Delta Just Announced a Change that Will Make People Very Mad. It’s Actually A Brilliant Move

Today, Delta announced it is making changes to its loyalty program, known as SkyMiles . Starting next year, it is changing the  amount of money you have to spend in order to earn its top-tier status levels. Or, put another way, earning status is going to cost more.

Specifically, it’s going to cost you about 33 percent more to earn Gold, Platinum, or Diamond Medallion status on Delta. At the top end, that means spending $20,000 to earn Diamond, up from $15,000 in recent years. 

Here’s how Dwight James, Delta’s S.V.P. of customer engagement and loyalty, explained it “These limited SkyMiles Program changes are a necessary step toward both preserving and improving the customer experience for our most loyal and engaged Members. Since we last made changes to the earn qualifications of multiple membership tiers eight years ago, the travel and loyalty landscape has changed considerably. We are continuing to invest in the customers who invest in us, so those Members experience the best of what Delta has to offer-;with our new Choice Benefits, our premium and transformed Delta Sky Clubs, and our expansion of the use of SkyMiles as currency throughout the journey.” 

Look, I think there are two logical reactions to this change. The first is probably the more common reaction, which is to say ‘uh, I’m never going to spend that much money to subject myself to all of the terrible things that come with travel so why do I care?’ That’s a perfectly reasonable reaction. Most people don’t spend that much on travel and don’t think this applies to them. I’d argue it does, and I’ll explain why in a minute. 

On the other hand, some people do, and those people care very much about the benefits that come with earning status. If you’re one of those people, there’s a good chance you’re pretty angry right now. 

On the surface this definitely feels like a downgrade. It feels like Delta is saying that your business just isn’t as valuable as it was before. There’s a good chance you’re probably feeling like Delta is taking away benefits from you because it will be harder for you to earn them. No one likes it when they feel like they’re about to lose something they’ve gotten used to. If you currently don’t spend enough to meet the new threshold, you might even be angry.

No one likes change, especially when it affects them personally. Also, no one likes it when something they’ve come to expect gets more expensive. That’s actually why this is such an important lesson–expectations are everything. By the way, Delta also said it’s expanding the benefits it offers its top-tier elite members, though I suspect that is a minor consolation for the people who are most likely to be angry.

Still, I think this is a brilliant move, even despite the fact a lot of people are going to be very mad at Delta. It all comes back to expectations. Here’s what I mean:

During the pandemic, Delta, like many airlines, had to come up with creative ways to keep its most loyal customers. One of those ways was to extend frequent flyer status. The idea was that if you were someone who traveled frequently, but stopped because of the pandemic, Delta would let you keep your status the following year. 

That makes sense: If all of those travelers lost their frequent flyer status–along with its perks–there would be less reason for them to be loyal to Delta once they started flying again. That would be bad for Delta, so it made it very easy to earn status, and the perks that come with it.

Besides, it costs basically zero to let someone keep their frequent flyer status when they aren’t flying, but it definitely makes those customers feel valued. And, the benefit is that when they start traveling, those customers are more likely to stick with Delta. 

That was good for frequent flyers. Delta even made changes to its program to allow you to accumulate more of the miles and dollars required to earn status. There was a point at which you earned 1.5 qualifying dollars for every dollar you spent on airfare. That meant you could essentially earn Delta’s highest tier (Diamond), by only spending $10,000. That’s a 33 percent discount. It also let you roll over all of your miles, making it even easier. 

As a result, you can imagine that Delta has a lot of Medallion members right now. That seems like it would be good news, but the problem is that there is a limit to the number of customers to whom you can provide a premium experience. 

For example, one of the perks of elite status–complimentary first class upgrades–is limited by the number of first class seats available on any given flight. You might have 20 to 30 percent more travelers waiting for an upgrade, but that doesn’t mean you have more upgrades to give.

That leads to frustration. If you’ve earned Delta’s top level of status, you expect certain benefits. If Delta can’t provide those benefits for any reason, that’s a problem. If the reason is that there are simply too many people, clearly there’s a disconnect. In a statement to Inc., James said the change isn’t specifically about “solving for a number.”  Instead, he says “we are listening to our customers and looking for opportunities to preserve and elevate the premium experience our Members expect. We want to continue to innovate the program so these valued customers experience the best of what Delta has to offer.”

I’m generally not a fan of company’s making anything harder, but sometimes friction is your friend. Sometimes it’s okay to say “not everyone can be our most valuable customers.” That’s not a fun thing to hear for a customer-everyone wants to think they are your most valuable, most important customer. And, on the one hand, you should absolutely treat everyone fairly, with respect, and as a valued customer. 

But value is a quantifiable thing, and the entire point of a frequent flyer program is to reward your most loyal, most valuable customers. As James said, Delta is trying to figure out how to better “invest in the customers who invest in us.” If you can’t reward them commensurate with their loyalty, you’re doing it wrong. Or, said another reason, if everyone is “elite” no one is.

The natural reaction here is to assume that Delta is making this change because it’s greedy and doesn’t care about its customers. I’m not sure that’s true. Certainly, there’s a big risk that a lot of customers who won’t qualify for a higher level of status will choose to take their business elsewhere. Delta doesn’t make more money by upsetting customers and watching them leave.