Bill Hanifin
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In the midst of checking a slew of emails, it would have been easy to ignore this short message from American Airlines:
“We would like to provide you with an important update to the American Airlines AAdvantage® program. Effective July 1, 2010, the Marriott Rewards program will no longer offer AAdvantage miles for stays at Marriott hotels. All qualifying stays at participating properties completed by June 30, 2010 will be eligible to earn AAdvantage miles. It is also important to note the final date to convert your Marriott Rewards points to AAdvantage miles will be June 30, 2010.”
The news registered on several levels. As a consumer and member of both programs, I was disappointed. From a business standpoint, I immediately began to think through the reasons that motivated the end of this alliance between two big travel brands. From a social media point of view, I was not surprised by the immediacy of reaction from frequent flyers but was amazed at the nature of fingerpointing taking place.
I’ve said it myself – establish a loyalty currency in the market with widely recognized value and liquidity and a sponsor’s loyalty model will be turbocharged for profitability. Advocacy aside, my take is that “Rewards as a Business” (the sale of miles to third parties) has its limits and can be jeopardized if not managed carefully.
There are two cautions worth noting:
- Remember the importance of “liquidity”. The most recognized currency in the world isn’t worth much if it can’t be redeemed easily and for items of high perceived value. The liquidity of airline mileage rewards is an obvious challenge as consumer cynicism over redemption continues to erode the perceived value of frequency flyer miles.
- How much is too much? There is a threshold at which the price of the miles to partners becomes so expensive that the partner is forced to consider alternatives for investment of marketing dollars as well as which brand they are promoting (mine or yours). It’s quite possible that Marriott was presented a cents/mile price that crossed this threshold and decided to focus on its own brand and points currency to gain additional leverage.
It’s unfortunate that frequent flyers are directing their ire principally at Marriott when it just might be that American Airlines is equally responsible for this divorce.
Marriott would be wise to launch some new travel related promotions around the June 30 deadline that deliver great value and make travellers forget all about AAdvantage miles, just like contrails evaporating in the sky.
