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How can a small business offer incentive miles to its customers?

SmarterTravel

Dear Tim,

We are a small business looking to offer frequent flyer miles to our customers for their continued patronage.

Can you please spare a moment and tell me how a business like ours can begin offering frequent flyer miles to our customers?

Kevin

Dear Kevin,

All of the major U.S. airlines will be happy to sell miles that businesses like yours can use as sales incentives or, in some cases, to reward employees for achieving company-defined goals. (Be aware, however, that in some cases, the airlines have pre-existing exclusive relationships that prevent them from selling miles to other businesses in the same category.)

The industry-standard rate ranges from $0.02 to $0.025 per mile, with a minimum purchase of $1,200 to $1,500. In addition, you’ll pay a 7.5 percent excise tax, and usually a $75 processing fee.

The most widely available format is coupon books, containing certificates in 500-, 1,000- or 5,000-mile denominations. But airlines are increasingly offering miles that can be awarded electronically, allowing the donor to give away miles in odd quantities.

For more information on obtaining incentive miles from the three largest programs:

Airline: American
Incentive Mile Program: AAdvantage Incentive Miles
Website: https://www.aadvantage-orderform.com
Phone: 800-771-5000

Airline: Delta
Incentive Mile Program: SkyRewards
Website: http://www.delta.com/skymiles/sm_programs/skyrewards/index.jsp
Phone: 404-715-9426

Airline: United
Incentive Mile Program: Mileage Plus Reward Miles
Website: http://www.ualmiles.com/indexual.htm
Phone: 800-PICK-UAL

You can obtain information on incentive programs from the other airlines through their frequent flyer service centers.

One final thought…The expense and administrative burden of offering miles in a multitude of programs can be overwhelming. So you’ll probably want to restrict your offer to a single airline’s miles, or at least to a manageable number of choices, say two or three types of miles. Which miles to offer? If you’re an Atlanta retailer selling locally, offer your customers Delta miles. If the preferences of your customers are less clear, ask a cross-section of recent clients which airline programs they participate in.

Hope that helps.

Tim Winship
Contributing Editor
SmarterTravel.com

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