Qantas rolls out Classic Plus Flight Rewards

[levelnine]

But there was already a fixed points value with Points + Pay, wasn't there?

And almost no one acquired Qantas points in the hope of redeeming them at that rate, which is exactly my point.

It shows, contrary to Gremlin, that a loyalty program needs to deliver value in the eyes of the vast majority of customers — not just the high utilisers — for it to remain viable.

If all Qantas offered was P+P, Qantas Loyalty would have gone bankrupt years ago.

 

[Gremlin]

It shows, contrary to Gremlin, that a loyalty program needs to deliver value in the eyes of the vast majority of customers

Completely disagree. The vast majority of customers need to PERCEIVE that they are going to receive value. Not everyone will REALISE that value. Qantas are very good at dangling that carrot. If they weren't, every time QFF devalues their program, there would be a marked drop off in engagement and utilisation. And yet, they continue to experience above system growth year after year, devaluation after devaluation.

Oh, but maybe this time it's different. (Except it's not)

 

[Gremlin]

You are confusing two separate forms of profitability: profitability for the customer and profitability for the loyalty program.

I'm not. It's my job and I know how this stuff works. You're on the outside guessing at what that relationship looks like.

The most high utilisation customers may be less profitable than low utilisation customers, but that does not mean they are unprofitable. That is especially the case when you consider their TCV — a high utilisation customer might extract value in particular parts of the program, but that cost may be more than offset by the marginal business they direct into the loyalty program.

It's true that they need not be. But they are - at least with every loyalty program I've ever been associated with.

There are segments of high utilisation customers who are VERY profitable. But they are not those who are points hacking, who are usually only chasing the 'headline' redemptions at the cheapest points acquisition rate.

Most genuine high value, high utilisation customers lose out in terms of program value to those points hacking.

 

[p--and--t]

A. Qantas was feeling a lot of heat from constant bad press and harassment from certain commentators about 1. No awards seats available 2. P+P ridiculous redemption rates.

B. Qantas released CR+

C. When was the last time you saw an article (not on AFF) coughing about reward seats?

D. End of story IMHO

 

[levelnine]

Completely disagree. The vast majority of customers need to PERCEIVE that they are going to receive value. Not everyone will REALISE that value. Qantas are very good at dangling that carrot. If they weren't, every time QFF devalues their program, there would be a marked drop off in engagement and utilisation. And yet, they continue to experience above system growth year after year, devaluation after devaluation.

Oh, but maybe this time it's different. (Except it's not)

The idea that perception and reality can remain permanently at odds for the vast majority of customers is belied by the simple fact that Qantas introduced C+. It was that very gulf that Qantas felt it needed to address, and in a very major and very public way.

Thus, the very existence of this thread defeats your argument.

I'm not. It's my job and I know how this stuff works. You're on the outside guessing at what that relationship looks like.

You keep banging on and on and on and on about the fact that you work in loyalty. My response to that is that there are plenty of people who work in the industry who are extremely poor at their job. The fact that you work in the space means absolutely nothing — well, except for the fact that you have a vested interest in justifying your purported expertise.

It's true that they need not be. But they are - at least with every loyalty program I've ever been associated with.

There are segments of high utilisation customers who are VERY profitable. But they are not those who are points hacking, who are usually only chasing the 'headline' redemptions at the cheapest points acquisition rate.

Most genuine high value, high utilisation customers lose out in terms of program value to those points hacking.

There are indeed more and less profitable customers. That's not what I contested.

 

[Matt_01]

The archetype points whale is not a card churner. It would be a medium-sized business founder. Has the ability to direct somewhat north of a million dollars spend to one airline or another. Accrues a firehose of points through business card spend. Not necessarily a road warrior themselves, but may have several of them working for them. When they fly, almost always at the pointy end of the plane.

Genuinely a lot more valuable to a QF than a road warrior or a DSC-hacking P1.

This proposition finds a home for their points when they want to take the family skiing in Japan or to a summer break to Europe.

I was once your paragraph 1 type with some exceptions. I was a BIS traveller as were many of the staff and contractors and used AMEX to set up a deal with SQ to cut costs for international travel. From memory SQ wanted a minimum spend of $250K p/a, QF wanted $1M. The staff were happy as anything they booked was in J. Some of the the contractors (mainly the sole traders) were not so happy as I changed the company's expense reimbursement policy to words along of the line of 'expense reimbursement will be limited to the cost of travel provided by the company' I do not remember the exact words, the lawyers took care of this.

 

[p--and--t]

The archetype points whale is not a card churner. It would be a medium-sized business founder. Has the ability to direct somewhat north of a million dollars spend to one airline or another. Accrues a firehose of points through business card spend. Not necessarily a road warrior themselves, but may have several of them working for them. When they fly, almost always at the pointy end of the plane.

I have a friend in exactly this situation with millions of points but he warehouses a large proportion of them with AMEX so he can direct them where ever for a twice a year luxury holiday.