20 November 2007

Affiliate Marketing gone... Mad?

As an avid watcher of the contortions that various airlines go through to get you to be both loyal and a frequent purchaser of any old stuff... it is interesting to note what has been going on at the airlines lately.

As we all know Airlines are like lemmings. They do things often to replicate each other. So on the principal that any idea is a good idea if someone says so, then let’s look at some of the recent examples:

BA emiles store.

Following on from others BA has finally stepped into this arena. The first major player was probably Ryanair and therefore all the airlines thought they were made initially. However we see more often than not that Ryanair has become an airline to watch for innovation. With their stated goal of PAYING for passengers to fly on their planes - they do a very good - if somewhat simple job of merchandising as much as they can to their customers. So what of BA and the others?

I suggest you go and check out several of them:

Delta - Medallion Marketplace: http://www.delta.com/skymiles/use_miles/redemption_partners/medallion_marketplace/index.jsp

American Express - Rewards http://www.shopamex.com/

BA Miles estore. - http://www.ba.com/

as we have seen in recent years there has been a trend towards moving customers away from some of the best deals in the house towards spending the miles elsewhere. Given the current programs what we are seeing is a clear move to offload the miles "overhang". For an airline - miles are earned cheap and can be sold essentially at a profit to other. Thus the popularity of such programs.

However we should all be clear that there is another more sinister trend underneath this. That is that the miles are being devalued and a new higher price currency is replacing it. We have already seen the move away from the gold standard of a single price for a ticket. Now there are 2 sometimes even 4 values for a ticket online. Peak vs. off peak and promotional mile redemption rates. The exchange rate also now shows up in different forms. The popular exchange rate has been for quite some time 10,000 miles = $100 dollars of value. No more. Just look at the exchange rates and you will see what we mean. For example Amex offered recently (through December 11th 2007) 30% off miles required for a program. However the new mileage rate is actually quite higher than the old standard so this is not as much of a deal as it appears.

So you have been warned. For more information - check out Randy Petersen's web flyer (yes he of the unruly hair). http://www.webflyer.com/


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