Part 2: Delta’s Simplified SkyMiles: A Case Study in New Strategy Deployment

Part 2: Customers—Don’t leave home without them

When transforming from one business strategy to the next, make sure you take your most loyal customers on the journey.

While making the biggest transformation in the history of the SkyMiles Program, Delta has focused on the Business end and neglected the customer experience.  The tension point?  The new rewards program is tone deaf to the actual experience of many people that travel frequently.  This indicates the Delta leadership team is isolated from the lived experience of their most loyal customers, which doesn’t bode well for their new business strategy.  Will the new program ever get off the ground?  Here are the flaws I see as a 30+ year SkyMiles Member and elite medallion frequent traveler for both business and pleasure.

Business Travelers—

The new program does not take into account the challenges of being a road warrior or frequent business traveler.  Most people who travel for work must book their flights, car rental and hotels through company designated travel agencies (NOT Delta Vacations) and pay for the travel on a corporate credit card (NOT Delta co-branded AmEx).   In most companies, this policy is what enables authorizing the travel and reimbursement.  It is simply not up to the business traveler’s discretion to book through Delta Vacations or the cobranded credit cards. 

Until now, SkyMiles included status upgrades to reward road warriors for their ‘butt in seat’ equity.  The creature comforts, in addition to the routing and efficiency of the airline is what keeps business travelers loyal to an airline.  Business travelers are already under tremendous pressure from their employer to buy the most inexpensive flight.  Without creature comforts, most business travelers will become free agents vs. Delta loyalists.

Savvy travelers

It will not take long for savvy travelers to understand the trade off that is required when booking hotel and car rentals through Delta Vacations.  Many hotels offer loyalty programs that dramatically change the customer experience.  When booking through Delta Vacations, the traveler is not credited in the hotel loyalty program, instead the credit is made to their Delta SkyMiles account.  Delta is about to find out how loyal their customers are to Delta vs. the creature comforts and customer experience from the loyalty programs at hotels chains.   In my experience, even a new traveler figures out the compounding benefits of hotel program loyalty by the 2nd trip.  Once in the program, Delta will have a hard time pulling them away.

Recreational Travelers

Perhaps Delta is betting on attracting more recreational travelers and novices to the brand? Perhaps in a remote work and hybrid work environment, there will be enough new travelers to offset the frequent travelers?

What is the role of Non-Flyers?

Not clear what the benefit would be to non-flyers to join the program, but it is interesting to note that someone could never get on a plane and be rewarded in the new Skymiles Program. This strategy encourages customers to spend their way to elite status.  #keepcharging

Getting the C-Suite’s attention

On Monday, September 25, CEO Ed Bastian was asked questions about the new program at an Atlanta Rotary Meeting (highlights here).  It is clear, many current SkyMiles Platinum & Diamond Members have been contacting Delta to share their displeasure in the changes to the SkyMiles program.  Will the new program take off with an on-time departure of January 1, 2024?  It is unlikely to proceed as-is without significant disruption in brand loyalty.  Ed Bastian hinted as much at the Atlanta Rotary meeting. “No question, we probably went too far," Bastian acknowledged. "I think we moved too fast. And so we're looking at it now. I'm not going to preview any of the changes that we might make, but we will be making modifications and changes, because it really matters to us."

The question remains, is the C-Suite revisiting the inferred strategy of transforming from an airline to a travel & credit services company (see part 1: Business Strategy Analysis)? Or are they just adjusting the speed of deployment?  Time will tell.  But we do know, whenever transforming from one business strategy to the next, do not leave your most loyal customers behind.  Delta’s C-Suite would be wise to remember that loyalty is a mutual decision.