Yesterday Alaska Airlines sent out a long email to its frequent flyers to apologize for miscommunication during the roll-out of its Saver fares, which are its answer to other airlines’ basic economy fares. I was genuinely impressed by the letter and saw other Alaska frequent flyers I know who felt similarly on Twitter.
So I was surprised to see that Rocky wrote a post this morning to complain that the letter was insulting. Rocky is entitled to his opinion, but that doesn’t mean I have to agree with him or leave it unanswered.
I believe that Alaska Airlines has done a better job than most with its design of Saver fares. They held out longer than anyone else, and they preserved some benefits like seat selection. More to the point, the recent letter explaining the origin of Saver acknowledges the importance of Mileage Plan members to the airline. I don’t know any other airline that has gone to this much effort to communicate with its customers on the issue.
Who Should Book Basic Economy?
There are at least three basic customer segments that help us understand the dilemma of basic economy: (1) those who shop on price alone and will book whatever is cheapest; (2) those who shop on schedule alone and will book whatever is most convenient; and (3) those who shop on service alone and will book whatever is most pleasant. Most of us are some blend of those three personalities, but the point is that the more you care about schedule or service the less you’ll care about price, etc.
If you’re a loyal Mileage Plan member and Alaska Airlines customer, you probably care about convenience and service. It’s rare for someone to be loyal to an airline that doesn’t fly when they need to travel. Or that requires lots of connections and has frequent delays. Service includes all the benefits of that status, including extra legroom, first class upgrades, and the ability to earn and redeem miles.
Price is important, too. There’s a breaking point where you just can’t afford to pay more for these things. But price is unlikely to be the most important thing to a Mileage Plan elite member.
Saver fares weren’t created for Mileage Plan members. That is the fundamental message of Alaska’s letter to customers. They were created for people who care about price more than the schedule and service. There is no easy way to tell a loyal customer not to buy something, but kudos to Alaska for trying.
Know What You Want before You Buy
If you’re an MVP Gold member and booking a Saver ticket, that’s not a product meant for you. You’ll probably be disappointed with the result. Alaska Airlines created this product for a different customer segment that it was losing and trying to save. Some elite customers bought those tickets, too, and complained. Alaska is just saying, “We don’t think you’ll be happy and don’t think you should book that again.”
Alaska has lots of different types of customers. Not every fare is going to satisfy every customer. It wrote this letter for elite members precisely because those are the customers most likely to be unhappy with purchasing this type of fare. It’s not even possible to send it to the infrequent customers who shop on price and aren’t Mileage Plan members.
To provide another example, I’m disappointed with my hotel room in Hawaii right now because the “ocean view” I paid for is primarily that of a parking lot and the side of a 10-story building. Am I upset that such rooms even exist? No. Someone is willing to put up with this for a discount. The hotel has lots of guests with different needs and preferences. Likewise, Alaska should offer Saver fares for the customers who want that particular service level.
I am only upset that the advertised features of my room are not a good match with reality. If I had known this is what I would get, I would have paid more for an ocean front room with an unobstructed view. Customers need to be informed so they can make good purchase decisions.
Alaska Airlines is giving us a lot more information than my hotel did. Instead of two words (“ocean view” or “Saver fare”), Alaska sent out a letter that explained, as politely but directly as possible, that Mileage Plan members should not book Saver fares and be happy with their choice.
