Amtrak is in the train business, part 2

Sunday, September 13, 2015

The debacle surrounding this week's rollout of the new Amtrak Guest Rewards credit cards from Bank of America prove, once again, that Amtrak is in the train business. And it sometimes has significant challenges doing that. So if Amtrak is going to venture outside of its core competencies, it should make sure to do such ventures well, and not in such a way as to have a negative impact on its core mission.

In today's world, of course, it's expected that any large travel-related customer-service business will offer the sorts of perks that its competitors do, like "frequent traveler" loyalty programs and co-branded credit cards. These can be significant money-makers, and can reinforce the predilection of a company's customers to return.

But only if the perks are done well, which arguably, Amtrak's are not.

The recent announcement of "Amtrak Guest Rewards 2.0" has not made many of its best customers happy, both because the perks have been significantly devalued, and because the new program is much less enticing for the majority of Amtrak passengers who don't live in the Northeast Corridor.

Then, to top it off, the rollout of the new credit card was botched, due to an error that caused the online application system to reject everyone.

There's no excuse for such a disaster. While it's probably true that the application rejections were most likely due to programming errors on the part of Bank of America, Amtrak very obviously didn't do its due diligence, both during the selection process for its new credit card partner, and the evident lack of any sort of beta testing before the application site went live.

Amtrak, with its chronic underfunding, antiquated equipment and facilities, uncomfortable tenancy with freight railroads, complex employment rules, and opaque accounting, has enough problems as it is. It doesn't need "loyalty" programs that have the opposite effect of driving away its best customers.

The folks at Amtrak headquarters need to apologize to their customers who have been affected by their recent ventures. Then, they need to think seriously about getting their own house in order before getting into more ill-advised and badly-implemented side ventures. After all, Amtrak is facing significant competition as an operator of passenger rail for the first time in forty-five years. Time to get your act together, Amtrak.

--CH

Update:

I am not suggesting eliminating AGR or the credit cards. I'm saying that they need to be done right in order to meet the needs of both Amtrak and its customers.

I imagine that most of us would have been perfectly happy to participate in focus groups and beta tests before both the new AGR and credit cards were publicly announced. Which would have provided Amtrak with the feedback they needed to work out the bugs, and would have prevented it from getting an unnecessary black eye at a time when it is under scrutiny for other reasons.