Delta Airlines – The Counterpoint
We’re launching our new column – The Counterpoint. The core idea of this column is to question, investigate and often challenge commonly held beliefs in the miles and points space. The objective here is to get a discussion going on various topics about all things travel. In the comments section, I would love to hear your feedback or have any of your questions answered.
Delta Sky Miles
Delta has been a subject of intense discussion and scrutiny over the last few years, particularly because of the devaluation of their Delta Sky Miles program. To rub salt into the wounds, Delta also removed award charts, basically moving to a dynamic pricing model. In short, what it means is that Delta can charge you as many or few miles as they want, irrespective of cabin class, route or time of the day/week.
Delta Flash Sales
Delta’s flash sales have been creating quite a lot of buzz off late. They’ve been covered in some detail and quite rightly. In this post, I’ll outline why I humbly disagree that these are ‘deals’ in any way whatsoever.
Please don’t get me wrong, they can be of value and present a great opportunity to redeem Sky Miles. However, I still think that there’s a critical point that missing in a lot of the coverage around these flash sales.
There are a few reasons why I think these flash sales are much ado about nothing.
Delta still has the power
The core of a strong loyalty program is that it encourages loyalty by giving the customer control over redemptions. Delta’s flash sales do exactly the opposite. For example, let’s say that I have a stash of 100,000 Delta Sky Miles. Given the arbitrary way in Delta prices Its award flights, I may end up paying 40,000 miles for a flight from LAX to SFO in economy. This is primarily due to the disappearance of the award chart. Coming back to the central point, let’s analyze why these Delta flash sales aren’t really of much value.
Delta tells you when to travel
Delta’s systems analyze demand and supply and then throw up specific times when you can travel. If you have a lot of Delta miles but don’t have the power as a consumer to decide your travel dates, then I’m sorry, Delta’s winning this round too.
Delta tells you where to travel
With no award charts, Delta again tells you where to travel. Visiting family for Thanksgiving using Delta miles? Sorry, but Delta’s computers will decide how many miles it will cost you to do that.
Premium cabins are out of reach
Gone are the days when you could earn a mountain of miles and use them for that spectacular once-in-a-lifetime redemption. Delta’s mileage pricing means you’re out of luck and stuck in coach more often than not.
Pricing is ambiguous
Delta still retains the power to price award tickets. Imagine walking into a store with some cash in hand and having no idea what each product costs. While Delta may advertise a sale as a flash sale, how much they price the award tickets for still remains in their hands. Again, the absence of an award chart enables them to do so.
Here’s what this really is about if you look at pricing theory. Delta is playing mind games. After obliterating award charts, they’ve ensured that customers have no access to information about pricing. Therefore, pricing is extremely opaque. By introducing ‘flash sales’, Delta is trying to to make you think that these flash sales are actually of great value. However, that’s primarily because without those sales, Delta’s miles are hardly of any value!
This trick is similar to what a lot of retailers do. They increase the MSRP of a product in store and then offer a 40% discount. They’re essentially offering you the product at the same or higher price. However, by saying “40% off” and by stating a higher reference price, they’re tricking your mind into believing that it’s a discount when it actually is not.
The Pundit’s Mantra
There’s still value to be mined from Delta’s flash sales. However, you should be able to find the needle from the haystack. In my opinion, a sound loyalty program is primarily one that offers the customer flexibility in using options for redeeming his miles. Secondly, pricing is transparent and isn’t subject to unreasonable fluctuations. Thirdly, it transfers the decision making power for redemption from the business to the customer. Delta’s flash sales don’t tick either of these boxes.
Has your perception of Delta miles changed because of these flash sales?
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