An Honest Discussion About Loyalty

Ben Lipsey, Air France-KLM's loyalty chief, tells me how many customers tried to book its recent mistake fares, and he shares some secrets about the company's loyalty strategy.

Dear readers,

As a miles and points nerd, I long have wondered how less-obsessed consumers react to changes in the value of their favorite loyalty currency. When prices increase for an award, does demand fall? If so, by how much? When airlines offer transfer bonuses, do more customers move points from their bank to a loyalty program? And what about mistake fares? When an airline makes a fat-fingered error, how many customers book? Just a few? Or do tens of thousands of people try to capitalize?

To answer these questions, I turned to Ben Lipsey, senior vice president for customer loyalty at Air France-KLM, who is on a quest to persuade more consumers (particularly Americans) to convert bank points into Flying Blue miles. Lipsey, as you may remember, is a points geek — he started his career by parlaying an active role on Flyertalk¹ into a 2011 internship with Air Canada. Next, he became an employee, working for Ben Smith, and in 2018, he joined Smith at Air France-KLM as his chief of staff. Three years later, he moved to loyalty.

Lipsey and I spoke about consumer behavior, or how a loyalty scheme can prod travelers into making decisions that further both their interests and a program’s revenues. We discussed why Flying Blue just finished a lucrative (for consumers) promotion with Bilt, why the program lowered its entry prices for transatlantic business class tickets, and how Lipsey managed to get travelers to pay for Sustainable Aviation Fuel. (The same way he essentially killed the mileage run.)

And yes, we discussed Flying Blue's recent mistake fares, when some transatlantic business class tickets were priced at 1,500 miles each way. Lipsey told me how many passengers booked these fares, and why Flying Blue honored some but not others.

Read on for the good stuff.