoer]

This is interesting… I know a lot of click-bait bloggers do it this way…. $250 First class to London (plus 350k miles), but do non bloggers actually do it too? I always say I paid 300k miles, plus fees and tax… I consider the 300k the price of the ticket, rather than the carrier fees and charges.

Sorry, I wasn't intentionally putting the taxes first, more suggesting that friends & family are usually curious about how we can afford to travel internationally in business/first several times per year. An outsider is looking at it from a financial perspective - I always stress the cost of the points (annual fees) also.

 

[GDale]

This is interesting… I know a lot of click-bait bloggers do it this way…. $250 First class to London (plus 350k miles), but do non bloggers actually do it too? I always say I paid 300k miles, plus fees and tax… I consider the 300k the price of the ticket, rather than the carrier fees and charges.

I do too but I think most "normal people" see points as completely valueless, hence the only cost are the taxes. I always tell people to value points at my conservative valuation of 1 cent per point - they sound like they understand what I'm saying, and then go away and redeem 300K plus $2K points points plus pay in premium economy to Europe and think they've got a bargain...

 

[MEL_Traveller]

I do too but I think most "normal people" see points as completely valueless, hence the only cost are the taxes. I always tell people to value points at my conservative valuation of 1 cent per point - they sound like they understand what I'm saying, and then go away and redeem 300K plus $2K points points plus pay in premium economy to Europe and think they've got a bargain...

Yeah!

I buy almost all my points, so I guess I put those as the primary price!

 

[exceladdict]

I do too but I think most "normal people" see points as completely valueless, hence the only cost are the taxes. I always tell people to value points at my conservative valuation of 1 cent per point - they sound like they understand what I'm saying, and then go away and redeem 300K plus $2K points points plus pay in premium economy to Europe and think they've got a bargain...

I consider the opportunity cost of a point around half a cent, as that's give or take the gift card rate, which I can substitute for real money at woolworths etc - so the opportunity cost of a 50k business class ticket is give or take $250 plus the $100 or so in taxes.

 

[Mr H]

I consider the opportunity cost of a point around half a cent, as that's give or take the gift card rate, which I can substitute for real money at woolworths etc - so the opportunity cost of a 50k business class ticket is give or take $250 plus the $100 or so in taxes.

I try to avoid valuing points because I think it creates spurious accuracy.

But, I believe a point costs a bank or supermarket about 1 cent (I have heard 1.1 cents) per point. If it is redeemed for goods then the going rate seems to be about 0.5 cents per point.

When I acquire points the price I pay can vary from the full 1 cent per point (when I redeem Woolworths points for Qantas points instead of cash back), through 0.4 cents per point (the most expensive credit cards at 100,000 points from a $395 fee), to 0.04 cents per point (70,000 points for a $30 fee for a Commbank card).

When I redeem, I usually do it for premium cabin flights and get a minimum of 2 cents per point - usually a lot more. But it is difficult to really calculate this because you do some things on a OWA that you would never do when paying revenue fares. Last year I came back from Tehran with stops in Tunis and Amman which would never have happened on a revenue fare. I routed hope from Amman via London, Helsinki/Helsingfors and Delhi which was simply nuts. Do I value this at the cost I would have paid on half a (Y) return from MEL-IKA, or do I value it as a revenue (J) DONE fare, or do I price it as separate J revenue flights?

Or on point to point, I am using Velocity points for a 1.15 hour business class flight on Etihad from AUH-MCT. The revenue cost for this is something like $1,300 but if I were paying revenue I would be going Wizzair for $70. I paid more on fees/taxes for my award flight than I would have paid on a revenue flight.

Overthinking value leads to madness. I view points just as a currency (yes!) that allows me to do things I would not otherwise be able to do . For me, that is priceless.

 

[MEL_Traveller]

But it is difficult to really calculate this because you do some things on a OWA that you would never do when paying revenue fares.

Worst are the bloggers that use a RTW points fare but price each component separately at the full one way unrestricted F class fare… so they’re getting $60k value for their redemption. Of course no actual passenger would ever do that!

 

[The Flying Schwartz]

The 100SCs at rollover is the only PCP benefit for me, over PC.

I agree, the SC rollover does make it seem worthwhile (we only do one or two int trips per year) as long as I’m purchasing things I need - we can never have too much wine around the house

 

[one9]

Does anyone know if and when you should receive a $100 Qantas Hotels voucher if you requalify for Points Club Plus. ie. If you are already Points Club Plus because you earned over 350,000 points in your last membership year (so I received a $100 voucher last membership year), and then you earn another 350,000 points this membership year. I requalified for Points Club Plus by earning 350,000 points 4 months ago but didn't receive a new voucher. Is this correct?

 

[SYD]

Does anyone know if and when you should receive a $100 Qantas Hotels voucher if you requalify for Points Club Plus. ie. If you are already Points Club Plus because you earned over 350,000 points in your last membership year (so I received a $100 voucher last membership year), and then you earn another 350,000 points this membership year. I requalified for Points Club Plus by earning 350,000 points 4 months ago but didn't receive a new voucher. Is this correct?

They seem to be issuing subsequent benefits after your anniversary date, not when you requalify.