Are you feeling loyal?
Up until about March 2020, I was a typical software industry road warrior, possibly a bit of an overachiever — logging some 250,000 miles per year on American Airlines — and spending more time with Marriott than my family.
This past year, all my travel was, well … zooming around, with zero miles and nights used. While my kids traditionally did an admirable job of using up all my airline and hotel points, I still had around 750,000 banked miles, which I was recently notified were in danger of expiry due to no activity in my account.
Fortunately, American told me about a number of ways I could log some activity, including just buying stuff I barely needed through the American Airlines Mall. With 750,000 miles at stake, the cost benefit of doing a little shopping was overwhelmingly in favor of buying some stuff or, more to the point, enlisting my daughters’ expert shopping help in keeping my account active.
What transpired was a series of overlapping loyalty benefits that leaves me wondering if today’s loyalty offers are really on target and questioning if the unlucky retailer made even a few cents on the transactions.
Here’s a breakdown:
- $100 purchased, 200 miles awarded, value $4 = four percent discounted
- Paid by Visa, three percent cash back plus two percent extra special and loyal preferred customer = five percent discounted
- Free shipping — say, a $6 value = 6 percent discounted
- Bypassed the “get another 10 percent off” offer by not giving up my email = 10 percent discounted
- Skipped joining the retailer loyalty program = two percent discounted
- Total “loyalty discounts taken” = 15 percent; discounts bypassed = another 12 percent
In the end, I had a happy daughter who expertly saved my 750,000 airline miles. I probably could have financially stressed a local restaurant with this chain of events (and further applied a coupon to the equation) and had dinner with my wife instead.
And yes, the product I bought was on sale, so this wasn’t a margin-rich transaction to begin with. In the end, I didn’t feel any greater attachment to anyone in this elongated loyalty chain and really wondered if the retailer in play would have been better off sending me a check for $5.00 to stay away.
DISCUSSION QUESTIONS: Do you think the point of today’s loyalty programs has been lost in today’s elaborate chain of marketplaces, referrals and rewards? At the end of the purchase chain, who is really subsidizing the purchase and are retailers unfairly disadvantaged by picking up all the costs that precede the purchase?