We apologize for the inconvenience. Here, have some beads.


My daughter is spending her summer in Denmark with friends and relatives. On her way over, she had a layover in Minneapolis that lasted eleven hours. In the end, it all worked out well. She flew Northwest Airlines/KLM and they rerouted her flights, didn’t lose her luggage and delivered her in one piece to one anxious, but happy grandpa. With the exception of the long layover, NWA did everything she expected them to do. And, the long layover was not such a bad thing as she made some new friends, exchanged Facebook accounts and emails and expanded her social reach just a little bit more.

Then, this is where NWA starts to screw up. A couple weeks go by and she gets a letter from NWA in the mail, apologizing for the inconvenience of a long layover and gives her some beads, aka 5,000 Frequent Flier Miles. She really doesn’t want the miles. What really has value for her is a luggage weight waiver. So, as long as NWA is showing some remorse, she decides to ask for a luggage waiver. As expected, NWA declines to give her the thing of REAL value she asked for, even though she was practically handing them an opportunity to be the “cool kid” on the airline block.

What are beads?
Long time ago, I used to sell exercise bikes to paralyzed people. True. The man who owned the company was a good ol’ boy from Como, Mississippi who made his fortune selling automation software for television advertising. Almost everything valuable I know about business I learned by watching him.

He used to keep this HUGE bowl of worthless plastic beads on his desk (along with a hotel doorman bell, a pile of fake poop and other things.) Whenever you would go into his office to ask for something that he didn’t think would add value to his business, he would agree to do it and then hand you a handful of beads to pay for it. You got the message pretty quickly. The moral of this story is; if you can pay for something with beads and convince others the beads have value, you’re ahead of the game.

To an airlines, frequent flier miles are beads. For the casual traveller, you can’t really accrue enough to pay for a flight, you have blackout dates, you are the first to get bumped, you can’t upgrade, you can’t transfer them to another person. For the business traveller, using frequent flier miles to get to an “absolutely, positively got to be there” meeting is like gambling the family farm on a Vegas Roulette game. Frequent flier miles have all the value of a bowl of plastic beads.

The airlines knows this but continues to hope you don’t which is why Ms. Arden could not give my daughter the thing that had value. Waiving luggage fees meant a real reduction in revenues whereas giving away frequent flier miles only meant a possible stop-loss, i.e., if the plane wasn’t sold-out, if the passenger had enough miles to claim a ticket, etc.

We see companies giving away beads all the time. AT&T Wireless gives away Roll-Over Minutes, National City Bank gives away Points, Discover Card gives Miles, AOL used to give away many more thousand minutes per month than there actually were in a month. All beads. All added onto the product/service to make the consumer thing it is more valuable than it really is.

Nice work if you can pull it off. But when a customer asks you to really rise to the occasion, probably not a bad idea to take the ring. Or this might happen.

Originally published at GerardMcLean.com