Finding, and Rewarding, Your Best Customers
Episode Description
Delta Air Lines' recently announced decision to base frequent flyer rewards on dollars spent rather than miles traveled is a better, more customer-centric way to distribute product benefits, says Wharton marketing professor Peter Fader. When it comes to customer value, Fader notes, "one of the rubrics we celebrate is the notion of RMF — recency, frequency [and] monetary value. [It makes sense to] reward customers on that basis." With just 4% of Delta's customers accounting for 25% of revenues, the choice seems clear — if overdue — Fader explains.
Brief Summary
Pete Fader discusses Delta's shift to a spending-based rewards program and its implications for customer value and loyalty.
Key points
- Delta's New Rewards Program. Delta Airlines shifts its frequent flyer program to prioritize spending over miles flown.
- Customer Centricity Explained. Professor Pete Fader discusses the importance of recognizing customer differences.
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Episode highlights
- Delta's New Rewards ProgramDelta Airlines shifts its frequent flyer program to prioritize spending over miles flown.“It's dollars that matter more than miles.”2:06Mar 10, 2014
- Customer Centricity ExplainedProfessor Pete Fader discusses the importance of recognizing customer differences.“Customer centricity is about a recognition of the differences across your customers.”2:16Mar 10, 2014
Tension
40/ 100Low tension
