The challenge reminds me of a great article penned by Sidney J. Levy and Philip Kotler back in 1971. In “Demarketing. Yes, Demarketing,” they asked somewhat hypothetically how marketing might apply to reverse market situations. We’re very familiar with the conventional use of marketing–trying to drive demand for products and services when there is ample supply. But they asked if marketing, and branding, could be used to discourage customers. Certainly, some marketers have used this in a widespread fashion with dangerous products, such as cigarettes. Levy and Kotler described the tricky process of using demarketing to reduce demand in unfavorable business segments, and they described the ethical issues in doing so. But, while much of their work focused on marketing practices and policies, they didn’t address the big symbolic question: how do you create a brand that discourages product use. It’s worth contemplating. Sometimes, thinking about questions such as these helps the marketer to better the brands that must do the opposite.

Today, American Airlines announced that it would begin charging for some mileage upgrades. Now, I get it. Times are tough. Fuel prices are high. The airlines are getting squeezed from every angle. I’m actually sympathetic. Carriers like American are saddled with a legacy of labor and operating constraints that don’t change as quickly as our economy. But that doesn’t resolve the foolish marketing approach they have employed.

When you attempt to redeem miles on American for an upgrade, the miles required will be higher and you’ll have to fork over some cash. But American doesn’t call that fee a fee. Instead, they’re branding it as a “co-payment.”

This is the silliest thing I’ve ever heard. It’s just insulting. Mileage upgrades are customer rewards, a loyalty incentive. ‘Co-payment’ implies that both parties have some obligation to pay for the service. That’s why insurance companies began using the phrase when they started requiring the insured to share in the cost of routine office visits. Granted, it’s a bit of a stretch there, but the context made sense because the transaction generally involved three parties: the employer, the insurer, and the insured. When co-payments were introduced, it was novel for the insured to have to share in the cost.

I suppose it is novel for the loyalty participant to share in the cost, but it defeats the whole purpose of a loyalty program. I fly a lot. I earn rewards. Sometimes, I wish to redeem those rewards to enjoy the benefits of my loyalty. Apparently, redeeming my gift requires me to share in the cost. I tell you what. For your birthday, I’m going to buy you a cake. I’ll even bring it to you. We’ll sing Happy Birthday and just before you cut the cake, I’m going to ask you for a co-payment to cover a portion of the costs it took for me to purchase and transport the cake. It’s the least you can do in these economic times.