Example: let say that airline ABC treats customers very well for the first 20,000 miles (new clients get window or aisle seats), but after that you get treated poorly (you always get a middle seat). As a result, some faithful clients switch to another airlines XYZ after a while. But XYZ plays the same game: window or aisle seat for the first 20,000 miles, then always a middle seat.
Is this a viable long-term business model? Essentially ABC and XYZ focus on stealing clients away from each other, and after a certain point (let's say that after 20,000 miles the cost of user acquisition is offset by gains from repeat business) they "drop" the faithful client and want to replace her with a new client.
Are there any analytical studies saying that this can be a good strategy, from a business viewpoint?