trippin_the_rift
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- Apr 2, 2006
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I think there's room for both.
Thought I might provide some insight from a loyalty program perspective; because, under the hood are many stakeholders, guidelines, and schemes which govern the program product.
QF could "reward" long term loyalty with extension of status either comp, or even by offering a challenge (eg: 200 SC in 90 days or something) or via points purchase.
So these are two different points. A comp status extension (when the user has done nothing to earn it) is NOT in Qantas' interests. There are Oneworld rules which govern how Qantas can dish out free status and levels which need to be adhered to.
Challenges make sense and these skirt around the Oneworld restrictions. There is, however, risk associated with this and therefore it's not standard practice across the major alliances (ie there are restrictions on a number of challenges, when, who can take them etc).
QF's objective is to maintain the revenue flow, so offering status extension via spending of points makes sense, or by offering a challenge (hotels do this) also means revenue coming in. A comp, from their point of view, does not ensure future income (but having said that if status is not used by virtue of spend by either points or tickets) then the cost to QF is minimal.
Qantas wants you to fly and not be part of ANY frequent flyer program.
Qantas Frequent Flyer wants you to take out new credit cards and generates <15% of their revenue from you flying. Quite frankly they don't care if you fly or not.
However, both need each other to coexist so the whole system remains profitable. It's like 1+1=5
Near the end of last year my status with a hotel chain was not even half that required to retain I though oh well I'll drop to what I earned... but they offered a challenge.. stay 3 more nights (rather than 20 or whatever I should have) and they'd extend. I grabbed that and stayed the nights. revenue for them and I kept the status. That's smart work by them IMHO and keeps me happy.
If QF had something like that (as this points thing seems to point to) then I think it makes business sense. With my extended hotel status I am more likely to book again with that chain this year to use that benefit... which I may not have done so much if I fell back in status.
For fun, let's pretend this was Hilton - who DON'T own 90% of their properties. Hilton Honors (the loyalty program) offers you a challenge which you accept and complete. For them, it means the hotels (which they might don't own), have to buy points from Hilton Honors, and since you've displayed behavior consistent with someone who frequently stays in premium brand hotels - Hilton Honors see this as an opportunity to fundamentally pimp you out to hotels in exchange for revenue (as points in your HH account). Remember the Hilton 'stop clicking around' campaign last year? (book direct and get a %discount) - basically Hilton Honors was forcing Hotels (again, which they don't own) to take a hit on the price, *AND*, pay for points on each guest back to Hilton Honors. A perfectly disguised scam to **** hotels under the guise of saving on OTA commissions. It's beautiful from a commercial perspective for Hilton Honors!
Many large hotel chains, like Qantas - have customer propensity scoring, which essentially is the % chance you're likely to continue transacting with their brand. Airline loyalty programs are reasonably sophisticated in this area (especially Qantas), and they have decades of data to learn from to find patterns and similar behavior among members. It's reasonably simple to them predict if you're likely to whip out the credit card and keep spending.
Really this kind of stuff shows an evolution (not the other "E" word) in QF's CRM systems and extra ways to a) produce revenue, b) keep loyalty and c) reduce some FF liability all in one.
One might argue it's the tens of millions invested into data science
In a perfect world - your points will either expire (while you remain active and earning more... not sure how that would work - but it's their ideal scenario), or, that you redeem points for something which cost the loyalty program nothing, like...maybe... status.
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