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:: Articles About Randy |
He built a million-dollar business giving pointers about bonus miles
By Keith L. Alexander
(originally published in the Sep. 12, 1995 edition of USA Today)
Airline CEO's court him. Congressmen consult him. And thousands of frequent fliers listen to his advice.
Randy Petersen has made a career - and a fortune - guiding travelers though the intricacies of the frequent-travel programs run by airlines and hotels around the world. "I'm sort of the Dr. Ruth and Dear Abby on miles," he says.
Petersen 41, says he earns about $1 million a year advising frequent fliers all over the world on the award programs. As the owner of FlightPlan Inc., Petersen and a staff of 35 track 73 airline, hotel and car rental programs. His Colorado Springs company operates 12 businesses - from magazine publishing to an Internet chat line to a line of clothing - all built around frequent-flier programs.
Globe-trotter
His most popular business is his monthly magazine, Inside Flyer ($33 a year), which has 80,000 subscribers. Last March, Petersen opened a London office to publish an international edition. The magazine reports news and trends in frequent-travel programs and evaluates one in detail each month. Petersen gives yearly awards to the airline and hotel programs judged best by his readers.
A road warrior himself, Petersen has earned more than 5 million frequent-flier miles from trotting around the globe lecturing business travel managers, companies and travel conventions each year. He appears regularly on TV and radio talk shows and is often quoted in newspapers and magazines.
"Good manners and miles are as sexy as anything out there."
-- Randy Petersen,
the "Dear Abby of frequent flier miles"
Not a bad living for someone who attended the University of Nevada-Las Vegas on a football scholarship and graduated with a double major in anthropology and black history. Petersen stumbled into the world of frequent-flier programs in the early 1980's when the programs were starting. As director of merchandise and marketing for a menswear retailer, he signed up for TWA's frequent-flier program and earned a free trip to Maui.
Petersen soon found himself advising friends and co-workers about the programs. "I was spending hours a day answering questions," he says. In 1985, Petersen quit his job and started his frequent-flier consulting company.
Opinion leader
Petersen's shoulder-length brown hair is often ridiculed by customers, who tell him to get a haircut.
But the travel industry and his readers take Petersen's opinions seriously. For example, in 1992, Petersen criticized Continental for requiring 35,000 mileage credits for a free ticket when other airlines only required 20,000. Petersen downgraded the carrier's programs to the bottom of his top 10 list. Continental reconsidered and lowered its mileage requirements.
Getting awards can be hard work
Last year, when Continental began eliminating its first-class section on its long haul flights, it also tried to eliminate its priority boarding and upgrades policy. Petersen told Continental executives they had "lost their minds"; they later conceded he was right.
So in January, Continental CEO Gordon Bethune invited Petersen and some of Continental's top frequent-fliers to a cocktail party at his home to celebrate Continental's return to the old rules. "He's like a J.D. Power and Associates poll," says Bethune, referring to the influential automobile market-research firm known for its customer satisfaction surveys. Donald Schmitt, director of marketing for Northwest Airlines' WorldPerks program, says he routinely discusses program changes with Petersen. "If he runs into something that he thinks is unreasonable, he'll point it out to us," Schmitt says.
Petersen even has taken his expertise to Washington. In February, Petersen worked with Rep. Thomas Barrett, D-Wis., on drafting a bill to restrict members of Congress from using frequent-flier miles earned on government travel for personal use. Members of the Senate have already adopted the policy. The bill is currently stalled but Barrett says he hopes to revive the issue this year.
The bill is opposed by the House Speaker Newt Gingrich. Petersen says Gingrich has accumulated more than 1 million miles on Delta and isn't happy about giving them up. Gingrich's office did not return calls.
Playing a dual role
But while Petersen serves as a frequent-travelers' advocate, he also has close ties to travel companies. His magazine accepts advertising from travel companies, although Petersen says 90% of the magazine is funded through subscriptions. And Petersen has been a consultant to such companies as Holiday Inn, Hilton and United.
"We have maintained a very good straight line down the middle to be pro-consumer when it makes sense and being pro-industry when that's the way it falls," he says.
Changes ahead
Frequent-flier programs are constantly changing. Last year, the major airlines increased the amount of miles needed for some awards. But Petersen sees more changes coming. He says the days of fliers earning mileage points only from travel are fading.
Instead, increasing ties between airlines and hotels, long-distance carriers and even restaurant chains are creating new chances to earn miles without getting on a plane. "It used to be he who had the most miles was your best airline customer. No longer. They could be Allied Van Lines, AT&T or MCI's best customer."
Petersen tries to show impartiality as much as possible when he travels. He flies one airline to his destination and returns on another airline. He often flies coach and strikes up conversations with seatmates to learn about their favorite programs. He rarely stays in the same hotel more than one night. If he's staying in the same city two or more nights, he'll check out of one hotel and check into another the following morning.
In its July/August issue, American Woman magazine named him bachelor of the month because Petersen often gives his mileage awards away to his girlfriends or relatives. "Good manners and miles are as sexy as anything out there," he says.