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Snapshot: Delta's Elite-Flier Program Is Now Even More Elite
Business Journal

Snapshot: Delta's Elite-Flier Program Is Now Even More Elite

by Justin Heifetz
Snapshot: Delta's Elite-Flier Program Is Now Even More Elite

Delta Air Lines is raising the bar for fliers to achieve elite status. Starting next year, customers in Delta's SkyMiles Medallion program will need to spend 20% more than they currently do to qualify. For basic elite members, this means buying at least $3,000 in tickets, up from $2,500 this year.

Delta has already begun marketing its program for 2015 on its website and via email, saying the changes will make it easier for customers to redeem their miles. Delta's website touts no more blackout dates and increased special seating availability, while pushing the exclusive perks of its uber-elite Diamond status, including Tiffany & Co. premium luggage tags.

But will raising the bar for elite status help customer engagement take off -- or leave regular customers feeling stranded and shut out?

"Engaging their most profitable fliers with perks, benefits, and a fundamentally different travel experience seems to make good sense, even if it means sacrificing the engagement of everybody else," says John Fleming, Ph.D., Gallup's chief scientist for marketplace consulting and HumanSigma.

Fleming, who coauthored the book Human Sigma, says coach passengers are just not that profitable to airlines anymore. Instead, "They simply pay the freight," he says. Other airlines are also shifting their programs to court customers who will pay full price or buy business-class tickets.

Says Fleming, "You have to reach a certain spending threshold to qualify for elite status. And each year it seems to get tighter."

But there's a larger issue here. Airlines and other companies spend billions of dollars each year on loyalty programs, and the results are "tenuous at best," says Ed O'Boyle, Gallup's global practice leader. According to Gallup's analysis, loyalty programs are effective at activating only a relatively small percentage of a company's customer base. The analysis also reveals extreme differences in participants' satisfaction with these programs and their perceived quality.

"It will be interesting to see what happens with Delta's program and whether it works," O'Boyle says. "But any company with a loyalty program should stop and consider the very efficacy of those programs in the first place."

Justin Heifetz is a writer and analyst at Gallup.

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