The Gold Mine of Points Earning is Promotions. Why Steve Belkin is Our Hero.

One bit of advice widely given in the community that I hate is, “earn points with a goal in mind.”

Here’s the thing… My dad’s next trip is to visit his parents in Erie. He hasn’t decided on a next trip. “That’s fine, he can start earning when he does.”

Okay, sure, but the value of things aren’t going to change much. I mean, they always change, burn your points, yada yada yada. But right now with the Big Win promotion, I can earn a heck of a lot of points for little money. “But what do I plan on doing with the points?”

Who cares? IHG is everywhere. Radisson is global. OneWorld is global. It doesn’t matter, if I want to go to Bali next, I’ll use my IHG points. London? IHG. Hong Kong? IHG. It’s there!

Hey, that reminds me of the United hold music… “and there, and there!” Anyways…

Okay, what annoys me is this. “No don’t just earn IHG points for no reason.” Then someone doesn’t go for the opportunity to earn IHG points for a fraction of a penny by staying in other hotels. Then months later, “If you go to CVS with your fake ID and ask to speak to the manager and then go to walmart and blah blah blah, you can get points for 1 cent each!”

*Blinks*

That’s great. Why are we passing up the Big Win promotion?

Real life example. Last year I got 4 bedrooms at the crappiest hotel (Park Inn Houston or something) and earned a heck of a lot of Club Carlson points. That time I spent $60 a room and earned 44,000 points (while treating my family to a bad smelling hotel room). It earned me points at about .13 cents per point. Why? I had no plans at the time.

A year later, I have the credit card which gives me a free night per stay. I stayed at the Radisson Blu Budapest last month for 9,000 points, for two nights. 9,000 x $0.0013 = $11.70. $12 for two nights in a “4 star” hotel. That’s based on the high end of what I was paying.

Right now I’m writing from Salzburg. I’ve spent 6 nights here at the Radisson Blu. 6 nights for 84,000 points. 6 nights at an actual 4 star hotel for $109 and club lounge access.

Too bad I didn’t have a plan last year. Not!

Yes, I made a “not” joke.

Go Big or Stay Home

Ultimately, this hobby is about experiencing more with less. Period. When I say experiencing more, I mean seeing more places. And when I say less, I mean paying as little money as possible if not free.

When I first got into this hobby, I quickly racked up hundreds of thousands of miles for free. And people like to argue how free, free is and I mean I paid nothing. Does no one remember the mint? Anyways, I used to think paying money for miles was a sin. Why would anyone do that if you can get miles for free.

While it’s true, I found myself paying for all of my flights with miles and only some hotels with points. Now don’t get me wrong, for most people that’s enough for their vacation. But seeing as we travel nearly year round… why wouldn’t I buy miles?
My point is this, I use miles to get free travel and then later I run out and have to pay for travel. Then I started to jump on some promotions and realized that per night, I end up paying less for the 5 star hotel than I do whatever cheap place we normally stay. It’s quite a realization despite being really simple. That by paying for travel during big promotions, I can rack up cheap travel later.

The thing now is that miles don’t come in such large quantities for free like they used to. Now people are willing to pay a cent a piece via gift cards and all kinds of things. However, I don’t think this craze is sustainable and I don’t think it’s Steve Belkin news article worthy.

I hope he doesn’t mind me using his name as slang, but I’m going to run with it… “Is this is Belkin deal?” I’m not sure it has a ring but whatever. I only met the man once, but he seemed nice enough.

Who the heck is Steve Belkin?

Some guy who goes all out for deals. He’s probably most famous for “The Baht Run”. Essentially he ran the math on a promo after finding an $8 ticket in northern Thailand and decided he needed to jump on it. He hired three out-of-work farmers to fly the route 4 times a day for 3 weeks. (Is that info correct?). He racked up millions of miles for probably a couple thousands bucks. … Something like that.

But he’s had other big ones too. Paying college students to fly to Europe to keep their miles. Maximizing shopping portal deals. Another time he had 40 some people flying in First Class between Los Angeles and Las Vegas for two months and raked in over 10 million miles. It’s a matter of running the numbers and going big. If it’s a truly great promotion (in terms of cents per mile), and it’s scalable, do it. Go all the way.

Okay, here’s the reality…

Not everyone can take risks and be as innovative as Belkin. It’s not the future of frequent flyer miles. But people can easily buy gift cards from CVS. And oddly enough that could be the future of miles but not like it is now.

The banks make money when we spend money. It’s pretty simple. But on a category bonus of 5x, they are either losing money or the retailer is giving them a significant kickback. Either way, someone is loosing out as you are gaining 5% at the cost of 1% (the gift card fee). If this is a trend, they will end it.

However, they will always give miles for spends and there will always be deals to have. There will always be things to buy and ways to liquidate it. Gift cards is a not shady and easy way to do this.

As long as it’s this rewarding, go big. Sure. I can’t when I’m overseas but there are other ways to go big as well. Just like Pudding Guy. They are there.

These three are king:
Lower the cost of points. Increase the amount of points. Increase the profit.

I’ll continue on about the Big Win promotion. Here’s why it’s crazy that everyone is all “meh” over this promotion, because they only look at it from one angle. “50,000 points for 5 nights. I normally spend $200 on a hotel. So that’s 2 cents a point. No thanks, I’ll go pay 1 cent at CVS.”

I’m not saying that’s wrong… I’m saying it’s easy. You’re missing out big. Not because it’s such a good promotion, this is just an example. It’s an easy example, it doesn’t reveal too much, it has great potential for new IHG users and it’s not a big hit.

Take the three important earning elements and apply it here.

1) Lower the cost of points.

Don’t stay at $200 hotels to earn your points. For example. Use AAA. Go out on a weekend and find a cheapo HIX. If you stay at a $50 a night hotel, we’re down to .5 cents per dollar earned.

There are BRGs, even with other sites like Expedia, and other tricks to lower the cost of a stay. This is the first element.

2) Increase the amount of points earned.

This is the biggest problem with the math above. When you stay at IHG, if you’ve read my Earning IHG Rewards Points on Steroids, you know that you earn a lot of points already. If this promotion is bringing in 10,000 points a stay, I argue that you could bring in 10,000 points a stay doing other things!

There are other ways to benefit from the stay. That’s the key. Besides stacking promotions, there are shopping portal bonuses, credit card bonuses, etc…

3) Increasing profitability.

Big realization here; when I stay at a hotel it doesn’t just give me points, it gives me a room. I don’t want the room for a room later, but I could use some rooms now. For me, if I have to choose between paying for points on my credit card at CVS, or from staying at a hotel, assuming the pay out is equal, I’d choose to stay at the hotel.

That’s just one example but perhaps it helps with elite status qualifications, or meeting a spend requirement. I don’t know, but there are ways to increase profitability.

Scalability

The forth aspect is whether or not you can scale it. Once you’ve found a good source of really cheap miles, can you do it over and over.

Pudding guy is an example of many of these. If you’re familiar with the story, I believe he finds the healthy choice promotion and then buys a ton of cans. Then he tries to find a cheaper item. Later he donates a ton, gets help getting the labels and gets a tax write off. (He also kept some pudding for himself).

In many ways, he does many of the things I’ve mentioned, but the big one is scale. He orders freaking pallets of the pudding. In the end he spent thousands of dollars, got tons of pudding and 1.26 million miles.

Final Words

The funny thing is, that when ever someone mentions pudding guy earning a million miles from buying pudding… no one says, “he better have had a plan when earning those miles!” Right?

Now don’t get me wrong, if you are starting out, figuring out how to get enough miles to go where you want to go is the goal. But I’m sure I passed up a ton of miles starting out because I didn’t see the immediate benefit. I’m certain.

A lot of the best deals are probably had behind the scenes. But if you are in this long enough, an opportunity will be in front of you. “Should I spend the money on these pudding cups?” and your creative juices will be tested.

I think this is why everyone loves Frequent Miler. He made big deals accessible to the public instead of sitting on it. He innovated and people joined him. I really wish I was in the states when the 5x thing came about. … Or ever enough to use his advice.

But perhaps by sharing my philosophy on this, it will help someone take that step on being the next Belkin, Pudding Guy, or Frequent Miler. And if you do, you should tell me the secret method as thanks. :-p