The above is a twitter interaction with me and reader “BF” about the expanding policy of Delta offering for you to buy “premium” drinks in the clubs with your SkyMiles at 1 cent each in value, that is, if you have say splurged for a $48 dollar bottle of Champagne, as recommend you do by the Delta management in the latest quarterly conference call, you would then spend 4,800 SkyMiles for this bubbly wine.
Well, gosh, that seems like a good deal right? I mean, I really value a $50 bill in my wallet! But 4,800 SkyMiles, uh, what are those worth when it is so hard to find a Delta award ticket nowadays (let alone the hidden award charts for crying out loud).
But when you stop and do the math, that is, Delta is CLEARLY telling us that we should understand that a SkyMile is just worth a penny, that hurts and can have much larger implications long term. Are huge profit margins on a few drinks in the Sky Clubs worth this?
Think about this for a minute. There are now so many travel cards that pay you 3x points (or more) when you buy a ticket with that card. Not just that but when you go to redeem those points you are getting even more than 1 cent in value each.
I hope you see my point. Why would you pay with a Delta co-branded credit card that is ONLY paying you 2x points for Delta purchases when the simple math from Delta is telling you that you are getting so much less value for your purchase compared to the competition. This is not that hard folks when you boil it down to 1 cent each.
Now I am not foolish enough to flush my SkyMiles down the Sky Club drain buying over priced drinks with either “real” money or SkyMiles at 1 cent each but I am sure many will. But the key point is the psychology of this move and the long term impact choices like this from Delta will have on the rewards program. If you take away the aspirational value of a SkyMile you have moved it from an intangible value of a dream trip in Delta One to pushing buttons on a calculator to see if value is to be found.
The Delta SkyMiles team has made a great number of bone headed decisions over the past few years but this one may just be one of the dumbest possible moves ever to finally convince the general public that SkyMiles has been dumped down to a penny in value. – René
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