How will the pandemic affect my loyalty program?

how loyalty programs will change after the pandemic

Sheree Davis wants to know how the pandemic will affect her loyalty program. Not very well, she suspects. And she’s right.

American Airlines recently extended elite status through Jan. 31, 2022. She might still have a chance to use that platinum card, she thought.

Davis acquired elite status through an American promotion last year, and planned to use it to avoid baggage fees and score an occasional upgrade.

But it wasn’t meant to be.

How will the pandemic affect your loyalty program?

Travel wasn’t happening for her this year, and it turned out that American extended elite status for only some of its frequent fliers. Davis wasn’t among them.

“I never had much of an opportunity to use my status,” says Davis, a retired piano teacher from Chicago. “I think it’s a little unfair.”

For many loyalty program members, the pandemic has been marked by a series of disappointments. Some travel companies have been slow to address the concerns of their best customers. And when they did, the changes were designed to maximize passengers’ spending instead of to lend a helping hand during a time of crisis. But the worst could still be ahead.

American Airlines says its extension is open only to passengers who earned their elite status for the 2020 membership year. According to spokesman Ross Feinstein, customers who were granted that status through a promotion aren’t eligible.

Is loyalty really a “two-way” street?

In a news release announcing the program change, Bridget Blaise-Shamai, the airline’s vice president of customer loyalty and insights, said the changes show customers that “loyalty is a two-way street.”

Davis sees it as more of a dead end. “Seems to me this is capricious,” she says.

“From a customer-relationship management perspective, that’s the last thing you want travelers to think,” says Michal Strahilevitz, a marketing professor at St. Mary’s College of California. “When your customers are traumatized, you want to reassure and comfort them — not penalize them for things outside their control. Airlines need to consider the potential lifetime value of their customers.”

Chances are, frequent travelers have already received emails from travel companies about their loyalty program status and points.

•Most domestic air carriers have allowed passengers to retain elite status for this year through the end of 2021. They’ve extended expiration dates for miles and companion certificates and waived fees for redepositing miles for canceled award flights.

•The major car rental companies have extended customers’ elite status and car rental upgrade certificates for another year.

•Hotel chains have agreed to let customers keep existing elite status through the end of 2021. They’ve also reduced the number of points needed to reach elite status and extended the validity of expiring points.

Some customer are happy

Many of these point-saving efforts and related refund policies have been well received by customers.

“All of the loyalty programs that matter most to me have extended my availability of miles and points without penalty,” says consumer service expert Chip Bell, co-author of “Customer Loyalty Guaranteed.” “They have also frequently communicated to remind me they are thinking about their customers and are concerned about safety.”

For example, in late April, National Car Rental and Enterprise Rent-A-Car, both owned by Enterprise Holdings, announced a straightforward plan to extend their elite tiers by another year. Enterprise Holdings also said it would roll over qualifying rentals and rental days not needed to get customers to the next tier, allowing them to carry their points balance into 2021.

“We want our customers to know we appreciate them and that their benefits will be there for them to enjoy when they are ready and able to travel again,” says Randal Narike, the executive vice president in charge of Enterprise Holdings’ loyalty programs.

“Pleasantly surprised” with loyalty changes

Tom Krieg, a retired sales manager from Tucson, says he was pleasantly surprised by how the pandemic affected his loyalty program. Southwest Airlines’ extended its program after the outbreak.

“Southwest went even further to demonstrate their appreciation to their loyalty members by actually adding miles to their frequent flier accounts, regardless of status,” Krieg says. “Given that I’m retired and no longer flying much, Southwest’s initiative is greatly appreciated.”

The most consistent complaint is about the timing of travel companies’ responses. Jim Wilson, who works for a law enforcement training company in Grapevine, Tex., contacted me in mid-March because he couldn’t travel. His preferred companies — American Airlines, Hilton and Hertz — didn’t respond to his queries. Two weeks later, his airline sent a noncommittal note. The company was “evaluating” what it was going to do for elites. He didn’t get details for a month.

But even the best airlines, car rental companies and hotels seem to be changing their policies with one goal in mind: to keep people hooked on their programs. Some of the most customer-hostile policies — such as mileage redeposit fees and the expiration of points and miles — will resume once the pandemic is over.

“Loyalty members, including those with the most elite status, will not forget or forgive gross injustices made by travel companies during this time,” says Nick Kamboj, a frequent air traveler and business consultant from Chicago.

People will remember how the pandemic affected loyalty

Mansur Khamitov, a professor at Nanyang Business School, says there are millions like Kamboj out there. “Once travel starts up again, all the hotels and airlines will scramble to get back into the game,” he says. “But people will remember those who were there for them during the crisis.”

Chuck Ehredt, chief executive of the Currency Alliance, which develops software tools for loyalty programs, says the worst lies ahead.

“The real test for loyalty programs will come over the next 12 months,” he says. “Will the points or miles retain their value? Or will travel companies dilute them to prop up the brand’s financial statements?”

In other words, travel companies extended their programs because of the pandemic. But when it’s over, they may change their award levels to make up for their generosity. That is, if they survive.

All the more reason to use your points and miles now — while you still can.

Posted in The Navigator Tagged , ,

Christopher Elliott is the founder of Elliott Advocacy, a 501(c)(3) nonprofit organization that empowers consumers to solve their problems and helps those who can’t. He’s the author of numerous books on consumer advocacy and writes weekly columns for King Features Syndicate, USA Today, and the Washington Post. If you have a consumer problem you can’t solve, contact him directly through his advocacy website. You can also follow him on Twitter, Facebook, and LinkedIn, or sign up for his daily newsletter.

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