How can AMEX add value to the Delta Reserve card when / if Delta cuts perks?

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One of the questions that was asked this past week at the TES was how banks in general handle the cut of perks from a partner. Take for example the cut in Skyclub guest perk from the Delta Reserve card. Delta did not tell their credit card partner they were going to cut this and it was going to be reduced to just the card holder. It REALLY upset a bunch of people. Plus, there was the instant issue with marketing and changing what perks the card offered.

Now just what the card offers is an impressive list of features already. But let’s take a look and see some of the issues and what AMEX could do to help position this card better in the market without risk of Delta making unilateral changes that impact flyers and what I see happening next. First the current perks from the Delta AMEX Reserve card:

  • Receive 10,000 Medallion® Qualification Miles (MQMs) and 10,000 bonus miles after making a first purchase on your new Card.
  • Enjoy a Domestic First or Main Cabin round-trip companion certificate each year upon renewal of your Card.Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • 2x Miles for every eligible dollar spent on Delta purchases, and 1X miles for each eligible dollar spent for all other purchases.
  • MILES BOOST(SM) – Make $30,000 in purchases and earn 15,000 bonus miles and 15,000 MQMs each calendar year; make $60,000 in purchases and earn an additional 15,000 bonus miles and 15,000 MQMs each calendar year
  • MQMs earned through Miles BoostSM can be gifted to friends and family to help them reach Medallion® status.
  • Check your first bag free on every Delta flight – that’s a savings of up to $200 per round trip for a family of four.
  • Premium Travel Perks: Settle in sooner with Priority Boarding.
  • COMPLIMENTARY Delta Sky Club® Access for you when traveling on a Delta flight.
  • Receive UPGRADE Priority over non-Delta Reserve Card Members within Medallion level and fare class.
  • Annual Fee $450
  • Terms and Restrictions Apply. .

Again, when you take the time to look at it, an impressive list and many of these are the reason I still hold a Delta AMEX Reserve card to this date (and clearly as you can see from the photo ontop the non-Delta Platinum AMEX card as well). But what are the risks to each of these perks and could Delta or AMEX decide to cut more of them? Let’s see what I think:

Bonus MQMs with new card. I doubt this will ever go away. This is a MAJOR if not the most important perk of this card. Rather than going down, due to changes that have happened to this card, I could see this perk going up to 15 or 20k for a new card OR just as likely more SkyMiles being offered along side the 10k MQMs.

BOGOF cert. This has been a mainstay of the card for many years. Delta does make it hard-ish to redeem depending on where you live. I have not had a problem spending mine but I am a bit flexible and I know if prices are not the same on Delta.com with the cert applied and without to call and have them match it. I doubt this will go away or change.

2x on Delta purchases. It has been this way for a very long time and works with the other two Delta AMEX cards as well. Doubt it will go lower but I could see for this HIGH END card it going up and it needs to. 3x for Delta purchase would bring it up to what the non-Delta AMEX Premier Rewards Gold Card offers for tickets purchased directly on an airline website. This would be a SMART move and one that Delta would not be able to control as it is AMEX that is awarding the bonus SkyMiles for this purchase.

Bonus MQMs for spending levels each year. Just like the new card bonus offer, the MQMs are one of the ONLY reasons I keep holding the card. It drives me to spend on the card $60,000 each year. Without this perk I would have to consider dropping it and as you can see I have been with AMEX since 1999. I can not see this perk going away ever. Will it ever go up? I think this would be a smart move. If AMEX added another spend bonus at $90,000 it would move me and I am sure a great many others to KEEP spending on the card once we reached the $60,000 dollar level each year. Not expecting this, but it would be welcomed none the less.

First bag free. This is the same across the Delta AMEX family of cards. Not going to go away. However, could it improve? I think it could. If Reserve card holders could be offered, not just one free bag, but two, this would be one more reason to HOLD this card despite the $450 annual fee. Will this happen? Doubtful but it would be an innovative idea to position the card as a must have for those who often check a number of bags.

Zone 1 boarding. Again, the same across the Delta AMEX family of cards. Not going away. But, I would love to see it improved and why not. It would not cost Delta anything to offer such a perk in “real” dollar cost. Let Delta Reserve card holders board with PRE or premium members, that is, before ZONE 1 that the rest of card holders get by default. This would also be a way for Silver Medallions, who board with Zone 1, to board a bit sooner. I think this would be a great perk and again a reason for people to HOLD the card each year.

Skyclub access. I was, and honestly still am, just shocked Delta took away the privilege for card holders to bring a guest into the Skyclubs. I do not see this perk coming back as Delta has changed it for all cards and even setup the individual and executive ranks to sell more memberships to flyers. There is not much AMEX could do other than offer something like $100 or $200 in incidentals credit each year like with the non-Delta Platinum card. I do not see this happening but it would be a way to get some to HOLD the card long term when they fly with their +1 companions.

The medallion upgrade tiebreaker. I could see this going away sad to say. Personally I was shocked NOT to see it go away when Delta made so many changes this year. Then again, this perk NOT going away could be sending a message that this is such a perk that it could be a deal breaker for many to HOLD the card. It is for me one of the BIG reasons I keep holding at least one of them so who knows. I think cutting the perk would have a big negative impact on folks keeping the card year after year.

So those are the major points that AMEX talks about as reasons to get and hold the card year after year and my thoughts on each one. The only other big one that is missing from the list is the MQD exempt waiver with $25,000 in qualified spending and is again one of the BIGGEST reasons I HOLD my card year after year. I do not see this perk going away either as I think an end to this perk would drive a massive wave of cancellations. But I could see some changes happening. Like what?

I could see that ONLY this card allows you exemption all the way up to Diamond Medallion, that is, the other two Delta cards would, with $25,000 in annual spend, only exempt you up to Platinum Medallion. The Reserve card, with the same spend levels, would exempt you all the way to Diamond (plus the MQMs requirement as well naturally for each level). This would drive Diamonds, who for whatever reasons don’t seem to think they need the card, to get the card and HOLD it year after year. Doubt it will happen but it could be a good move by Delta and AMEX.

What else could AMEX change to drive new card holders and long term retention of card membership? What other perks would I suggest adding? I would suggest, in addition to the ones talked about above, consider these:

GoGo passes. At least to the business Reserve card like AMEX did with the non-Delta Platinum business card. 10 GoGo passes would again be a reason for so many flyers to HOLD this card year after year and provide more value for the membership fee.

Centurion club access. I can not begin to tell you the VAST number of people who have told me this should be a perk. Maybe it should be but like Skyclubs ONLY for card holders not for guests. I don’t see this happening but it would be a smart move in my opinion.

TSA premium line access. Not TSA PreCheck but access like those in 1st class. I really could see this happening as there is again no “real” cost involved and it would be a reason to HOLD the card. To me, I think having TSA PreCheck is just a no-brainer but that is me. Still, this would be a perk that differentiates the card from the “rest of the pack”.

I am not sure what else they could do than all of the above. Clearly the biggest issue is cost vs value. The card already provides so much value but to me the major loss of the guest privilege into the Skyclubs, now over a year ago, requires something to make this already good card “shine” and a reason to be chosen over all others.

What do you think. Do you like my ideas or hate them? Do you have other ideas that would NOT cost either company money but would add either real value or perceived value to this high end Delta AMEX card?- René
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Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by American Express.

 

 

 

14 comments

  1. You repeatedly site Delta as the instigator of dropping Skyclub guest access. EVERY time I complain to the Skyclub access control agent I get the SAME response, “That was American Express’s choice, it’s not Delta’s fault.” It seems that Delta has trained its employees to blame Amex for all perk cuts.

  2. You are optimistic that there will only be changes around the edges. Having just seen Amex and Costco divorce, I live in fear that DL and Amex may not be able to reach an agreement at renewal time. Visa and MasterCard seem to be launching a full assault on Amex at every turn and may strike a better deal (for Delta) with Delta just to harm Amex.

  3. @Don in ATL – Maybe you are right but they did reach agreement for a number of years going forward. We will see about next time but I would be SHOCKED to see Delta/AMEX partnership ever go away.

  4. >> Bonus MQMs for spending levels each year.
    I have wondered why they don’t just offer the MQM boost at every 30K level — not just 90K, why not 120K, 150K — why not encourage higher spending that way? (and certainly would help with the nuisance of requiring two DL reserve cards for at least 120K spend)
    [same issue with the UA explorer card, PRG, etc. — why limit the boost to a one-time bump, why not keep it at all multiple levels…]

  5. @skdelta – yeah I am not 100% sure either. I am sure Delta “dings” them hard for those MQMs and they want to encourage you to hold both a personal and business Reserve cards. Just a guess but probably a good one.

  6. Whether its AMEX OR Delta cutting the perks, the bottom line is I’m still paying the SAME $450 as I always have with less value!
    Last year I called and only got 10k miles for my “loyalty”, has anyone seen more mileage or even MQM’s from AMEX, as I know they cannot or will not wave any sort of annual fee’s. The retention Dept. claims all they can do is what the Marking department allows them from a “program standpoint”

  7. @Scott – You are incorrect about the not being able to wave fee. Also I have been offered 20 & 30k $kyRubles over the years but I do spend $60,000+ a year on the card fyi.

  8. @Rene – Thanks so much good to know. The woman who runs the AMEX DL Res. is a “very good at her job” thus she was calling my bluff last year. I enjoy my Medallion status without even getting on a plane.
    BTW I spend $60k as well just not a penny more, as the lack of additional MQM’s,

  9. >> Centurion club access. I can not begin to tell you the VAST number of people who have told me this should be a perk. Maybe it should be but like Skyclubs ONLY for card holders not for guests. I don’t see this happening but it would be a smart move in my opinion.

    I would love this as a perk as well. I was shocked when I was turned away from an AmEx club that although I’m spending $450/year annual fee you can’t get into an AmEx club. Not to mention the fact of how much they make a year off of my charges between my HHonors and Delta AmEx cards.

  10. You already get priority security with the Reserve card, it says so in the T&C.

  11. Just by opinion but here is my take:

    $450×4=$1800 in additional fees to AmExp/Delta. This is why they both cap the MQM bonus at $60,000 spend in exchange for allowing MQM transfers between cards so users can still obtain DM status – albeit at a cost of $1800 vs $450.

    As far as Delta blaming AmExp and vice versa, Delta raised the Skyclub access cost so high AmExp had not choice but to say NO. So Delta is technically correct – AmExp refused to bend over for us blame them.

  12. How about allowing the bogo cert to be used for international business, as well. Not that we’d be able to find availability at a reasonable price if they did….
    Otherwise, Centurion access is a no-brainer.

  13. @Barry – Interesting idea but I think a better “baby step” could be allowing the BOGOF to Hawaii? 😉

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