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JetBlue Jettisons the Loyalty Asterisk

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JetBlue Jettisons the Loyalty Asterisk
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By now you’ve seen the news that JetBlue will no longer expire miles earned by members of its TrueBlue frequent flyer program. As part of the announcement, one email I received from JetBlue made note that “When it comes to the fine print, we’ve heard you loud and clear, and we’ve decided to send our asterisk packing — no conditions or requirements.”

LoyaltyTruth is delighted to see how JetBlue framed its news, as the Loyalty Asterisk was one of the first topics we wrote about during 2008 when this site launched. JetBlue went so far as to title its official announcement on its web site “TrueBlue points won’t expire” with an asterisk that referred to the comment “No really”.  A little humor is refreshing from a big airline, but the announcement has weighty significance for all airlines as they scramble to reshape their FFP’s for the next generation.

The news was remarkable for two reasons:

  1. Not only was a fixed expiration removed (e.g. “your miles expire in 3 years”), but activity requirements were lifted as well. I guess this means TrueBlue members will never receive an email offering to swap their expiring miles for a magazine subscription.”
  2. The announcement came at about the same time that United Airlines changed its qualifications for Premier status to be based not just on miles flown, but on fare dollars spent. Delta had already taken this step early in 2013 and is still hearing criticisms from elite status flyers. The contrast between some airlines tightening rules and others providing more flexibility is notable.

The news also highlights the acknowledgement by the airlines that the increasing value of highly engaged FFP members trumps the potential benefit from mile breakage over time. Fans of conspiracy theories will posture that the airline will somehow deviously find ways to encourage mileage burn through sweepstakes, charitable giving options, or other means and the lifting of mile expiration rules will product a zero sum impact in the FFP financial results over the long run.

Taking the higher road, I would say JetBlue is buying into an industry trend with increasing momentum where organizations sponsoring loyalty programs realize that redemption events create more satisfied membership betting those satisfied members will shift future wallet share to the organization over time.

The final take-away from the announcement is to say that Loyalty Marketing is increasingly the domain of people with an affinity for quantitative skills as much as creative ones. Sure, tweaking business rules requires a certain level of creativity and the ability to cleverly package the communication of the message. At the foundation of any change however is the financial modeling and sensitivity analysis required to ensure that changes made now will be manageable 3-5 years from today.

Jettison the Loyalty Asterisk as an outcome of solid financial analysis and your loyalty program will get a long term lift. Making changes simply to meet competition or create a perceived edge with your members and you take unnecessary risk on board. In this case, I’m betting that JetBlue has done its homework.

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