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Award Accrual

Updated 2/25/16

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  1. View From The Wing: Why I Collect Miles & Points
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  3. One Mile At A Time: Valuing Earned Miles

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Award Accrual

Following government deregulation of the airline industry in 1978, advertising agency Doyle-Dane-Bernbach shared with its client, American Airlines, a belief that there was a lack of product differentiation among airline competitors.  Marking firm Doyle-Dane-Bernbach proposed a marketing technique that had long been embraced by other customer-centric companies such as banks and grocery stores— the customer loyalty program.  In May 1981, American Airlines introduced AAdvantage, the first frequent flyer program.  The goal of AAdvantage was to retain frequent customers by rewarding their loyalty.

The implementation of the new program would involve tracking members’ flown miles in order to reward members with free flights and seat upgrades.  In order to accomplish this task, American Airlines compiled a database using its Sabre computer reservations system.  The system cross-referenced bookings with recurring phone numbers and associated them with the customers’ names.  Initially, the database compiled 190,000 of American Airlines’ best customers.  130,000 were the most frequent flyers, and an additional 60,000 were members of the American Airlines Admirals Club.  All 190,000 were pre-enrolled and sent letters in the mail with their new account numbers.

Within days of the introduction of AAdvantage, United Airlines introduced its own rewards program, MileagePlus.  For the most part, MileagePlus was a mirror image of AAdvantage with one distinctive difference.  The “plus” in MileagePlus referred to two differentiating benefits- a 5,000 mile enrollment bonus and no mileage expiration.  By late 1981, Delta Airlines and Trans World Airlines followed suit introducing frequent flyer programs of their own.  With four of the major competitors in the travel industry embracing customer loyalty programs, the concept had reached critical mass.  - adapted from Frequent Flier

Journey far,

― Joe

For my part, I travel not to go anywhere, but to go. I travel for travel’s sake. The great affair is to move.
Robert Louis Stevenson

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