Dear Austin Veith and UsingMiles team,

Austin Veith presents at PhoCusWright's Travel Innovation Summit 2010

Congratulations on your upcoming launch and demo at PhoCusWright. First of all, I think you buried the  lead of your story.  You have one of the most well respected, most generous, and most important guys in the history of frequent flyer miles on your side!

You haven’t given me a beta invite yet, so these are just some impressions from your demo.

UsingMiles serves frequent travelers who are unmanaged business travelers and leisure travelers seeking an Online Travel Agency that factors in your mileage preferences into your search.  First, you allow consumers to compare general award availability (but not at the PNR level) with bookable fares.  Second, you integrate my frequent flyer data on redeemable miles (RDM) and Elite Qualifying Miles (EQM) into the flight search so I can see (a) how much more I need to earn to get a free ticket and (b) how many more miles I need to qualify for elite levels.

First of all, as a mileage junkie, and an unmanaged business traveler, I can see myself using your product.

But let’s think hard about who your target market really is.

If a frequent traveler only is loyal to one airline frequent flyer program, are they really a customer for you?  They can search the supplier website, then search a general metasearch site, to get the same information that you are providing.  Of course, your solution saves one step, but is that a significant enough value-add to justify going to a new website?  and telling your friends about it?

If a frequent traveler is playing the mileage game across multiple airlines, then perhaps your tool is more valuable.  If I am either trying to gun for elite status on multiple airlines, or achieve mileage award tickets in a certain time on multiple airlines, then I can see your tool helping me decide which airline to fly when I’m buying a paid ticket to achieve my mileage goal.

But mileage programs are designed to create loyalty, and loyalty also derives from your point of origin (POO) and who has the routes and network that you need.  Also, because elite levels, there are increasing benefits to consolidate all your travel onto one airline.  But of course you know that.

If you’re not a frequent traveler, then you’re not a target customer of UsingMiles.

If you’re buying tickets through corporate managed travel, you’re not a target customer of UsingMiles…although you might use it as a shopping tool not a booking tool.

Bottom line is that I concur with a comment from the critics circle.  While a lot of miles (20 trillion, according to you) are earned, the actual number of frequent travelers who are optimizing against multiple programs is actually pretty small.  You can’t possibly make money just on the air travel booking fee.

My advice is to think about what the frequent traveler who is only optimizing against one airline would need and to really organize your user experience around that target.  I think it is a more difficult to serve target customer (because you need much more value than just shopping the supplier site and then an OTA or metasearch site) and will push you to move your product in a bigger way than just serving the multi-airline frequent traveler.

And take advantage of Randy’s recent retirement from FlyerTalk to get involved in your business!  Congrats.