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:: Articles About Randy |
Guru Sells Maps to Frequent-Travel Maze
By James S. Hirsch
(originally published in the Apr. 13, 1993 edition of The Wall Street Journal)
Most airline passengers have never heard of Randy Petersen, but he may be the most influential frequent flier in America.
Seven years ago, when frequent-travel programs were still in their infancy, Mr. Petersen started an information-service business explaining the intricacies of segment awards and bonus upgrades. He produces a monthly magazine on the subject, serves as a paid consultant to companies on reclaiming miles from employees and is a popular speaker at everything from travel conventions to rotary clubs.
As the owner of FlightPlan Inc., based in Colorado Springs, Colo., Mr. Petersen has ridden a frequent-flier marketing wave as programs have proliferated thoughout the service industry. The hard-driving entrepreneur says he earns about $1 million a year helping companies and individuals purchase miles, transfer free tickets and read the fine print. "I'm recession proof, " he contends.
And always in demand. He appears regularly on television and radio and is constantly quoted by the print media. As America's high priest of frequent-travel programs, the 39-year-old Mr. Petersen carries the same kind of clout as a Broadway theater critic.
Quick Response
For example, he criticized Continental Airlines last year for requiring 35,000 mileage credits for a free ticket on trips that don't include Saturday night stays; Continental soon changed its policy to 20,000 credits, the level required by most airlines. USAir lowered its mileage requirements on international flights last year after one of Mr. Petersen's editorials.
Continental, a unit of Continental Airlines Holdings, Inc. says that Mr. Petersen's comments spurred the change in its requirements. Daniel Brock, vice president of marketing services for USAir, a unit of USAir Group Inc., says his carrier was already considering its move. But he adds, "If you're contemplating making a change in your program, the last step is to call Randy and make sure you haven't missed anything."
Mr. Petersen is no Ralph Nader. In fact, he works with the travel industry as much as against it. He informally advises airlines, hotels, car-rental companies and credit-card concerns about improving their programs. In a recent whirlwind week, he visited American Express Co.'s ad agency, Ogilvy & Mather, in New York, flew to London to consult a travel-management concern, then dashed to Bangkok, where Thai Airways wanted to pick his brain.
Travel companies use Randy Petersen to discover the ins and outs of their rivals' frequent-flier programs. 'If we have a question about why American did something, we'll ask Randy about it,' says Rick Boubelik, WorldPerks program manager for Northwest Airlines.
He doesn't charge for this kind of advice, but he does gather tips about the arcane details of frequent-travel programs, which he then drops into his magazine, Inside Flyer. The magazine has 72,000 subscribers at $33 a year. In one recent edition, readers discovered that frequent fliers on Northwest could earn 110 bonus miles by ordering the Silver Butter Knife Steak at Murray's in Minneapolis and four extra points for getting the Ceasar salad.
'Ask Randy'
Travel companies, meanwhile, use Mr. Petersen to discover the ins and outs of their rivals' programs. "If we have a question about why American did something, we'll ask Randy about it," says Rick Boubelik, WorldPerks program manager for Northwest Airlines, a unit of Wings Holdings Inc.
Some airline executives resent Mr. Petersen's oracle-like status but say they have to return his calls because he is the news media's principal source of information about their frequent-flier programs. These executives also say that Mr. Petersen sometimes misinterprets the reasons an airline changed some feature of its program and that his singular obsession with miles causes him to miss broader industry trends.
Consumer advocates also fault Mr. Petersen for not being tougher on the airlines and failing to distinguish which programs are best or worst. (Readers of Inside Flyer do rank the programs; Continental Airlines has won several years in a row.)
Mr. Petersen says his narrow focus on miles is why he has been successful, and he brushes aside criticism he's too soft. "It's hard to criticize a company that's giving away something," he says.
Mr. Petersen has taken liberties as a journalist. A recent cover story of Inside Flyer effusively praised a new product called AwardExtender, which for $159 a year insures mileage credits against expiration. Only at the end, deep inside the magazine, did Mr. Petersen disclose that AwardExtender is sold by a company he owns. (He now concedes the warning should have been at the beginning.)
Mr. Petersen does have a knack for finding creative business niches, though. When he was a student at the University of Nevada at Las Vegas, refrigerators were banned in dorm rooms. So Mr. Petersen bought a big one for $25, stuck it in the dorm's basement, put a padlock on the door and rented keys for $15 a semester.
He came to his current career quite by accident. As a menswear marketing executive in
the mid-1980's, he helped colleagues decipher their frequent-travel programs. "One day my boss dropped some papers on my desk and asked about the Marriott awards," Mr. Petersen recalls. "A light bulb suddenly went off: A lot of people don't understand these programs." Now his company takes in about $8 million in revenue a year.
A friendly, earnest sort with a lanky frame and a mane of blond hair, Mr. Petersen is praised for his diligence, accuracy and a work ethic that borders on obsession. He rarely takes a day off and occasionally sleeps in an inflatable bed in his company's two-story headquarters in Colorado Springs, Colo. His staff tracks 57 frequent-travel programs, and his office receives 10 daily newspapers and 50 trade publications. "I'd rather read a newsletter than a mystery," Mr. Petersen says.
Fast Friends
He lives with his father and is something of a loner, traveling by himself 40 weeks a year and sometimes taking off for Europe with no plan in mind. Strangers warm up to him, he says, when they discover his line of work. "You mention frequent flier, and you've got a friend for life."
Mr. Petersen accumulates points in 27 programs and once walked out of a Hilton Hotel in Seattle because it didn't have a frequent-stay plan. He says he has more than five million airline miles in his accounts, but oddly, he has never cashed any in for a free flight. Instead, he simply collects the credits like coins.
Mr. Petersen turns down fees for speaking engagements and often refuses reimbursements for travel expenses. Last year, for example, Holiday Inns Inc. invited Mr. Petersen to Atlanta to talk to executives about their frequent-stay program, and Mr. Petersen insisted on paying for his Holiday Inn room.
Free rooms, it turns out, cannot be counted toward frequent-stay credits, and Mr. Petersen is single-minded about adding to his accounts, even if it costs him money. "A point's a point," he says.
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