‘Subscription loyalty’ or ‘paid loyalty’ has been a buzz word in loyalty circles for the past couple of years.
Whilst paid programmes have been around for many years – InterContinental Ambassador is one we discuss most – the real driver has been loyalty consultancy Collinson. The company sees running paid programmes on behalf of airlines as a good cash stream for itself and has been promoting the benefits of subscription loyalty at every opportunity.
After a limited trial in 2019, Emirates has recently taken the plunge and opened its scheme to everyone – but does Skywards+ stack up?
‘Paid loyalty’, in theory, should be a winner for both you and the company selling the scheme.
Let’s take InterContinental Ambassador. IHG did a good job in structuring this:
- there is a clear ‘quick win’ to persuade you to pay $200, in the form of the ‘free weekend night’ voucher. This gets you two nights for the price of one over a weekend at InterContinental hotels. Suites are often included.
- there are good reasons to move additional stays to InterContinental – a guaranteed 4pm check-out, a guaranteed upgrade and a $20 food and drink credit
Put together, it is an attractive package.
Outside travel, look at the £20 per month Pret coffee subscription:
- you win because, as long as you buy more than 8-9 coffees per month, you are saving money
- Pret wins because it gets you into its shops on more occasions – why would you bother visiting a Nero or Starbucks if a Pret was nearby? Even if you were bored of Pret, the lure of a free coffee versus paying elsewhere would get you in.
Emirates, unfortunately, has got it wrong.
What does Emirates Skywards+ offer?
Here is the home page for Skywards+.
Here, click to expand, is a summary of the costs and benefits:
There are three levels:
- £289 for Classic
- £506 for Advanced
- £723 for Premium
The benefits can be broken down into (exact benefits vary by category):
- 20% additional tier points and miles when you fly
- 20% off mileage redemptions
- lounge passes
- additional baggage allowance
Where’s the sign-up bonus?
The first problem is that there is no killer reason to hand over a substantial amount of money today.
In fact, as there is no limited time welcome bonus offered, it makes sense NOT to join until you had a number of Emirates flights in the diary and were close to the first trip. You’d want to maximise the period of time you benefitted as much as possible.
Most subscription schemes deliberately lose money on your first few payments to entice you to join. After all, you are being asked to make a non-refundable payment in return for some benefits which may or may not turn out to be valuable. Emirates doesn’t seem to believe in this.
If I was Emirates, I would be offering substantial mileage benefits for joining, especially given the reduction in international travel at the moment.
Perhaps 30,000 miles on the £289 plan, rising to 75,000 miles for the £723 plan? Emirates would get some cash in the door and, as you now have a pile of miles, you would be incentivised to spend them – and take advantage of the 20% discount on a Classic Reward.
Where is the killer benefit?
The second problem, in my mind, is that these are very marginal benefits.
When did 20% off anything excite you? Does 20% off an item in a shop make it into a ‘must buy’? Does a 20% bonus encourage you to buy hotel points? Not really. Getting 20% additional miles or tier points won’t move the needle much and certainly doesn’t justify an outlay of up to £723.
Even the ‘soft’ benefits, like lounge access, don’t add much to the package. £25 will buy you access to a decent airport lounge so adding two passes to a £289 package isn’t exactly great value.
InterContinental Ambassador is cleverer:
- the free weekend night voucher has a real benefit
- 4pm guaranteed check-out has a real benefit, and you can’t get it via any other route as it’s not an IHG Rewards benefits
- a guaranteed upgrade has value, and you know you are getting it
- $20 of food and drink credit gives you a firm feeling that you are getting some value back for your $200
Skywards+ doesn’t have any of that.
However …. there IS one real benefit of value
All of the packages, even the cheapest £289 one, offer ‘20% off Classic Rewards’.
This is less generous than it sounds, because you can only use it once per year.
That said ….
A ‘Classic Rewards’ return trip to Dubai from the UK is 90,000 Emirates Skywards miles in Business Class. For a family of four, you are looking at 360,000 miles return. You could get these miles by converting 360,000 American Express Membership Rewards points.
A family of four would save 72,000 miles on a Business Class redemption between London and Dubai. If you value Skywards miles at 1p each, you are saving £720 for a £289 outlay on joining Skywards+.
This isn’t what Emirates is looking for, of course
Paying £289 to save 72,000 Skywards miles on a redemption is what I would call ‘transactional loyalty’.
You’re not showing any sort of commitment to Emirates and it isn’t showing any to you. You are simply paying £289 to get a big discount on a flight redemption. If you never fly Emirates again, you are still ‘up’. Emirates will probably lose money on your booking, versus the cost of wiping 72,000 miles off its balance sheet.
The bottom line is that Emirates wants you to pay between £289 and £723 for, basically, an expensive book of non-refundable coupons with a short expiry date. No-one is going to get excited about that.
You can learn more about Skywards+ on this page of the Emirates website.