Monday, May 19, 2014

United's Mileage Plus and the Fuzzy Math of Customer Loyalty

So this morning was yet another United flight, one last one that I had already booked before deciding to avoid United in the future. This morning's flight was a rather full one out of San Jose. As you can imagine, my frustration with United's Premier customer experience has been such an active thread in my thoughts, it almost feels like that's all I want to write about. It's certainly cast an unhappy shade on my life for the past two weeks, with my overall frustration running at a low simmer.

Anyway, I was reflecting on their customer loyalty and comparing it to the customer loyalty experience that you have at the local grocery store, the drug store, or some of those other businesses that like to operate loyalty programs.

When you think about the loyalty experience at the local grocery store, typically a couple of things are going to happen. Stores often offer loyalty program customers sale prices on certain items. As you walk through the store, you can see the sale prices and quickly measure the benefits of participating in the store's loyalty program. Additionally, as you check out, you'll often be presented with information at the register and on your receipt -- you saved this much. There is a very clear reward for your participation in the loyalty program.

Similarly, with coffee shops and the 'free cup after you've bought 10 cups' style of program, you can opt in easily because your typically buying the coffee anyway, and there isn't necessary a requirement to trade identity or suffer in some way.

Contrast that with an airline loyalty program like United's Mileage Plus. Here, you have to log a set level of business with them, enough to be considered a Premier or higher level of customer. Once you hit this threshold, you are essentially entered into a lottery, with chances that increase based on your mileage for the year.

Flying out of San Jose this morning, there were over 50 names on the list of flyers automatically place in line for an upgrade. That means that, even if you're a loyal United customer and have logged many flight miles with the company, there is only a 15% chance that your experience will be upgraded. Otherwise, like me, you will most likely experience their base level of service. This means that approximately 85% of the people on today's flight came to the airport with elevated expectations from the business, but were not treated any differently than if they had not participated in the loyalty program in any way.

Imagine going to the grocery store, taking your items to the register, then only getting the sale prices, randomly, 15% of the time -- how would that affect your loyalty at that grocery store?

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