#173: Education and Inspiration - Ideas for Airline Loyalty Professionals

PAULA: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals.

PAULA: I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

PAULA: This episode is brought to you by Collinson, worldwide leaders in loyalty, creating and orchestrating loyalty initiatives and programs for some of the world’s biggest brands in travel, retail, and financial services.

PAULA: Doing it globally for over 30 years.

PAULA: Want to know more?

PAULA: Go to collinsongroup.com.

PAULA: Hello, and welcome to my final interview 2021, which actually became a bit of a brainstorming session, all about how airline loyalty programs in particular could become even more successful and popular with members.

PAULA: My guest is Steve Hui, CEO of an Australian company called I Fly Flat, which helps people understand, find, and book redemption seeds as easily as possible.

PAULA: Steve is also known as the points whisperer.

PAULA: And as you’ll hear, he really believes that redemption flights are one of the biggest ideas available to delight customers.

PAULA: So I know for sure that all of you listening certainly agree with that one.

PAULA: I hope you enjoy my fun session and all the great ideas we shared.

PAULA: So please enjoy my conversation with Steve Hui from I Fly Flat.

PAULA: So Steve, I’m so happy to be talking to you today.

PAULA: Welcome to Let’s Talk Loyalty.

STEVE: Thank you very much, I’m very excited.

PAULA: Great, great.

PAULA: Listen, I love lots about what you do.

PAULA: The company name, I think, is what first caught my attention.

PAULA: So I Fly Flat is something that I think everyone who knows you must be super jealous of.

PAULA: So first of all, congratulations, it’s a great name.

STEVE: Thank you very much.

STEVE: And it’s a name which I think everyone can adopt, because everyone can I Fly Flat themselves.

PAULA: Yes, absolutely.

PAULA: Yeah, and even on your LinkedIn, Steve, I know you talk about working your way towards the pointy end of the plane.

PAULA: So again, for everyone listening in the loyalty industry, I think it’s just a lovely, simple way.

PAULA: And I know you predominantly talk to consumers.

PAULA: So it’s great to have you on the show today to represent particularly Australian consumer interests.

PAULA: So with that said, let’s get straight in, Steve.

PAULA: We’re releasing the show at the end of December.

PAULA: So Australia has been open just actually quite a short time for travel again.

PAULA: But share with us the statistic about loyalty in Australia and that you just shared with me.

PAULA: It’s absolutely incredible.

STEVE: Yeah, so recently 7 billion Qantas Freakin Fly Funds have been redeemed by Australians traveling domestically and overseas.

STEVE: So that shows how much paint up demand there was for who had points to use them and book a flight.

PAULA: Oh my goodness, yeah.

PAULA: I mean, Australia is such an extraordinary market, Steve, from a loyalty perspective.

PAULA: And as I said to you, people listening to this show are in all areas of loyalty, not just airlines, they’re also global.

PAULA: So they’re in the US, they’re in the UK.

PAULA: But what I love is that you’re really inspiring people to particularly have premium experiences when it comes to travel.

PAULA: So ideally, as we talked about, flying flat.

PAULA: But yeah, I think the pent of demand probably hasn’t been estimated or really just publicized to the same extent.

PAULA: So can you maybe give us a sense, seven billion Qantas points, what would that translate to maybe if we were to say, if I wanted to fly from Sydney to London, let’s say in business class, of course, which we all aspire to do.

PAULA: Tell me, first of all, how many Qantas points would it take me to make that return business class trip?

PAULA: It’s obviously a long way.

STEVE: Yeah, so 289,200 Qantas points would get you one person business class return.

PAULA: And I know you’ve done the maths as well.

PAULA: So how many, that seven billion points that Qantas shared with us that have been redeemed in their first month being open.

PAULA: So how many people could have done a trip like that?

PAULA: Just tell us how the maths work out.

STEVE: Yeah, I think I’ve worked out just about 24,000 business class flights that worked out to be.

STEVE: And it became interesting, I thought, well, how many Qantas planes would that take?

STEVE: Because the whole plane has only got 42 business class seats.

STEVE: So it worked out that it’s about 570 planes back and forth, back and forth, in order to fill those people.

STEVE: So that gives you a great visualization of all the planes you need to fly overhead to get all those civilian points underway.

PAULA: Unbelievable.

PAULA: Well, listen, it’s a great way to start the show, Steve.

PAULA: As I said, I just think it’s extraordinary how much pent of demand.

PAULA: I mean, the Australian borders were closed for how long?

PAULA: About 18 months, I think, in total, wasn’t it?

PAULA: Wow, okay, so.

STEVE: In or out, so fairly limited coming in and no one’s going out unless you had a travel exemption that you had to apply for.

PAULA: Yeah, yeah, absolutely.

PAULA: So listen, you have this company we’ve talked about.

PAULA: You’re in the business, I suppose, of first of all raising awareness of the extraordinary value that a lot of people are missing out on from understanding how easy it is to collect points, whether that’s obviously with travel, with on the ground behavior, so frequent buying, for example, with airline partners, obviously credit cards, so all of the usual ways.

PAULA: But I think what we’ve shared, Steve, and what you do so well is to educate people on how to use those points in a way that’s the best value for them.

PAULA: And you have a whole team literally providing that service to help them enjoy it.

PAULA: So tell us why did you start the company?

PAULA: How did you realize this problem?

STEVE: Yes, so my background, I’m an accountant, so I’m in finance.

STEVE: So I’ve actually still got my CPA.

STEVE: And I think when you have a accounting mindset, you’re always looking for where is the value?

STEVE: Where can you create something out of nothing?

STEVE: And to frequent fly points or something that I just came across accidentally, when I was early in my career, and I could start flying business class, when you did not have to pay money to fly yourself, the company will pay you business class.

STEVE: And I started to enjoy business class, but I started to collect frequent fly points along the way.

STEVE: And prior to that, I had no interest because I didn’t have any frequent fly points.

STEVE: But once you start accumulating frequent fly points, you’re like, what can I do with these points?

STEVE: And very quickly, I worked out that if you could accumulate enough frequent fly points, you could book yourself a business class flight for yourself.

STEVE: Which meant that you save thousands of dollars versus buying a ticket.

STEVE: And that was the big light bulb moment for me, that frequent fly points were really valuable.

STEVE: I would say worth more than money in some cases.

PAULA: For sure, yes.

PAULA: And the emotional value as well, I guess.

PAULA: So yes, as an accountant, obviously, you’re tuned in to the savings, but you bought into it as well as somebody just who loves that experience.

PAULA: So that won’t be news to anybody listening.

PAULA: We all share, I suppose, that beautiful understanding.

PAULA: But why did you decide that you needed to set up a company to actually make the bookings for people?

PAULA: Because what I suppose most of us listening would assume is that if people are so engaged and so inspired, surely they know how to go ahead and find the seats and book them and get good value.

PAULA: So where was the gap that you identified?

STEVE: Yeah, so finding Freak and Fly seats is actually the biggest pain point of the entire program because earning points is quite easy.

STEVE: So some people might earn points by accident.

STEVE: So as you fly, you earn points.

STEVE: If you’ve got a credit card that earns points, you earn points, but you might not have got that credit card on purpose.

STEVE: You might have just got the credit card because it’s got a nice annual fee or maybe you like the color of the card.

STEVE: So you start earning these points by accident.

STEVE: So people don’t go trying to discover how to use those points.

STEVE: Because mainly because those points came for free.

STEVE: Because you got them for free, you accumulate them, then one day you’re like, well, I’ve got these points, what should I do with them?

STEVE: And actually the moment for me came was when I bumped into a friend and they had just redeemed, I think, about 150,000 points for the latest iPad that came out.

STEVE: And that iPad was only about maybe $1,000 retail, which is a lot of money at the time.

STEVE: For the same number of points, you could have got yourself a business card seat that sold for $4,500.

STEVE: And that’s really the time when I thought.

STEVE: Actually, if people knew how to use the points to find trouble, financially, it’s much more valuable than getting an iPad.

STEVE: But people talk about trouble, and they talk about trouble throughout the years.

STEVE: They talk to their kids about it.

STEVE: They talk to their friends about it.

STEVE: But fairly rarely was, say, people talk to other people about the iPad.

STEVE: So in terms of the experience, using points to travel and actually using points for something like business class is something that most people, they may not pay for.

STEVE: And that’s what I found out.

STEVE: And that’s why I started the business of trying to help people utilize the points they’ve got and turn them to some experience, which otherwise they couldn’t find themselves, or they didn’t want to pay business class themselves, even if they had the money.

PAULA: Yeah.

PAULA: Yeah, I think sometimes in principle, the idea of paying, whatever it is, I think I usually compare it to about triple the price if you’re buying cash in terms of a business class flight.

PAULA: It’s quite hard to justify for most of us who spend a lot of time earning that income.

PAULA: So yeah, it’s just easier to say, maybe I’ll just travel economy and just suck it up.

PAULA: But yeah, we all want to be flying flat, so that’s amazing.

PAULA: So it’s a brilliant service.

PAULA: I know obviously like everyone in the travel business, you must have had a tough time yourselves over the last 18 months.

PAULA: But you did share with me some, I suppose, ideas for loyalty professionals.

PAULA: So bearing in mind, of course, this show is being listened to, as we’ve talked about, all over the world by people in lots of industries.

PAULA: But just again, representing consumers’ interests, what do you think loyalty professionals could do better to help, I suppose, more, let’s say, on the burn side, because as you said, I think we’re all very clear on our partnerships and our earning mechanics.

PAULA: But what we talk about, and actually it’s come up a lot in the last few shows, is, you know, burn drives earn is actually a phrase that KLM quoted to me.

PAULA: And they’ve done all of the analytics to say, it’s only after, as loyalty professionals, we have given a reward that we see the earning behavior also then really grow, because people trust the whole system.

PAULA: So what do you think we can do as loyalty professionals to help consumers, first of all, understand the value, and secondly, then have this beautiful redemption experience?

STEVE: Yeah, I think number one thing is just helping people understand the program and how authentic it is.

PAULA: Yeah.

STEVE: The fact that there are freaking fly seeds out there, and it is achievable to get them.

PAULA: Yeah.

STEVE: Because I guess in this day and age, consumers, they don’t read the terms and conditions, they don’t read the owner’s manual, because every single device is just turn it on and start using it.

STEVE: But the whole idea about trying to understand something, it’s very different because at university, you learn something.

PAULA: Yeah.

STEVE: But once you move into the workforce and you get older, you don’t learn anything because, so I think what happens with freaking fly programs and loyalty programs is they’re complex, and people don’t want to take the time to understand them.

STEVE: They just want to use them.

PAULA: Yeah.

STEVE: So taking that idea, the fact that people just want to use them because they just want to turn the Apple device on, and it gets working.

STEVE: In a way, Apple doesn’t even give an owners manual because they know no one will read it.

STEVE: They just make it intuitive.

PAULA: Yeah.

STEVE: So I think in a way, if people, if loyalty professionals want their users to be using the points, they have to make it intuitive to find these seats, which is actually what people come to the loyalty program for.

PAULA: Yeah.

STEVE: Sometimes some people might redeem points for a Fitbit or some gift voucher, but that’s not really why they join the program.

STEVE: In terms of Freak and Fly programs, they really join the program in order to fly.

STEVE: And if when they’re trying to redeem points and they can’t find a seat, then they become disillusioned and think, oh, this is just a promise.

PAULA: Yeah.

STEVE: It’s actually a promise that’s been broken because I’ve got points and I can’t find a seat.

PAULA: Yeah.

STEVE: And I’m not stupid, so therefore this system must be a scam.

PAULA: Yeah.

STEVE: And then they withdraw from it and they don’t reengage.

PAULA: Well, absolutely.

PAULA: And dare I say it, it’s disloyalty.

PAULA: So if anything, we’ve probably damaged the customer relationship that we have spent so much time, money and energy, obviously trying to create.

PAULA: So definitely, now, and again, I mean, I’ve worked in the airline industry and that’s definitely one where I would say that’s the revenue management people that I’m sure all the loyalty professionals listening are pushing for more reward seats to be available.

PAULA: So I think in principle, that’s absolutely right.

PAULA: I’ve certainly seen some good announcements, for example, coming out of the UK.

PAULA: And again, post-COVID, I think there’s more inventory has been created.

PAULA: But you also gave a brilliant idea, Steve, when we talked before, which I would love you to share.

PAULA: And I’m sure this is complex technically.

PAULA: So, I suppose that the privilege we have is to be able to just give the idea.

PAULA: Somebody else can figure out if it’s possible or not.

PAULA: But I did talk to a technology guy.

PAULA: So also I did say, is this actually feasible?

PAULA: But listen, it’s just for listeners to understand.

PAULA: So what you were suggesting, Steve, was, let’s say I’m sitting here in Dubai and I reach a threshold, let’s say 90,000 points with Skywards, which we all know I fly and love to fly.

PAULA: So at that point, I know, thankfully now, that I have enough points to fly, let’s say business class home to Dublin.

PAULA: But it’s only recently I’ve understood that.

PAULA: So I think what you were suggesting is, why don’t the airline frequent flyer programs notice and proactively send out communications to members to say, did you realize you now have enough points to get home to Dublin or to get to Dublin?

PAULA: So I’d love you just to talk through that.

PAULA: I think it’s absolutely genius, Steve.

STEVE: Yeah, thank you.

STEVE: It all comes down to making points use this, like convenient for people.

STEVE: So people are earning points subconsciously or consciously because they’re just living life, they’re flying and spending money and earning these points.

STEVE: So what they don’t know is what doors do when you reach certain teaser points, do they open up?

STEVE: Because unlike me, they don’t study the program.

STEVE: They don’t try and find the gold nuggets.

STEVE: So if you want something to engage, then the magic is helping them understand that.

STEVE: I think it’s both.

STEVE: For taking your example, you reach 90,000 points as a threshold.

PAULA: Yeah.

STEVE: Because there’s so much marketing emails being sent by airlines all the time, like marketing, this and that, wine and flights.

STEVE: Well, they could also market in a way to the customers, your 90,000 points can now get you a flight to somewhere, and that would be 70,000 points.

STEVE: And also market above that.

STEVE: So for 120,000 points, you unlock this other flight.

STEVE: So then people know that at the 90 marks, should I spend it or should I save it?

STEVE: Or something else.

STEVE: And then that then is great for the program because it even encourages the redemption or encourages further behavior that will accelerate their points earning.

STEVE: Because now they know that at 90, to get to 120, maybe they could have flew first class to Dublin.

STEVE: So what will be worse is someone who spent the points at 70,000 points to fly premium economy.

STEVE: They could have easily gotten extra more points to fly first class, and then that attachment to the brain and that attachment to airline will be cemented forever.

PAULA: Yeah, and you’re right.

PAULA: And you’ve reminded me, Steve, of a really good insight that also came through in a previous show with research, academic research out of the US, where they talked about that acceleration that you mentioned.

PAULA: So there is now absolute evidence that the closer we get to our goal, that the quicker our behavior starts to literally accelerate.

PAULA: And again, it’s almost like as soon as you’re told that as a loyalty professional, you realize, well, of course, that’s how people behave.

PAULA: But actually, I had never thought about it before until I literally heard about it.

PAULA: So you’re absolutely right.

PAULA: If you can say you only need another 10,000 to get to the first class, which I haven’t done as a commercial passenger, I absolutely think that would definitely go, I would certainly be off on my credit card doing God knows what damage.

PAULA: So yeah, so there’s the added benefit of, yes, we want to encourage you to redeem.

PAULA: And again, I’m sure that would come with all of the concerns about accessibility and inventory that we talked about, but then the upsell or the opportunity to go one better and to give somebody awareness of the next biggest threshold that they can reach.

PAULA: I just love this idea.

STEVE: Yeah, because I think maybe because some of these the loyalty programs have been around for a while, there’s an assumption that there’s a prerequisite or knowledge out there already.

STEVE: And sometimes they call it, for entrepreneurs, they say it’s the curse of expertise that you’ve been doing it every single day.

STEVE: You know everything like the back of your hand, but actually there’s brand new customers coming to the program every day that don’t know anything.

STEVE: So how about information asymmetry, because you’re talking about something that you talked about for 1600 times that week, but that other person have only heard it for the first time.

STEVE: So that’s why there’s sometimes a big gap between getting people to do something and people actually knowing what to do with them.

PAULA: And another thing that I think is an opportunity, Steve, is different formats of communication.

PAULA: So again, I receive lots of communications from loads of loyalty programs.

PAULA: And again, not just flying, which is probably the most aspirational, but it still always seems to be in predominantly email format, which has been around for 20 years.

PAULA: And yes, it performs extremely well, but clearly I’m a fan of audio.

PAULA: So branded podcasts, I believe are a massive opportunity.

PAULA: I also believe video, you know, dedicated video content for loyalty programs would be super helpful, you know, to take somebody through that entire journey of now you’ve just joined whatever program, you know, here’s what we recommend you do first.

PAULA: Here’s the partner, like literally a handholding exercise.

PAULA: Like is that happening in your view or is that something that maybe could do more of?

STEVE: But they definitely could do more of and also links to the fact that different people in the educational space, people would notice that different people learn and absorb information in different ways.

STEVE: So some people are reading, some people audio, some people visual, some people have to experience it to learn.

STEVE: So now that we know that in education, they do that.

STEVE: But it seems like these loyalty programs, they’re still very old.

STEVE: Everything is written.

STEVE: So that’s why it’s all email.

STEVE: Everything is written to you.

STEVE: When you join, they send you a membership card and they give you a booklet.

STEVE: It’s all written.

STEVE: So what that does is it only talks to a certain type of person, an athlete or people that can understand that.

STEVE: So like lawyers will give, you can give them 200 page document.

STEVE: They’ll read for it, happy chaps.

STEVE: But imagine you’re giving 200 page document to someone else.

STEVE: They’ll throw it out and say, well, just tell me about it.

STEVE: So I think loyalty programs, now even the really big loyalty programs, it would be smart for them to think about all the different ways that the customers need to hear the message, because not everyone are great at reading the material anymore.

STEVE: And I do feel that they’re stuck in the, if I give you the terms and conditions, you must have read it, right?

STEVE: And I think that’s when they move on and they start losing their audience participation.

PAULA: And you’re absolutely right.

PAULA: You made the point that there’s new people joining every day, and that’s something we have to keep in mind.

PAULA: And I also think there’s an awful lot of research about, particularly younger demographics, because obviously when we’re younger, we’re probably flying less frequently.

PAULA: But what I’m not seeing, for example, is the use of really alternative channels, like what if you could send them their Frequent Flyer membership on Snapchat, for example, or WhatsApp?

PAULA: I’m thinking of the teenagers in my life.

PAULA: And I think about, again, being in an airline and trying to get people at that age before they make decisions about who they’re going to be loyal to.

PAULA: So why not connect with them and the channels that they want?

PAULA: As you said, a printed booklet, it feels like its time has come and gone.

STEVE: Yeah, that’s right.

STEVE: Just go to electronic, just go to visual, audio as well.

PAULA: Yeah, for sure.

STEVE: I think we came across some good ideas just then.

PAULA: I was going to say, Snapchat, I hope you’re listening.

PAULA: So, you know, you heard it here first.

PAULA: But the other one, Steve, which I think I mentioned to you, part of what I suppose I love about doing this show is to be able to take ideas from one industry and suggest them to another.

PAULA: And I think what we were talking about before we came on air was the idea of even incentivizing this content consumption as a possible idea for loyalty professionals.

PAULA: And I came across this with an insurance company, you know, some great guys down in South Africa, Old Mutual, and what they had identified is, you know, a real knowledge gap in that country around insurance products.

PAULA: So it’s one thing to, you know, again, to send the emails and to provide the content, but when they added in the loyalty currency and a reason to pay attention to the video, and again, I don’t know technically how they make that work, but I think if I was an airline loyalty professional now as well, to me, that would be a brilliant idea.

PAULA: Let’s start, you know, inspiring, certainly the leisure travelers and giving them whatever currency, whether it’s Qantas points or Velocity with Virgin in Australia.

PAULA: So do you think that’s something that loyalty professionals could consider?

STEVE: I think that’s pretty clever because the loyalty program, they can print their own money, so to speak.

STEVE: And of course, you can just track it as an internal cost.

STEVE: But what I know is the more people understand the program, the more they will engage the program.

STEVE: And then even better is as they move through their careers, for example, they earn more money, they spend more money, and then they make choices about which airline to fly, which credit card to use, which partner to use, and all that stuff will all pay off versus someone else who might be a member of the program, but they don’t understand the program because they’re never bothered to learn it.

STEVE: And it gets to a point sometimes where you’ve been, I guess it’s also the same as a job is, the first three months, ask any question, no question is stupid.

STEVE: But after that, there’s assume that you must know enough now.

STEVE: So if you’re still asking stupid questions in month six, hmm, what’s going on here?

STEVE: And then I think what happens also is that, for example, that employee after six months, why not ask any more stupid questions?

STEVE: Because they think you know, they think that you know, and you can’t ask anymore.

STEVE: And I think that’s what happens to loyalty programs.

STEVE: They’ve been in it for so long, they’ve earned some points, and they think that they know, and that’s it.

STEVE: They don’t even bother to learn anymore.

STEVE: But maybe they’ve only just literally scratched the surface.

STEVE: An idea to incentivise them to, I guess, learn more about them means that, at least when they pop out of the end of that sort of funnel, they are now much more wiser than when they went in.

STEVE: And then they can make a conscious choice to what level to engage with the program.

PAULA: Absolutely.

PAULA: Yeah.

PAULA: And I don’t even think it would need to be like a hugely generous points incentive.

PAULA: Totally.

STEVE: Yeah.

PAULA: It’s like you’ve just given me a reason.

PAULA: I’m sure a threshold is somewhere that somebody could figure out.

PAULA: Yeah.

PAULA: No, I think it’s a super fun idea.

PAULA: So super, super cool.

PAULA: And then the other thing I think you’d suggested, Steve, was the opportunity for an online booking engine, perhaps, that would show the actual inventory for reward seats.

PAULA: And in the stylus was a travel agency, because again, certain airlines, you can go in and just book your classic rewards flights, no problem.

PAULA: But I think what you were talking about is the idea of a travel agency creating that type of booking platform.

PAULA: So tell us a bit about this idea.

STEVE: Yeah, so that’s what would be my holy grail, because in a way, what we do right now is find those seats for different airlines and manually find them, so like fishing.

STEVE: But what will be ideal is that if you have an engine that could suck a hump, if you’re looking for a flight to Europe, maybe just take an example, flying from Sydney to London, you’ve got different airlines, you’ve got Qantas, you’ve got Singapore, you’ve got Cafe via Hong Kong, you’ve got Emirates, you’ve got Etihad, you’ve got Qatar, you’ve got Thai, you’ve got British Airways.

STEVE: Imagine, there’s lots and lots of airlines.

STEVE: Well, if you can put in a set of dates and you’ll suck out all the inventory on all those different airlines, then you can choose or you can find freaking flight seats.

STEVE: But right now, you have to go into each of those separate airlines, search individually for the dates you want.

STEVE: So if someone was going to do that, they’re going to not have any time to work because they will still be searching for seats.

PAULA: Well, you know what?

PAULA: I think with that, current pain point, it certainly will keep you busy and your whole team.

PAULA: So obviously, we don’t want to put you out of business, Steve, but again, you’re only available as an expert in the Australian market, as far as I understand.

PAULA: But definitely, I think it’s a global problem, as far as I’m aware.

PAULA: So hopefully, there’s somebody from some big tech company that might be listening to us and think about how they can make the redemption process easier and, let’s say, more consumer focused.

STEVE: Yeah, that definitely is a holy grail.

STEVE: But on the flip side, compared to, say, a GDS and what that’s done to find seats, unfortunately, there’s no money in redeeming seats.

STEVE: There’s no money to be made.

STEVE: So therefore, that’s probably why there’s no effort going into building a solution.

PAULA: But I presume, for example, you charge a service fee to the people who use your service.

STEVE: Oh, yes, yes.

STEVE: For us, we charge a service fee.

STEVE: I guess you mean that the IT solution could charge a service fee?

PAULA: Exactly.

PAULA: Totally.

PAULA: Yeah, yeah.

PAULA: And I’m glad you mentioned subscription, actually, because that’s obviously a hot topic in loyalty.

PAULA: Is there anything happening in subscription-based loyalty in Australia at the moment?

PAULA: Or what are your views on it?

PAULA: Do you think it’s an opportunity for airlines?

STEVE: Yeah, nothing I’ve seen in Australian market that’s subscription-based.

STEVE: Obviously, lounges are subscription-based, but that’s just a lounge component.

STEVE: It doesn’t add anything else to the rest.

STEVE: The only subscription service product I’ve seen is the one that’s coming from Emirates.

STEVE: Where there’s free levels and you pay different fees, and you ever get, I think, extra baggage, or one of the levels gives you 20% discount on die-wood redemptions, which is my favorite.

STEVE: And there’s other bits and bobs where you get more points when you fly.

STEVE: So that’s interesting because what they’ve done is they just rejected the tools to give different benefits for a price.

PAULA: Yeah.

STEVE: But I do find this quite interesting area because everyone’s looking to the Amazon Prime model.

PAULA: Yeah.

STEVE: And if they can get all the whole population paying X dollars per year, they generate amazing revenues.

STEVE: So everyone’s probably looking towards that.

STEVE: But what the non-fifth side is, unlike, say, Amazon Prime, airlines is very infrequent business.

STEVE: So a frequent flyer might fly frequently.

STEVE: But most other people are infrequent flyers.

STEVE: And then every time they get to choose, well, actually, every time they’re choosing two things, one is they’re choosing where they’re going and which airline to fly on.

STEVE: And where they’re going, that same airline may not always service where they’re going.

STEVE: So I guess in Australia, Qantas is the one that servers everything.

STEVE: But, for example, if you’re picking and paying for the Emirates subscription service, that’s only useful if you’re flying Emirates.

STEVE: And that’s generally towards from Australia over the Europe area.

STEVE: So if you’re flying to, say, Los Angeles, you wouldn’t use the Emirates product, even though you got a subscription to it.

STEVE: So that makes it very hard for people to keep paying money for subscription when they might fly, say, six times a year, which is fairly frequent.

STEVE: Free flights, Europe way, free flights, USA way, that means that they’ve only used that subscription three times that year.

PAULA: Yeah.

STEVE: It makes it very hard to justify renewal.

PAULA: Yeah.

PAULA: No, I agree, Steve.

PAULA: I think so many people are struggling to get this subscription proposition really to be absolutely compelling.

PAULA: And again, an airline has the added complexity of the global nature and existing infrastructure and benefits, obviously, with our frequent flyer program.

PAULA: So I think you’re right.

PAULA: I think there’s more to come in that particular space.

PAULA: So definitely one will be watching.

STEVE: I’ve got one idea from it, though.

STEVE: I’ve got one idea about that.

STEVE: So because it’s all about loyalty, potentially there should be a discount for multi-year customer subscription.

STEVE: Because if you’re paying the same amount every year, that means that you can stop paying this year and start next year, and you suffered no potential loss.

STEVE: So to encourage you to be ongoing, there should be a discount for every subsequent year.

STEVE: So therefore say by year six, you’re not going to give up that subscription because otherwise you got to start up again from scratch and pay a higher fee.

STEVE: So that’s a free tip on how to get people sticky.

PAULA: Yes, sticky.

PAULA: Yeah, the boring term that we would use in other utilities, for example, is rewarding tenure.

PAULA: So recognizing that somebody has stayed for, I remember actually a close friend of mine when I started working in loyalty in Telcos, and she was like, I’ve been a customer there for 10 years and nobody’s ever thanked me or acknowledged my loyalty.

PAULA: And I remember that being very shocking to me because again, the thank you part is probably the one that I think we could all do more of.

PAULA: Let’s be grateful and we all hear it as a good practice.

PAULA: And I suppose we forget to do it sometimes when it comes to our business and our loyal customers.

PAULA: I think you’re absolutely right.

PAULA: So yeah, you heard it here first.

PAULA: We’re full of the ideas today, Steve.

STEVE: And actually that links to an earlier part of the conversation about when you reach a certain amount of points.

STEVE: So if you say you reach a million points, which is a large number in anyone’s eyes, some recognition for that, because whether you earn a million points by flying or by spending, that just means you’ve, in a way, you have spent significant effort to collect those points.

STEVE: So some sort of recognition for that as well.

STEVE: So I think there’s a few ideas there.

PAULA: For sure.

PAULA: And sometimes I think that can just even be for the ego.

PAULA: My ego certainly would be super impressed if somebody went, my God, Paula, that’s amazing that you’ve got a million points.

PAULA: Because first of all, I’m sure I would have noticed, but for the brand to notice would definitely make me feel good.

PAULA: And then the bragging rights.

PAULA: I mean, I don’t know what it would look like, but definitely bragging rights, word of mouth marketing.

PAULA: I think there’s a missed opportunity in there that people…

STEVE: Even the accumulative format, because as a user, you only ever know how many points you got now.

STEVE: You may have accumulatively spent a million points already, but you’re not aware.

STEVE: But the program is very much aware how much you use.

STEVE: That would actually be a real surprise when you get an email or a gift saying that, thank you, Paula, you’ve utilized 10 million points with us.

STEVE: And you’re like, really?

PAULA: Yes.

PAULA: Oh, my goodness.

PAULA: Oh, I love it, Steve.

PAULA: Super exciting.

PAULA: I think the ideas are just going to keep flowing now today.

PAULA: So, yeah, we’ll have to start selling our consulting services soon.

PAULA: Absolutely.

PAULA: Great stuff.

PAULA: So, listen, two other propositions I wanted to quickly just mention for listeners because they’re both very relevant to Australian members particularly, but also might be interesting around the world.

PAULA: One is the Qantas Frequent Buyer Club.

PAULA: I think it’s called the Qantas Club.

PAULA: I’ll ask you just to…

PAULA: The Points Club.

PAULA: Maybe just to tell us a bit about that.

PAULA: And the other one, which I just I know it’s literally hot off the presses, but Accor Hotels, who in fact are on my show today, the end of November, have launched a double dip proposition with Qantas.

PAULA: So you earn both currencies for literally flying or staying with those two partners.

PAULA: So yeah, maybe just any thoughts you have on these, I suppose, new ideas in travel loyalty.

STEVE: Well, I’ll talk about the Qantas Accor one first.

STEVE: That’s really exciting because you are truly double dipping.

STEVE: So if you’re a member of both, if you fly Qantas, you earn Qantas points and you earn Accor points.

STEVE: If you stay at Accor, you earn Accor and Qantas points.

STEVE: So that’s a truly double dip.

STEVE: That means that I call it raining points because you can’t not earn points these days.

STEVE: So I think that’s a deepening of the relationship between Accor and Qantas because Accor has always been looking at the Qantas lounges for a number of years now, and operating and making sure that they are a fantastic standard.

STEVE: So that was out of the blue and I really like that one.

STEVE: In terms of the Pointers Coins Club, that came out probably maybe just pre-pandemic.

STEVE: And what that is, is Qantas has recognized that a large portion of their points earners are earning them not by flying, but by spending.

STEVE: And in Australia, there’s a growing B2B payments by credit cards where companies are paying other companies by credit card and not by bank transfer.

STEVE: The Pointers Club was, I believe, developed to reward the customers who are earning a large number of points on the ground and encourage them to do so, but also giving them some recognition that it’s not just all about points earned by flying, which traditionally is what a free comply program is all about.

STEVE: They’ve done it on two levels.

STEVE: They’ve got the points club and points club plus.

STEVE: And what they say is that you have to earn 150,000 points a year on the ground to get points club and then 350,000 points to get the plus version of that.

STEVE: And obviously, there’s some different rules around that.

STEVE: When you get the points club plus, you actually get hold of Quantas Club membership.

STEVE: So you don’t have to buy a membership to get access to the Quantas Club lounges.

STEVE: And there’s other things like wine, club discounts.

STEVE: And actually, one very interesting thing is that if you’re a member of the points club, you can earn status credits when you fly on redemption tickets.

PAULA: Oh, nice.

STEVE: So that’s a new thing.

STEVE: Definitely in the Australian market, maybe even in other markets, although I noticed, I think, American Airlines just did something similar.

STEVE: But it’s actually quite rare.

STEVE: Just in the past, redemption tickets mean you’ve got no status credits.

PAULA: Totally.

STEVE: But now you can, if you’re a member.

PAULA: I think American have done that.

PAULA: Yeah, brilliant.

PAULA: And just ahead of today’s show, Steve, I looked up what I remember being my favorite loyalty statistic actually ever.

PAULA: Because obviously I ask everybody their favorite loyalty statistic.

PAULA: But literally the one, and this was published in August 2020, so there might even be a 2021 update.

PAULA: But it was just, I suppose, the value particularly of Qantas loyalty as distinct from Qantas airline.

PAULA: So this figure that I found today said that Qantas obviously unfortunately so badly impacted like everyone by COVID.

PAULA: The 2019-2020 revenue figures was a loss of 2.7 billion Australian dollars.

PAULA: However, Qantas loyalty made the single biggest contribution, which was a $341 million profit in that same period.

PAULA: So I often remember at the loyalty conference that it was quoted as at the time saying that Qantas loyalty was more valuable than Qantas international travel.

PAULA: So this was when I kind of sat up and went, oh my god, this business is amazing.

STEVE: It’s an amazing business to make money throughout the whole pandemic and will continue to make more money without any of the issues that airlines have with weather, like volcano ash and all that stuff.

STEVE: The loyalty program continues to make money 24 hours a day.

PAULA: Totally, yeah.

PAULA: And again, I suppose what seems to be almost unique in the Australian market, if I’m right, is the two airlines really almost operate as the coalition programs that many other countries would actually operate literally in partnership, let’s say by a leading grocery player in conjunction with a fuel player, or it’s much more strongly led by airlines in Australia.

PAULA: So I think that’s why there’s so many learnings coming from what you do and that I think can be applied to other markets.

PAULA: Yeah, that’s right.

STEVE: And in Australia, like Coinus and Virgin, they sort of really made their retailers pick a side.

STEVE: You want to offer your customers Coinus funds, you want to offer your customers Virgin funds.

STEVE: And so it’s very easy to earn points in the evening.

PAULA: Yeah, wonderful.

PAULA: Well, listen, with all our fabulous brainstorming and suggestions for everyone coming into 2022, Steve, I think I’ve asked all of my questions.

PAULA: Have you any other, I suppose, important topics that you think we’re literally releasing this show now December 30th?

PAULA: So anyone listening, I’m sure is going to be all excited for what’s coming up in 2022.

PAULA: But any closing thoughts or suggestions from your side?

STEVE: Yeah, I think like obviously with the pandemic, many people had to cancel their travel or not travel.

STEVE: So 2022 and beyond is where you pick up all those bucket lists trips and just book and go again.

STEVE: So there’s times.

STEVE: Of course, I always recommend the best way to fly is to use points to fly business class or first class, because that’s much more exciting than getting a toaster or a vacuum cleaner with those points.

STEVE: And even much more exciting than paying them with money, because getting something basically for free is like one of life’s great joys, along with getting free champagne and free caviar on board the plane.

STEVE: So people say there’s no such thing as a free lunch, but I say there is.

STEVE: There’s free lunch, there’s free champagne, there’s free caviar, and there’s also a free flight if you still get your points right.

PAULA: Brilliant.

STEVE: We’re all very excited about it, always.

PAULA: Oh, fantastic.

PAULA: So listen, Steve, if people do want to connect with you, I know, first of all, actually, also you’re so famous in Australia that actually we can’t do a connection on LinkedIn because you’re up to the maximum.

PAULA: But people can follow you there.

PAULA: So where’s the best place?

PAULA: Is it LinkedIn or other channels that people can reach out if they have questions for you?

STEVE: Yeah, I think LinkedIn is best, and that’s under Steve Hui, so S-T-E-V-E, H-U-I is the surname.

STEVE: So LinkedIn, because I post most of my content through LinkedIn.

STEVE: So if you follow me, you get the content.

STEVE: I’m also on Instagram a bit for a bit of fun, and that’s just at I Fly Flat, and you find me there, and that’s more just interesting photos and things.

STEVE: But yeah, LinkedIn is where all the actions are.

PAULA: Okay, well, listen, I have really enjoyed our conversation today.

PAULA: So Steve Hui, CEO of I Fly Flat, thank you so much from Let’s Talk Loyalty.

STEVE: Thank you very much Paula.

PAULA: This show is sponsored by The Wise Marketeer, the world’s most popular source of loyalty marketing news, insights, and research.

PAULA: The Wise Marketeer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 170 executives in 20 countries as certified loyalty marketing professionals.

PAULA: For more information, check out thewisemarketeer.com and loyaltyacademy.org.

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