The behavioral side of the frequent-flier program

Almost everyone was impressed, if not surprised, by my enthusiasm about the frequent-flier program. Nevertheless, as I always told them, compared to these real ”die-hard” fans, I am truly ordinary.

I have seen people flying from Spain to Japan and then turning back immediately, just to collect enough miles to maintain their status. All they talked about during the flight is how to manage elite status (which is quite educational).

A friend of mine once was about 3,000 miles short from the so called “million miles club” of the United. She proposed a vacation in Tucson, Arizona with me, and she would fly from California via these bizarre routes to get there rather than a direct flight. Not to mention this happened just a couple of days before the United filed for bankruptcy.

Another time when I was flying from Minneapolis to Indianapolis, the New Yorker sitting next to me was also addictive to the flier program. He collects not only miles but also hub stops. So to achieve his gold status, he took an around trip between New York and San Francisco, with connections at Minneapolis, Detroit, and Indianapolis.

My friend has done some interesting work in this area of consumer behaviors. I asked him to email me this old article from New York Times, which featured his research (see below). 

For me, I am not sure whether I would agree with the equivalence between the experiments and the actual program. Through a calculative mind like mine, I have long reached a conclusion: If you do travel a lot, the benefit of sticking to a frequent-flier program far exceeds the cost. At least far more than the Haagen-Dazs icecream.

Using Ice Cream to Understand Frequent-Flier Miles
By David Leonhardt
New York Times, April 25, 2006

To understand the appeal of frequent-flier miles, it’s worth considering an experiment that some researchers did on a Midwestern college campus a few years ago.

Students were given a choice between two simple tasks. One would take six minutes, and the students were told that they would get a gallon of Haagen-Dazs vanilla ice cream as a reward. The other would require seven minutes of work, and the payment would be a gallon of Haagen-Dazs pistachio.

Not surprisingly, since the second option involved more work and a less popular flavor, only about a quarter of the students chose it.

But the researchers also repeated the experiment with a couple of tweaks. In the new version, the six-minute task led to a payoff of 60 points, and the seven-minute task brought 100 points.

The researchers then told the students that anyone who finished with between 50 and 99 points would be given a gallon of vanilla ice cream. Anyone with 100 points would get pistachio.

Practically, there was no difference between the two experiments. But the outcomes ended up being very different.

With the lure of points added to the mix, more than half of students chose the longer task and the less desirable pistachio prize that went with it. Independent of their actual value, “points” apparently give people some satisfaction.

That’s just one reason that frequent-flier programs have been so successful for so long. The ice cream experiment was done by Christopher K. Hsee, Fang Yu, Jiao Zhang and Yan Zhang, all of the University of Chicago.