The Critical Points: No More Fluff, Give Me the Bad News Straight
Since I began writing for TPG in 2015, I've lost count of the number of loyalty program devaluations we've covered. While there have been many — and at times it's easy to get discouraged — I'm not in the doom-and-gloom camp that many longtime points and miles collectors occupy. From my perch, life in the loyalty program world is still pretty good.
Most of the negative changes we've seen weren't surprises — they were typically too good to be true or to last. There's really only one aspect of recent devaluations that bothers me: the way these changes are frequently announced by the hotel, airline or credit card company.
Here are some snippets from recent press releases and program announcements which make it painfully obvious that a company is putting an overtly positive spin on really bad news (and none of which directly say what the program devaluation is):
“We’ve been listening to our members who want to be able to redeem more flight awards, so we’re making it easier for them to earn more miles and redeem seats on Cathay Pacific and Cathay Dragon,” said Stephen SY Wong, Chief Executive Officer of Asia Miles. “Whilst we are a diverse travel and lifestyle rewards programme, air travel is still a very popular way to earn and redeem Asia Miles. We want to make it more rewarding so that our members continue to see value in being part of the programme.”
The following programme enhancements (added as emphasis) will come into effect from 22 June 2018..."
Result of announcement: I estimate Asia Miles have lost 50% of their value.
"Flying Blue Reinvented: Even More Flexible
As of 1 April, we added more ways to earn Miles. Now we want to make it easier for you to spend. Starting 1 June, Flying Blue has 2 more ways to redeem your Miles: book any seat and Miles & Cash."
"Hyatt’s upscale select service brand designed for business travelers, today unveiled a new generation of hotels focused on three key areas: thoughtful design, driving value for World of Hyatt members and enhanced well-being experiences. Today’s announcement signals a move that responds to guests’ and owners’ evolving needs, while building on the success of the Hyatt Place brand."
(NOTE: This release never even stated that non-members and OTA bookings would no longer receive breakfast.)
Result of Announcement: After November 1, if you aren't a World of Hyatt member and you don't book direct through Hyatt, you no longer receive free breakfast.
Why Deliver Bad News As Fluff?
America in 2018 is a complicated place, and fair or unfair, one corporate misstep (or perceived misstep) can have a large impact on business. I understand the need to proceed carefully, but I don't quite understand the need to swing the pendulum so far to the other side that a company needs to obscure obvious devaluations as program improvements. I needed answers.
I've been lucky enough over the last few years to work closely with a few professional public relations firms and in-house PR employees at airlines, hotels and banks. I went to a few of these professionals who craft these kinds of messages for large companies — companies which you all know — to get their take on why bad news is delivered in such a manner as the above. They made some compelling statements, some of which I had not considered before:
"I think the answer is a bit complicated. It’s all about perception — and there are multiple stakeholders that come to the conversation and need to be protected. It’s possible that one company wants to be more open and share the rationale for a specific change, but it might reflect poorly on a partner. Whatever we communicate has to appease multiple parties."
"I don’t think it’s necessarily about hiding information from a customer or not being transparent. When it comes down to it, it’s business. There are just some decisions that don’t need to be shared outside of the company walls. And this goes for any industry, not just hotel/airline/credit card."
"Sharing some of those behind-the-scenes decisions publicly also gives competitors an advantage. They don’t need to know the business strategy of company X or where/how company X is profitable. So while we try to be transparent with customers, there is some proprietary information we want to protect from our competitors."
"With press releases and other media statements, we have multiple audiences we’re speaking to. What one audience may perceive as negative news, another may see more/different value. I think the goal is for companies to deliver the news and changes in a neutral way, and then focus as much of the conversation as possible on the new value and/or continuing good value of the product."
I had not considered these announcements hinting at proprietary information or providing insight to a competitor. Those are fair points, and they'll help me read future, negative news releases through a different lens. That being said, what I also took away from a few of these conversations is that the customer's opinion and reaction matter least.
How Do I Wish Bad News Was Delivered?
I understand it's not in the best interest of a company to title an email, "We're making bad changes" when an update is announced. There has to be some tact and professionalism in the delivery of a negative story. What is not required is the level of spin (see above examples). This approach makes me feel like a brand has so little regard for my intelligence that they think I won't understand what the news release says. Here's a quick checklist of what I'd like to see along with a real-life application to one of the aforementioned devaluations:
- Appropriate email and news release title — "We're Making Changes to Our Program"
- A synopsis of the changes with as much detail as possible, spin free — "On Nov 1, Hyatt Place guests who are not World of Hyatt members and did not book their stay directly through Hyatt.com or a Hyatt phone agent will not receive free breakfast."
- Appropriate lead time — "We understand these benefits are important to you and want to ensure you have appropriate time to take advantage before changes are enacted." I think three months is adequate, one week is not.
If you really want to go over the top in an extreme example (e.g. if you are changing top-tier elite status), proactively give those customers some form of compensation. "We understand these benefits are important to you and have put 10,000 points in your account as consideration." While this approach will never make everyone happy, it can still go a long way towards smoothing any ruffled feathers from angry customers.
I really do not envy the PR professionals who are charged with writing a message bearing bad news. It is essentially a no-win situation. Because of that reasoning, I have reluctantly begun to accept this rationale: if a company knows they are going to lose anyway, why not put an over-the-top positive spin on it?
That said, I value honesty and straightforward communication. I can't let go of the hope that one of these days, I'll get a message for the next program devaluation which skips the fluff and explains — in a tasteful manner — that an award chart must change or an elite benefit must go by the wayside. Should that happen, I'll appreciate the candor and accept the negative change with a more positive attitude. And I'll go out of my way to support any company which is the exception to the norm. Won't you?