Qantas surveying members about spend-based status attainment

[Boeyn]

They would have done spend based points earn first. No way that’s coming this year.

I definitely agree that after making the first changes to points earned from flights in almost five years, they aren't going to move to a spend-based points earn methodology anytime soon.

But I don't see why they would have to do spend-based points earn first, before they did spend-based status earn. The fact that other airlines might have done it in that order doesn't mean QF has to follow.

From a PR perspective, I think it makes sense to bifurcate the announcement of any nasty changes to QFF into "points earn/burn" and "status" buckets. The universe of customers who care about the former is much larger than the latter. Assuming any spend-based status earn program isn't as contemptuous as BA's was, I suspect it would get significantly less negative media if it was announced as a standalone 'enhancement' in a few months than it would have gotten if it was part of yesterday's changes. I don't think the mainstream media would be nearly as interested in covering changes to QFF status - the overwhelming majority of Australian's don't have it, and therefore don't care.

Plus, staggering the announcement of changes gives QF the opportunity to administer us with a spoonful of sugar to make the medicine go down. I bet there's one hell of a Classic Rewards seat release planned for the week of 24 February...

 

[Dmac59]

I bet there's one hell of a Classic Rewards seat release planned for the week of 24 February...

Or a DSC announcement.

 

[elanshin]

Or a DSC announcement.

Or both

 

[drron]

I definitely agree that after making the first changes to points earned from flights in almost five years, they aren't going to move to a spend-based points earn methodology anytime soon.

But I don't see why they would have to do spend-based points earn first, before they did spend-based status earn. The fact that other airlines might have done it in that order doesn't mean QF has to follow.

From a PR perspective, I think it makes sense to bifurcate the announcement of any nasty changes to QFF into "points earn/burn" and "status" buckets. The universe of customers who care about the former is much larger than the latter. Assuming any spend-based status earn program isn't as contemptuous as BA's was, I suspect it would get significantly less negative media if it was announced as a standalone 'enhancement' in a few months than it would have gotten if it was part of yesterday's changes. I don't think the mainstream media would be nearly as interested in covering changes to QFF status - the overwhelming majority of Australian's don't have it, and therefore don't care.

Plus, staggering the announcement of changes gives QF the opportunity to administer us with a spoonful of sugar to make the medicine go down. I bet there's one hell of a Classic Rewards seat release planned for the week of 24 February...

The highlighted words suggest if you are right then it doesn't matter when the spend part is announced.
On last nights 7 news the QF changes were announced as positive changes for frequent flyers with millions of premium awards to be released. So just maybe QF didn't want to muddy the waters just now but later on. I suspect though about this time of next year when many are on holidays

But whether it is 6 months or 5 years very likely it will happen.

 

[Gremlin]

They would have done spend based points earn first. No way that’s coming this year.

I disagree. Program changes of the like we've just seen land take months and months of behind the scenes work prior to an announcement like yesterday's one.

They would have been very close to sign off on this work when Velocity's changes were made public.

Qantas don't operate in a vacuum and I'm sure would have wanted to move to spend-based status for ages. Having said that, they hold the dominant position, and you wouldn't move to spend-based if it meant giving the V team a free competitive kick along. But VFFs announcement means that QFF can now do it without destroying their own relative competitive advantage. But again, that will take some time to work through. Probably six months of work internally before they land on exactly what it'll look like, hence the 'more to come in 2025'.

I'm sure they went back and asked the question whether to hold off on the changes they were already working on (that we've seen go live). It's a sensible decision IMHO to push these through as they'll improve margin without too much downside, even if there is more to come.

 

[justinbrett]

I disagree. Program changes of the like we've just seen land take months and months of behind the scenes work prior to an announcement like yesterday's one.

They would have been very close to sign off on this work when Velocity's changes were made public.

Qantas don't operate in a vacuum and I'm sure would have wanted to move to spend-based status for ages. Having said that, they hold the dominant position, and you wouldn't move to spend-based if it meant giving the V team a free competitive kick along. But VFFs announcement means that QFF can now do it without destroying their own relative competitive advantage. But again, that will take some time to work through. Probably six months of work internally before they land on exactly what it'll look like, hence the 'more to come in 2025'.

I'm sure they went back and asked the question whether to hold off on the changes they were already working on (that we've seen go live). It's a sensible decision IMHO to push these through as they'll improve margin without too much downside, even if there is more to come.

There’s a very eloquent article written by @Mattg stating why this is unlikely to be the case.

As I’ve said before Qantas would be worse off with spend based status, as long haul Y which has razor thin profit margins would give as much status as a hugely profitable domestic J flight. The current QF status system is incredibly complex and I think is exactly how QF likes it.

 

[Supersonic Swinger]

There’s a very eloquent article written by @Mattg stating why this is unlikely to be the case.

As I’ve said before Qantas would be worse off with spend based status, as long haul Y which has razor thin profit margins would give as much status as a hugely profitable domestic J flight. The current QF status system is incredibly complex and I think is exactly how QF likes it.

The article is identified as an opinion piece and not written from the perspective of the manager of a business division running a loyalty program.

Like the argument that "status credits are already a good proxy for the amount of money you've spent": whether you pay a $99 E-Deal or a $329 regular fare for a Discount Economy SYD-MEL, you still get 10 SC and the same amount of points. Similarly, you get 180 SC and the same points for SYD-LAX in Discount Business whether you pay the regular fares available or the sale fares which can be up to 50% cheaper.

Gremlin - fascinated to know what loyalty business you work for, obviously you can't reveal who, but do you have links to any publicly available think pieces or conference presentations talking about revenue based systems which the boffins in Qantas Loyalty might be basing their analysis on?

 

[Lynda2475]

Ah no, the cheap discount fares are sale fares and generally less SCs that the regular fare or flex fare. Earn tables distinguish between discount business and business.

 

[elanshin]

The simple answer right now for any business manager is study BA. They're a lot more aligned to QF than Velocity is in terms of market position, loyalty and handcuffed members.

Study what the backlash is like, what the fallout means and then assess.

 

[Supersonic Swinger]

Ah no, the cheap discount fares are sale fares and generally less SCs that the regular fare or flex fare. Earn tables distinguish between discount business and business.

I have paid $4800 and over $8000 for Discount Business and each time received 180 SC

 

[justinbrett]

I have paid $4800 and over $8000 for Discount Business and each time received 180 SC

Think you got ripped off spending 8K on discount business.

 

[Sabot]

There’s a very eloquent article written by @Mattg stating why this is unlikely to be the case.

As I’ve said before Qantas would be worse off with spend based status, as long haul Y which has razor thin profit margins would give as much status as a hugely profitable domestic J flight. The current QF status system is incredibly complex and I think is exactly how QF likes it.

Forget about long haul Y, who's going to actively decide to fly Qantas Int. J when not incentivized to do so? They aren't even the 3rd best option flying in and out of Australia and are generally the most expensive.

 

[Supersonic Swinger]

Think you got ripped off spending 8K on discount business.

Last minute business travel, regular was close to $9k and flexible was $10 (Delta and United at similar levels). $4.4k was a sale fare for a trip which could be booked in months in advance.

The fare which I'd prefer to book as a personal traveller 'gamifying' the system is not the one the QF Loyalty number crunchers would want to reward the most. Which is why I suspect QF is looking at revenue based, whether we like it or not.

 

[justinbrett]

Last minute business travel, regular was close to $9k and flexible was $10 (Delta and United at similar levels). $4.4k was a sale fare for a trip which could be booked in months in advance.

The fare which I'd prefer to book as a personal traveller 'gamifying' the system is not the one the QF Loyalty number crunchers would want to reward the most. Which is why I suspect QF is looking at revenue based, whether we like it or not.

So right now they’ve got you to spend way too much on a discount earning ticket. Some would have just spend a bit extra to get the higher status (and better fare rules).

In spend based earn they’d have to give you extra status, closer to a fully flex fare, and there’s no real incentive to spend more. So QF is worse off.

And of course this is ignoring my previous example which will be much more common - pax travelling on discount Y long haul which barely covers the taxes and fuel, yet they’ll be given status close to a return J domestic flight.

I just can’t see it working and if they do it, a lot of people are going to be better off. But not those who make the most money for QF.