Will Qantas ever offer Lifetime Platinum Status to people earning +20-30K Status Credits?

I will apologise in advance – this is a likely to be a bit of an epistle (I have started this on QF81 so have a few hours to kill and after a Shiraz or 3 here goes…) but PLEASEEEEEE read to the end and act!

This is not my first attempt to articulate the below to Qantas, but yes I will give up and simply revert to my practice of only traveling enough on Qantas to maintain my Platinum status and then building loyalty with other airlines after this attempt if it again falls on deaf ears ☹ I see the value of Platinum but do not understand or value the proposition of Platinum One particularly given that it does not build toward any ‘lifetime Platinum’ value proposition recognised by Qantas.

My gripe – Qantas has lifetime silver, lifetime gold, but no lifetime platinum ☹ Yes, I know you are part of a partner program and to some extent governed by the group rules and the rest of the airlines may obviously not understand the importance of having this grade or the connection between loyalty and lifetime value but hey, I am really hopeful Qantas may wake up about now and decide to be just a little radical and put in place the mechanism that can ‘milk the gravy train’ (and satisfy among others, a whinging kiwi)!

So, let’s start with what the term ‘LOYALTY’ means …

There are obviously lots of definitions and most actually miss the important ingredient – the connection between loyalty and emotion! Consider who you yourself are loyal to. Surely you’ll answer family and friends. Why? Because of the emotional bond you have with them. Your family and friends can do things you may not like, but you stay loyal because of that bond. The same applies with customer loyalty. To prompt customer loyalty you must build an emotional bond with your customers. Qantas traditionally has been reasonable and I would venture to say in parts of the world even good (well I say that based on my kiwi experience from being on the end of the old JetConnect – Mikey Gulliver and his cabin crews interactions for the past 20+ years – although having said that Mikey isn’t that old!) at building this – you kind of get the physical, emotional and value elements of an experience being delivered as one cohesive experience.

I think you are also blatantly aware that it is considerably cheaper to retain a customer than go get a new customer (and customer experience management is the most cost effective way to drive customer satisfaction), and that your profit largely comes from your business frequent flyers (sorry not looking to specifically remind you on how to ‘suck eggs’ but so many business do forget the basics). Not only do loyal customers ensure sales, but they are also more likely to purchase ancillary, high-margin supplemental products and services and they buy without too much focus on price. Loyal customers reduce costs associated with consumer education and marketing.

It is worth also mentioning the difference between customer loyalty and brand loyalty – because it is possible to have one but not the other, however if you have both then it is more like 1 + 1 = 3 (rather than simply 2). So customer loyalty tends to be based around how a company can leverage overall purchasing power of loyal customers, while brand loyalty is all about how ‘us customers’ perceive the brand ‘Qantas’. Brand loyalty is much easier to maintain once established (basically for an airline, just don’t fall out of the sky and we will forgive, you see even if I was on a flight (which I was) that got as far as about to turn onto the runway to take off when you grounded the airline to only return to the terminal and I needed to get to Singapore that day – I forgive the brand, or an unfortunate incident with a Rolls Royce engine on an A380 taking off from Singapore and needing to turn back when over Indonesia – we forgive the brand, or landing in AKL at midnight and not being able to get off the aircraft for an extra ¾ hour until a body was removed because he had passed away in-transit – we forgive the brand. Am sure you get the idea!

So now we get to the concept of Customer Lifetime Value. Customer lifetime value can also be defined as the monetary value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship. Customer lifetime value is an important concept in that it encourages firms to shift their focus from quarterly profits to the long-term health of their customer relationships. Customer lifetime value is an important number because it also represents an upper limit on spending to acquire new customers. Customer lifetime value differs from customer profitability (the difference between the revenues and the costs associated with the customer relationship during a specified period) in that Customer Profitability measures the past and Customer Lifetime Value looks forward. As such, Customer Lifetime Value can be more useful in shaping managers’ decisions but is much more difficult to quantify. While quantifying Customer Profitability is a matter of carefully reporting and summarizing the results of past activity, quantifying Customer Lifetime Value involves forecasting future activity. So in summary Customer Lifetime Value is The present value of the future cash flows attributed to the customer during his/her entire relationship with the company. There is then a whole calculation around net present value etc. which I won’t look to send you to sleep over here! Save to say, Customer Lifetime Value is a crucial value to understand and more importantly it is crucial to understand the actions that can grow Customer Lifetime Value and what that cost is versus the added Customer Lifetime Value.

Now I obviously don’t know ‘the numbers’ within your business (although if you need help on working them out – this is the kind of stuff as educators and supply chain consultants we thrive on and could easily help you with J) however I would venture to suggest that the cost of having a ‘Lifetime Platinum’ offering is significantly below the benefit of growing and maximising ‘return on loyalty’.

Zzzzzzzzzzzzzzzz Oops – the 4^th Shiraz must have kicked in as never finished and sent

So, continuing the story, I’m your average passenger who travels quite a bit – I enjoyed ‘Gold status’ for a few years , then traveled enough to attain Platinum and guess what I now make sure I maintain Platinum (I see the value and benefit to me personally). In the process you took me on a journey of ‘protecting my status’ – the ‘Lifetime journey’ – a great concept but it ends at Gold ☹, I got Lifetime Silver, then Lifetime Gold, but then fell into a bleak hole of where next? - which frankly ‘pisses’ (technical term) me off!

To perhaps try and put some numbers around this: If Qantas has

• Between 125 – 150,000 Lifetime Silver members
• Between 50 – 75,000 Lifetime Gold

Then potentially it may have between 10 – 15,000 Lifetime Platinum (if such a category existed ☹)

Now, because there is no added benefit to me (i.e. moving toward Lifetime Platinum) I deliberately book flights each year beyond maintaining my Platinum status on airlines other than Qantas (I have actually been doing this for a couple of years now) – my experience in the past year is around 18 other journeys at an average $340 per sector = $6,120 p.a. not booked via Qantas – I guess I will continue this for maybe the next 8 – 10 years (admittedly am 61 but don’t actually plan on retiring any day soon but rather am finding more and more reasons to have global business interests). If 20% of the potential customers who could target ‘Lifetime Platinum’ have my approach then that is $15m revenue a year that Qantas is missing out on ☹ - or assuming a 10% margin $1.5m profit p.a. you are missing out on for the very little cost of having a Lifetime Platinum status and continuing to build and benefit from Customer Loyalty!!! 😊

The irony of all this is that I am arguing for something that by the time I attained a Lifetime Platinum I will likely be traveling around the airport pushing a Zimmer frame (so in reality not traveling a lot) but imagine the extra revenue that you could have extracted from me in the mean time 😊