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Lisa Hronek Archive for January, 2010
Travel trends: Southwest & JetBlue still boast “no baggage fees”
Checked luggage fees are starting to feel like ATM fees. First there were none (we were happy), then there were some (we were outraged), then there were more (we began to accept them) and now, nearly all airlines charge for checked luggage (and we’ve resigned).
This month, a number of airlines have announced increases in checked luggage fees. The most recent company to do so is United Airlines, which will now be charging $25 for the first checked bag and $35 for the second checked bag. (Discounts are available for bags checked in online, which gives thrifty consumers at least one option to save money.) United Airlines’ new rates are a $5 increase from its previous rates. The company followed suit after Delta and Continental raised rates earlier this month.
However, two companies are standing by their business plans and have not yet charged for checked bags. And both seem adamant that they won’t charge for checked baggage anytime in the future…
Southwest Airlines continues to “go against the grain” with its long-standing practice of allowing a traveler’s first two bags to fly free. In addition to using commercials and its website to promote this “bags fly free” philosophy, the company has used marketing emails to remind travelers that flying with Southwest Airlines could save them money.
JetBlue is another company that has not mimicked the competition with checked bag fees. JetBlue does not charge passengers for the first checked bag, nor does the company seem to have any intention of doing so in the future.
Have baggage fees deterred you from booking a flight or encouraged you to look at another airline for a better option? I believe that these fees could definitely impact flier’s decisions as to which airlines to take. I’m curious if a bag fee is a “big enough piece of the pie” to have an impact.
Credit card points to pay the tax man
I heard about this mid-last week and thought I’d pass it along. It’s a great example of how innovative rewards programs can tap into consumer’s wants and needs, (hopefully) fostering loyal, happy customer relationships.
American Express has been expanding its Membership Rewards program in recent months to include new partners and redemption options. In its latest move, cardholders can now redeem points to pay federal, state and local income taxes. Interesting, no? Launched just in time for tax season, this reward could be very enticing to cardholders who need a little extra help paying their 2009 tax bills.
The option to pay taxes with rewards points comes in addition to another new feature that allows customers to use points to pay for everyday purchases such as gas, groceries, phone, wireless and cable bills. In addition to this feature, American Express has also added new travel, dining, entertainment and retail partners.
Read the American Express press release here, including this statement from SVP Lynne Biggar about how the company’s new rewards can benefit customers:
“We know that Cardmembers want a rewards program that offers everything from practical and everyday rewards to the extraordinary,” said Lynne Biggar, senior vice president, Membership Rewards Marketing and Partnerships. “In 2010, we will continue to provide the reward options that our Cardmembers want and are focusing on making them more relevant and attainable. For example, just in time for tax season, we have added the ability to use points toward tax payments.”
Emails promote term life insurance with no medical exam
Over the past two years, there has been a steady percentage of emails that offer a term life insurance product without requiring a medical exam. This year, a full 48% of the term life emails captured by Mintel Comperemedia are being sent with the phrase “no medical.” This is up slightly from last year.
In regards to the term life coverage amounts offered, there is little difference between those that don’t mention an exam at all and those that state “no medical exam.” For both types of email offers, the most often cited coverage amounts are $250,000 and $500,000. These values have a ratio of 1:2, respectively.
Looking at actual email offers sent in the past two years, many position their lack of medical exam requirement as a way to make getting term life insurance easier and less complicated. Emails from leaders such as HSBC and RBC/Liberty Direct employ this positioning.
Clearly, term life without a medical exam is going to continue to be the leading product offered through the email channel. Companies are going to compete on how fast and simple they can make the application process, so consumers aren’t daunted by the mere prospect of signing up for term life.
Auto trends: GM deeply discounts Saturn & Pontiac vehicles
GM announced on December 29, 2009 its intention to offer “deep discounts” on its remaining new Saturn and Pontiac vehicles. The company wants to move out the remaining inventory of the two discontinued GM brands.
According to CNN Money, GM agreed to pay dealers $7,000 for every new Saturn or Pontiac that was sold with a five-day period. The caveat was that the inventory would have to first be moved into the dealer’s rental or service fleets (pre-owned car inventory), in turn making them the first owners of the vehicle. This arrangement allowed dealerships to sell certain Saturn and Pontiac models at up to 46% off the manufacturer’s suggested retail price. This offer lasted until January 4, 2010 for dealers.
The offer created an opportunity for dealers to move inventory while giving consumers a great deal on a new car. Despite the discontinuation of the two brands, GM is committed to ensuring drivers and prospects that both Saturn and Pontiac models can be serviced at any GM dealership in the future.
Did anyone take advantage of the reduced pricing and purchase a new Saturn or Pontiac before the offer expired? I’m interested to see how it worked out.