Dear customer, you are downgraded!

I recently received a mail from my favourite airline Jet Airways, that I have been downgraded! I am a member of their loyalty program for years now! And this is not the first time this has happened to me. It also happened in 2001 and 2002 too.

The letter read - "...since you have not had enough flights with us, you will be downagraded. Our Dynamic Tier Review (DTR) formula, unique to Jet Airways - DTR is an award winning, multi-period and multi-criteria-based tier review. It has no precedent anywhere in the world. With DTR, upgrade to the higher tier is quicker and tier renewal is easier. The DTR evaluates a member's tier based on Tier Points and Tier JPMiles earned....."

I was disappointed. As a customer, it did not matter to me if the DTR was award winning for Jet Airways! It surely did not work for me ( the downgrade letter was templated too with such high sound words and sentences!). 

It made me think about the structure of current loyalty programs across the world and their relevance when loyal customers like me are click away from the next best offer!

Here are some questions that came to my mind:

1. In a year of recession and tough 2 years for business, I was suprised how the DTR did not take care of this business environment. I did'nt fly so much as Jet would have wanted. So, Jet's view of my loyalty is transcational - fly more( at full price or premium prices and get rewarded more!). I too will behave the same way in the future, I presume. Question #1: Can't loyalty programs be flexible, adapt to new environment, and why reward only transactional loyalty?
2. Given the unsettling business environment that it was over the last 2 years, why would me even as a "fiercely" loyal customer, travel in Jet if the fares were not competitive. Finally, if there is no value, loyalty cannot be bought with points. Question # 2: When there is a challenge of intrinsic value in the product,  will loyalty progams deliver - No. It is better to focus on the product rather than upset customers. Companies must know, customers will move on in such circumstances!
3. I have been surprised with their loyalty program  not paying attention to customer experience, in spite of being a Citibank-Jet Platinum card member. Every time redeeming their upgrade vouchers was a pain. The little travel that I did in these 2 years, whenever I presented the voucher, I was told it was applicable only on full price tickets! Funny, not sure what world they were living in. Question # 3: Do companies that run loyalty programs pay attention to  such little details that affect customer experience? They took trouble  a few years back to invite me to their co-branded card, but forgot to look at my spends and credits to give me waivers at such tough recessionary period.The bank has no clue, whatsover.
   

Loyalty programs are still in their 1.0 version.  Imagine a product that has not changed for 25 years! They still are in an old world order - "spend with us to earn rewards". Sometimes they have to recognize the value that customers get when they are out shopping for options, may not justfiy the reward they earn everytime if they have to stay within these products/brands. They need to transform given the new environment and options in front of customers.

Customer seek value and surely are willing to pay premium for loyalty but recognition, surprises and instant gratification will need to be weaved into these programs - on the assumption value needs to be earned in the customer's mind & wallet.

Rest assured, this is not a rant but earnestly these are thoughts that I had in my mind and coming out of experiences I have had with such programs over time.  

 

 

Comments

[harikumar]

Swami. Well said. I have personally experienced what you are saying with Jet and other airlines;
With Jet, being upgraded TWO levels within 1 year when i had a travelling job within india and not being able to use their upgrade vouchers ( I have 14 unused vouchers half of which has lapsed ) and I will be dowgraded in Feb 2011. Care a damn....

When i was travelling overseas extensively ( 2003 to 2007), i was in the highest status in Lufthanza, BA and AI. now i am back to a normal traveller in all these and rebuilding points. You bet, when i fly overseas these days, the simple criterion is which airlines offer the best value and price and not how many points gets added.

[Virgovim]

It's funny that u suddenly find yourself writing this only after you have been downgraded :) Wake up to reality friend - why would any company (forget Jet) base their loyalty program on anything OTHER than a transactional basis?? Your own behaviour is transactional is it not? So why would a company behave differently? Let's be fair abt life (if u ran your company you would do the same by the way...) - if u spend more, you get more. It's as simple as that. The more a company engages you on a non-transactional level (i.e. give u freebies, lounge access, invite you to plays, dinners etc etc etc) the more they will have to COST this into their ticket prices. Remember the old (but gold) adage of of there being "no free lunch"? So you didn't fly in the last 2 years as much as you used to; but you expect Jet to continue to carry u in an elite status?? For what? What have you done for them that they shd do this for you? When the going got tough, you pulled out, but u expect them to continue to carry u? Not fair isnt it? By the way, they chose to downgrade u in 2011 :) Not in 2009/2010 - which is at the height of the crises. So give them a break. Like any other company, they are in the business of making money, not giving it away in return for no loyalty.

[Eron Kar]

While i don't understand what DTR does or does not to upgrade/downgrade a loyalty customer, i do know from being involved in some other loyalty programs of some global airlines, that a lot of other factors do come into play as a deciding factor, other than pure transactions. Besides economic factors like recession,loyalty consumers could and do go into periods of hiatus for N number of other reasons and this is true in varying degrees, not only of airlines but for other categories as well. During these periods, not only are transactions low, but they might drop to 0.An intelligent decision making process would try to understand and predict the nature,period and frequency of hiatuses during a customer lifecycle and not base it only on near past transactions;then figure out the probability of recuperating,in subsequent post hiatus transactions based on other indicators like socioeconomic,quantum and nature of past transactions etc..This decision making process although tough, once implemented, can really weave in the recognition,surprises and instant gratification you so desire.