Audio Transcript

#189: Cathay Pacific Airways Launches Lifestyle & Wellness Innovations (46m)
Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. 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. This episode is brought to you byEpsilon and their award-winning people, cloud loyalty solution personalization should be integrated into the entire customer experience, including your loyalty program. With this in mind, Epsilon recently released a guide outlining six key components that will put you on the path to personalizing the entire loyalty experience.
Paula Thomas

00:00:50
This guide challenges you to do some housekeeping and reconsider how you think about your current and future loyalty personalization efforts. So to download your copy of the report, visit epsilon.com/Letstalkloyalty. Hello, and welcome to episode 189 of Let’s Talk Loyalty today. I’m back in conversation with a guest based in my favorite city in the world. Paul Smitton from Cathay Pacific Airways is based in Hong Kong, a place which prides itself on many things, including its focus on innovation.
Paula Thomas

00:01:36
So with the airline, having recently celebrated 75 years of flying today, we’re going to learn some of its latest innovations in terms of its brand, and of course its loyalty and lifestyle businesses. So please join me in welcoming Paul Smitton, the director of customer lifestyle at Cathay Pacific Airways. So Paul, welcome back to Let’s Talk Loyalty.
Paul Smitton

00:02:05
Thank you, Paula. Great to be here.
Paula Thomas

00:02:07
It’s great to have you back Paul. It was December, 2020. I was looking back. So a lot has happened, I think in the 14 months since we spoke last.
Paul Smitton

00:02:18
Wow. That’s hard to believe it’s been that long and we’re still in this pandemic.
Paula Thomas

00:02:24
Definitely are. We definitely are. And I know things are very challenging for lots of different places and industry. So let’s certainly touch on how Cathay Pacific is doing right now. And we’ll before we do that, one thing that did change was my opening question. So instead of a statistic, tell me today, Paul, what is your favorite loyalty program?
Paul Smitton

00:02:46
Yeah, look, it’s great. Great question. I think the, and I gave it some good thought. I knew you were going to ask this question clearly, and I’ve been in loyalty for 25 years, so there’s been a lot of programs. I’ve had the pleasure of working directly in, but I’m going to pick one that I’ve had some experience with. And I just think it’s really interesting in terms of how they, how they’ve tackled it. And it’s Commonwealth bank in Australia. You might not know they’re the largest bank in that market and their loyalty program is multi-faceted, but I’m going to focus on the children’s activities that they do.
Paul Smitton

00:03:25
So you may not know that they have a program called Dollarmites and it’s essentially a savings account for little kids at primary school. When you come into a primary school, you get a Dollarmites account on it. They’ve even created some sort of teaching curriculum aspects to it, to help children understand the value of saving, get their first bank account. And so from literally, it’s the classic sort of cradle to grave, right? Customer life cycle marketing. What that does is clearly there’s no money really in it at all for them at that early stage.
Paul Smitton

00:04:08
But if you start banking, let’s say five years old and you, the biggest bank that does this in the country, you’re going to get 75% typically that’s kind of market share that I have of children’s banking. And then the key thing for this loyalty program is right at the point when you actually start to become economically interesting for the bank, which is usually, I don’t know, 16, 17, 18, those sort of years, when you’re either leaving school or going to university, you’ve got suddenly other costs. Like you might need a credit card, you might need a home loan. You might need a car loan money as a student mind for your studies.
Paul Smitton

00:04:51
There are all those things suddenly become important. As long as they do a really good job at recognizing those key moments, their market share can only go one way. It can only go backwards, right? But they’ve got to have great opportunity though because they’ve got that existing relationship to retain a strong market share. Now, I think that’s what makes that particular multi-program really quite incredible. And, and as a result, now they do have the other largest bank in Australia and they are that you have the biggest market share. I’m pretty confident that the Dolomites program is the sort of secret behind all of that. That’s been running for many, many decades now. So it’s just what I find really interesting thoughts, quite fascinating.
Paul Smitton

00:05:33
I did spend just over a year working in Commonwealth Bank. So I know from a, from a sort of inside the business a while ago, it’s, you know, it’s expensive costs, but the value in terms of market share is well worth it
Paula Thomas

00:05:51
For sure. My goodness. Well, I mean, parts of my very selfish agenda, of course, with asking this question is lining up, you know, potential guests for the future. So thank you for that, but no, to be serious about it, Paul, what I really like is a lot of integrity and patience, I think is what I’m hearing coming through. So I think in a world where, you know, shareholder returns very often drive decision-making and a lot of businesses, and to be able to justify a very expensive, as you said, program with such a long lead time. I mean, yes, if we say start saving as a, as a five-year-old and, and maybe become, I love your term economically interesting.
Paula Thomas

00:06:34
And 11 years later, I mean, that’s an extraordinary way of doing business. It’s amazing.
Paul Smitton

00:06:42
Yeah, absolutely. Absolutely. Well, I can certainly introduce you to someone if you would like me to at some point, please do
Paula Thomas

00:06:49
Great. I wasn’t expecting that. That’s an added bonus. Great. And also what’s amusingly poll is I think I’m entering the economically uninteresting phase of life because I just had a big birthday yesterday. So yeah, that’s going to be a fun to see how the marketing changes in terms of, you know, the various programs I engage with, but I digress. So listen, as we said, 14 months polls, since we spoke together the last time. And I suppose the first thing to acknowledge is you’ve already kind of mentioned is the pandemic and the impact on Cathay Pacific and Hong Kong, I suppose, still at this moment in time. So I might get you just to comment on that poll in terms of just to give listeners a sense, on how Cathay is managing, to continue to operate on dash walk volumes at the moment.
Paul Smitton

00:07:40
Yeah. Look, it’s been, I mean, challenging for the whole travel industry everywhere in the world, right? I don’t want to sort of make out that we’re, you know, any worse off than anyone else. I think the whole industry has been, been really challenged. I think for us, the biggest challenge is Hong Kong. It was a special administrative region. It’s not a country, it’s a special administrative region of China and it’s essentially a domestic environment and within the wider China market, but we don’t have access to that domestic market. We can fly into China and fly out of China, but we don’t have domestic operation within China.
Paul Smitton

00:08:24
So we don’t have, we don’t have a domestic market essentially. And with no domestic market to operate within our borders, we’ve had to rely on international travel through this period. And of course the Hong Kong government has, you know, operated some of the strictest quarantine measures in the world to try and contain the virus, you know, and I mean up until very recently, it’s been going very, very well. So we protected the Hong Kong public, but it has meant that from an airline perspective, our network is probably running around 2% of what it might normally do pre-pandemic.
Paul Smitton

00:09:07
So being really tough from a passenger perspective, we were lucky there’s some other, you know, silver linings. We also have a very significant cargo operation. Hong Kong is one of the world’s biggest cargo airports. And so Cathay cargo operating 7.7 fighters, flying PPE vaccines and other products that are made in China to the rest of the world, that businesses it’s gone very well. So there’s been some, some positives, the other side of it, the credit card business, the loyalty business, those, those businesses are still functioning as normal to a certain extent, although I’d be fibbing.
Paul Smitton

00:09:55
If I was to tell you that we haven’t been impacted because of
Paula Thomas

00:09:57
Course
Paul Smitton

00:09:58
A lot of credit card spend is linked to people saving up for flights. And if there’s no flights, there’s going to be an impact there as well. So yeah, so that, we’re all, all hoping that it’s going to end we’ll end. It’s just a matter of fan, you know, when, when that happens and then we’ll be ready to, to rebound
Paula Thomas

00:10:19
For sure. Yes. Yeah. And I know what you’ve been doing pole am has been obviously focusing on developing some extraordinary new concepts for Cathay. So definitely that’s the main reason for our, I suppose, conversation today, but just to give some numbers because I can see you guys did publish, you know, just an update on 2021. So, you know, it is always fascinating, as you said, just in terms of passenger numbers. And I am so passionate about the travel industry. So can’t wait for everything to get back to normal as much as everybody else. And so 717,000 passengers in 2021 versus 35 million, 2019. It’s quite incredible.
Paul Smitton

00:10:58
It’s, it’s a couple of numbers which don’t need further analysis. It’s pretty a pretty obvious what impact, but
Paula Thomas

00:11:06
Yeah, well, on a more positive note, then senior appointments were announced last summer and you have taken on a new role as the director of customer lifestyle. So tell us all about that. You were, I think the official title was CEO of Asia miles. That’s time we spoke. So tell us about this new focus, which you did hint us. I think by the way, when we spoke the last time, but tell us about the new focus on customer lifestyle.
Paul Smitton

00:11:34
Yeah, look it’s so middle is just say middle of last year. It was, it was announced. So I still hold the title of CEO Asia miles. So that’s a separate entity that we wholly own. And so I’m, I’m doing that role concurrently getting paid twice, of course, having two jobs, but yeah, so that, that extra pay, but the director lifestyle, what, what we’ve done essentially, we’ve, we’ve created four different revenue generating arms if you like. So we have Cathay customer travel group, which is Cathay Pacific, the airline.
Paul Smitton

00:12:16
And so we have someone in charge of that, that business may have Cathay cargo and someone in charge of that business. We also have a low cost carrier called Hong Kong express that we wholly own. And so there’s someone in charge of that group. And then lifestyle is the division that I’m in charge of. So there’s four main revenue generating units. And then in lifestyle, I’ve got Asia miles. So I have award currency also have other business lines like retail, where we, you know, things like duty free and e-commerce the Cathay holidays business. So I’m the chairman of the Cathay holidays business, which is our hotels and vacation packages and other associated products.
Paul Smitton

00:13:05
And then the most recent one within that group is what we called wellness. So today the sort of main profit lines, I also have some other functions as a, as a part of that lifestyle group, but it would have supporting the whole group. So there’s two functions, one called brand insights and marketing. Yeah. It’s pretty, self-explanatory, that’s providing brand market research and, and mock home support for the whole group. And sort of that is horizontal function supporting a little better calls and then digital experience. So everything from our website to apps online, check-in everything else. So the digital experience team providing that horizontal support for, for all the different verticals.
Paul Smitton

00:13:48
Yeah. So there’s kind of a P & L aspect around the lifestyle functions, but then also there’s some support functions of course, across the business. Yeah.
Paula Thomas

00:13:59
Yeah. And as I said, you did allude to it, Paul, when we spoke the last time and certainly there are, you know, at lots of different airlines, understandably are positioning themselves more broadly with this lifestyle and idea and intention. But I think what caught my intention on LinkedIn was your post about this wellness proposition. And again, last time you had articulated and it’s not surprising, I suppose, that there is so much interest in wellness and health, but I guess the solution you developed with something I’ve only seen in radically different industries, like health insurance, for example. So when you tell listeners exactly the new initiative that you launched, I think it was literally just in January a month ago, 2022 bowl, wasn’t it?
Paul Smitton

00:14:45
Yeah, that’s right. So, wow. You look at me and maybe just to just go tiny a tiny bit back just around lifestyle, just because you touched on that at the start of your question, and maybe it just warrants a little bit further explanation, which helps understand what we’re doing with wellness. And, and I think it’s interesting. So Cathay as a brand is very much, I know what we see as a lifestyle brand and that research with consumers is they, they say that too. They say this is a brand that I love, I engage with it’s a brand when I’m traveling to go on holiday. I, you know, I want to fly on because it’s going to be all part of that experience.
Paul Smitton

00:15:27
And so what we’ve done is we’ve essentially Cathay Pacific is the, the airline and that hasn’t changed. And what we’ve done in terms of the master brand, we’ve dropped the word Pacific, and we’ve created Cathay that by itself, as a monster resonant, that the thinking there is that that’s a premium travel lifestyle brand offering Cathay hotels, Cathay, retail, Cathay wellness. We have this ability to extend the reach of this master brand. And so that’s what we’re doing in terms of creating this, this wider engagement.
Paul Smitton

00:16:10
And that’s about being relevant and, and, and being more, essentially from a commercial perspective, getting more value out of the consumer dollars that people spend across these different things. So that, that was the sort of job we didn’t in the middle of last year. When we, when we launched the Cathay lifestyle brand and then wellness, essentially what we’ve done is we’ve said, look, where do we go next? So we’ve got a successful airline. We’ve got a really good credit credit card business without our Asia miles parents see what could we do next? And we looked at all the different sectors and we identified insurance as a sector, which had an opportunity for disruption.
Paul Smitton

00:16:57
And I think it’s no secret. If you look at most insurance companies around the world, it’s a kind of a grudge purchase. You, you know, you have to have it there for a rainy day and hope you never need it, but you, you buy the product because you feel you need it. And as a consequence, it’s relatively low engagement branding. Most insurance companies only gets one to two contacts a year with their customers. That’s usually around premiums and claim time. That’s typically when they have that engagement. So they’re not really positive engagements. It’s usually either a paying money for something that you, you sort of have as a grudge, or it’s a claim.
Paul Smitton

00:17:39
And hopefully that’s been a pleasant experience, right? But not always so wellness. We said, well, let’s, let’s try and disrupt that. We leverage the fact we’ve got this engaging brand. People want to collect miles for holidays, or, you know, there’s wonderful things. Maybe we can disrupt that sector, but then we also looked at how everyone else does it. And one of the big things we noticed was that all the, the wellness tracking where you get some value for healthy behaviors, typically a behind the paywall. So you’ve got to buy the insurance product and then you get, get these loyalty benefits for your, for your heading your wellness goals.
Paul Smitton

00:18:22
So we decided to pull out in front of the paywall, if you are in Hong Kong and you get for the Cathay lifestyle app, and you activate your wellness journey, which involves just giving, ask some permissions for data sharing. So you can connect apple health, Garmin, Fitbit, Strava, always different fitness tracking devices. That data then can come into the Cathay lifestyle app. We’ll give you miles if you hit your goals. So we got some simple ones which are, you know, you’re getting your, the steps for the day, drinking water, doing some yoga, eating fruit and vegetables.
Paul Smitton

00:19:11
And so that if you do those different activities, you’ll earn Asia Miles every single day, for those healthy activities. And so that’s free. There’s no strings attached. It’s completely all about altering the lives of consumers in Hong Kong, right? Making it a positive intervention. And we all, we all know that, you know, having, having preventative care is much better than hospital care, keeping, keeping healthy, you got to live a longer life and have a, quite a, quite a fulfillment.
Paul Smitton

00:19:53
So that that’s sort of the thinking. And then, and then of course we need to monetize it somehow. Not what is your business model? So the business model is simple, right? So we, we, we, we give the free miles for that healthy, those healthy behaviors. And hopefully it genuinely leads to good outcomes. We really achieve that, but you’ll learn more miles if you then buy a health insurance or critical illness policy, right. We’ve, we’ve partnered with the American and share a Cigna. And so essentially what we’ve we’ve got is where a, an insurance agent, we have a case for prices to be able to get qualified as a insurance agent for, for medical insurance.
Paul Smitton

00:20:45
And then the deal we have is like any other insurance agent, you get a commission for selling a product, and then you get a, get a commission for the ongoing trial associated with annual annual premiums. And then, and so we then putting, you know, a big chunk of that revenue that we get back into miles as well. So there’s an extra miles on top when you buy those products. So, so yeah, so it’s an interesting, interesting way of looking at it, the cool thing as well, we also decided, well, how do we, how do we do this? How do we do it ourselves? We looked at, you know, building this capability to connect with the different health apps quickly realized that that was a very specialist area.
Paul Smitton

00:21:33
And we went and went and found a company in Canada called sprouts at work. They’ve got this couple of things. One, they’ve got an app that already has all the API integrations with, with Garmin, Fitbit, apple health, et cetera. So we didn’t have to do that integration piece. And as those API APIs change sprout will make sure that they’re current. And so that they’re helping us to ingest that data. The other thing that sprouts have done is they’ve got a, a product called Viva Metrica. And so Viva Metrica is a, a tool that gives you a health score.
Paul Smitton

00:22:18
So w when you look at all that data, yeah. So Paula Thomas, you’ve done your 10,000 steps. You’ve eaten your fruit and veg. You’ve done all these good things. Your data will turn into a health score, maybe about a, see your health score in the, in the app as well, just as a way of getting a good sense of how, how you’re tracking. And then obviously we suggest, you know, of course, corrections, et cetera, to help you do a better job of being healthier lungs show. You’re already very healthy, but
Paula Thomas

00:22:51
I do my best full. Yes. Yeah. So, I mean, the, the easy part to understand on the technical side, just to pick up on the wonderful solution, you found always a relief, I think, to find that kind of experts technology. So that’s, that’s wonderful to hear. And, you know, I think we’re all familiar with all of those trackers in terms of, as you said, steps and all of those other behaviors, which are, you know, very evident and trackable and measurable the eating behavior is that self declared, I presume is the person entering, you know, the, you know, what they admission the piece of chocolates and telling the app about that, or, or is it based on shopping for, for groceries or how does that piece work poll I’m intrigued.
Paul Smitton

00:23:41
Yeah. So some of the data is based on actual tracking app and other data is self-declared. So if you’re, so we’re not, we don’t have, it’s not, it’s no big brother. We’re not going around, you know, with cameras, looking at what you’re eating or anything like that. So there’s, there’s a bit of, bit of self-declared information. So if you want, you’ve eaten your fruit in bed, she’d drink water. Yeah. You have to go and do that. I think it’s interesting over time, obviously you would need basket data from a, from a supermarket brand for that. Yes. And I’m aware of some brands in the world that are using that data, for sure.
Paul Smitton

00:24:21
So I think if we had access to it, that would be interesting. I know, I think it’s Tesco, Lotus in Thailand have partnered with Prudential and that market. I was reading about that recently and how that they’re actually using, you know, eating fruit and vegetable, are you buying chocolate crisps, you know, all the things you shouldn’t be doing and leveraging that data. So it’s interesting where it’s going. I think it’s interesting though. I also worry a little bit about big data too, in this space, because I think there’s a responsibility to provide a service to society. And what you don’t want to have is a, an, an underclass of uninsured, right?
Paul Smitton

00:25:04
Because if you become a bad risk through all that data, there was a potential for the premiums to go sky high or fleet or fee, just not to be able to afford or not being able to buy B, be excluded from insurance. And I think that’s a, that’s a change and that’s the responsibility that businesses have to make sure they don’t allow that to happen. Totally. You don’t want to be, you know, an episode of black mirror, right. That’s always the thing you think about when you do these things is how do you make sure that you’re you’re responsible approach? So that’s, that’s something that been very, very core to our thinking and in partnership with Cigna, as well as of course, we really want to make sure when we’re taking our societal big picture view with this as well, and hopefully it’s a, win-win win, win for the customer, win for us and a win for their insurance partner too, if we get it right.
Paula Thomas

00:26:03
Yup. Yup. And Europe, sooty rice. So certainly I know vitality in South Africa, which we’ve talked about on this show before has a paid version of what you’re doing for free in terms of, again, you know, tracking and measuring, I suppose, education and incentivizing, you know, healthy behaviors in health insurance. And they definitely do have a supermarket partner because I’ve seen that as a benefit. And so, yeah, definitely. It’s, it’s a very interesting model. And just to your points there, clearly, I don’t know that the Hong Kong market very well, but certainly in Ireland, my understanding certainly when I bought health insurance was you couldn’t actually dis discount or disincentivize or make a suppose.
Paula Thomas

00:26:49
And the person’s literally situation in life. You couldn’t penalize them price wise. There was a quite a controversial piece of legislation brought in where everyone had to be treated equally. So it may be that globally, there may be governments kind of stepping in to, to monitor that. So, but in the meantime, super interesting to see that you already have that kind of mindset to make sure that you’re protecting people, you know, when they do go to get their health insurance.
Paul Smitton

00:27:16
Yeah, absolutely. I think that’s true. I remember the human rights act in Europe, you know, there was going back 10, 15 years, I think now that there was a car insurance, you know, that sort of stereotypical young male driver, you know, is a terrible risk because they are going to drive faster and more recklessly is that against their human right. To penalize them with a higher premium versus know sensible female driver. Right. And that was that sort of classic sort of stereotype, which isn’t always true, but it’s that actually, it actually is.
Paul Smitton

00:27:59
As a result, you, you, you know, do you do you up the premiums for those people? And I know there was, I can’t remember the details, but I remember that being something that was challenged against the sort of basic human rights of other people. So yeah. There’s things like that you have to be aware of in Australia, they have what’s called community risk writing. So, so it means you, again, you can’t charge a higher premium for, for, for different people with underlying issues. And so, and, and what that does do from a business perspective, it actually incentivizes companies to target consumers who are younger and fitter.
Paul Smitton

00:28:48
They gonna stick around for a long time and be healthy and have the say, preventative care, not hospital care. So you’ll, you’ll, you won’t see insurance companies with pictures of, you know, people with underlying health issues. And they’re not going to target those people because you’re going to have a very unprofitable book. Yeah. So I guess it’s one of those interesting.
Paula Thomas

00:29:13
No, I love the positioning pole and, and actually even to go back a bit to, to what you explained about, you know, Cathay being now the brand, and I remember seeing some beautiful marketing about the expansion of the brand proposition, but I hadn’t actually noticed what you said the most obvious thing about, you know, removing the word Pacific. And actually, I think it’s a, quite a genius move because, you know, if you want to connect with people particularly global, which by definition an airline wants to do, then I think the simpler the better, and again, the Pacific is something that to me is, you know, a huge ocean very far away.
Paula Thomas

00:29:53
So, so Cathay in its essence has all of that kind of brand love that I associate with travel. And as you said, premium travel. So I would be fascinated over time actually. And I don’t know how long it will take for this to come through, but you know, when Cigna starts to look as, you know, people who come through your wellness proposition and how they convert and how do they behave versus their traditional non-Catholic or non-Asian MAs members and, you know, and how, how they become and behave over their life. I think that’s going to be a fascinating thing and a huge opportunity for them.
Paul Smitton

00:30:28
Yeah, look, it, it will be. And I think for us, we it’s, it’s all about customer lifecycle marketing, right? At the end of the day, loyalty programs are about how do you get people as early as possible and keep them for as long as possible and get them to spend more money in different ways over that journey. Right. It’s, it’s, it’s cool. That’s, that’s what we’re doing, right. As long as you’re marketers and so cross sell up, sell always things. And so, you know, that’s really what this is all about. So how do we have more, more ways to engage? And I think, you know, if they’re buying a, a travel insurance product after they bought a flight, you know, th th they may be now think about us as someone that, okay, I trust this brand from, with my insurance needs now.
Paul Smitton

00:31:22
So I might buy a wellness product as well. And if I’m collecting miles from different sources, that’s kind of a bit of a glue as well, because obviously if you’re building a balance in multiple ways, you’re going to get to give a, a bit quicker. And then I’ve, I’ve a time, you know, you start to become a little less price sensitive and a little bit more committed to the brand, right? That’s, that’s what this is. This is about. And obviously during the travel downturn, it’s not a bad thing to have and other products as well. Yeah. That, wasn’t the, the thinking behind, we actually were already kind of on this of this path, like, like most projects, these things take some time to, to build the business case and find the partners and build and launch.
Paul Smitton

00:32:12
And so we were already on the journey before the pandemic started.
Paula Thomas

00:32:16
Yeah.
Paul Smitton

00:32:16
Yeah. So it was something that we saw as an opportunity before. And, but when, when the pandemics over, I think it’s, it’s going to be another core part of what we do. So I think we’ve, we’ve been really busy actually, during the pandemic, we’ve been focusing so on the underlying product, how do we make sure that when, when the recovery comes, people go, wow, you knew busy while we were away. Look at what you’ve done. There’s a bit of that. That’s going on as well, trying to figure out how to simplify the business, create wider engagement.
Paul Smitton

00:32:56
You would have also seen as a part of the announcement regarding the Cathay master brand is that we’ve, we’ve also told people that we’re merging our loyalty programs, right? So Asia miles and Paula club coming together to, so we’re now gonna have a, a single program. Wow. And so that’s, that’s another big change too, right? So we’re going to have, rather than Asia miles as your mileage, and in Bern and Marco polo club, as your recognition program for, for lounge access, there’ll be a single program anchored around Cathay.
Paula Thomas

00:33:38
So that’s amazing. And Marco Pola was going to ask you about that because that was a paid subscription program, whole wasn’t it?
Paul Smitton

00:33:46
Well, you had a one-off joining fee. So there was a joining free to come into that, which yes. And that will, that will go away. Essentially. We want to try and simplify because if you look at what modern retail brands in particular do, they don’t create too many bets about you. You want to make it as simple as possible. So at the moment, we had a joining fee, as you pointed out for the recognition program, and we also had a separate program for, and then for miles, it created a lot of confusion for customers. So bringing the two together, a single program, and we’ve also massively shortened the enrollment process as well, so that you can get up and running really quickly.
Paul Smitton

00:34:36
And you can add in your status from, from your very first flight. Whereas before, if you hadn’t joined Marco polo club, you wouldn’t get any status you had to have to pay to get started. So by bringing the two together, it’s going to simplify what we do tremendously. So that’s, that’s quite exciting. So that’ll, that’ll be all coming to market in the middle of the year. We’ve made the announcement that it’s changing, but we’ll be bringing that together in the middle of the year. So again, some positive changes that we’ve been busy on while the pandemic’s been running.
Paula Thomas

00:35:15
Yes, absolutely. I’ll definitely be watching that, of course, very closely. And just a small one. Well, two small things I loved because obviously when I’m preparing for these interviews, I’m in, you know, ultra investigative mode and it’s always really wonderful to kind of see the detail behind what comes through and that’s that Marco polo one absolutely is one of those. And the other thing I noticed is Paul, and it was actually just on your LinkedIn page. So again, back to the airline and the airline brand, but just within the wonderful description, of course, you know, such an aspirational brand, but the call to action was on WhatsApp.
Paula Thomas

00:35:54
And I think that’s extraordinarily innovative. And I think we might have briefly touched on this when we met before, but I’m super passionate about, you know, connecting with people where they already are, because actually what I don’t really want is a lot more apps on my phone. So some of them will justify us and I’ve no doubt if I was in Hong Kong, I would have the Cathay app for sure, but not, I don’t want one for every different, you know, retailer for example, that I engage with. So was that something you were part of, or if you have any insight on that part of the decision?
Paul Smitton

00:36:28
Yeah. So yeah, very much part of that thinking and, and, you know, staring that new initiative. And so what we’ve essentially done and we’ve we to exactly your point, right? Let’s, let’s be where customers want to be. Let’s not create friction, just make it as easy for people to interact and essentially what we’ve done. So what’s, what’s that sits in the middle of our, our customer engagement strategy when, when we have customers wanting to contact us. But at the first instance, we have a, a chat bot. Okay. So we have this product called Vierra. And so when you interact down different digital channels, we’ve got a, you know, an artificial intelligence chat bot, and that’s just helping customers if they are doing a pretty simple query and they just want to try and find the information on the sidewalk, what’s your rules around baggage when I fly to a destination or how do I, how do I, how do I apply for a credit card?
Paul Smitton

00:37:32
You know, it was sort of types of questions that might come up. And some people like that it’s pretty popular. And artificial intelligence is pretty smart underneath it. So it can quickly get you to where you want to be. Those simple queries. Often you go from a simple query, to something a bit more complex, of course. And then, so we have, you know, live chat as well. So, so that’s a way of interacting directly with our agents through the website. But then to your points before you might well want to indirect through the channels that you like to interact with that’s when that WhatsApp is very useful. So we have a specific WhatsApp account, add that to your context, obviously an indirect that way too.
Paul Smitton

00:38:20
So that’s really, really helpful. We also, you know, this social servicing as well. So when people interact through social channels and then of course often there is a need for an agent, right? And that, that can be a physical phone call too. So, and the idea there is to make sure that it’s as smooth as possible so that when, when you’ve finished interacting with a digital channel, the transition to someone human is, is going to be as frictionless as possible and try and protect the agents to deal with the harder things, right? Yeah. Not, not simple stuff that can just be solved very pretty easily digitally.
Paul Smitton

00:39:03
That’s the thinking behind our sort of global content strategy. And it’s, it’s now rolled out everywhere in all our, all our markets and, you know, being, being really, really well received actually. So I’ve had a lot of good, good feedback.
Paula Thomas

00:39:20
Sure. And it will only get better. I think, as well as artificial intelligence does improve, I haven’t met Vera. So I don’t know how she compares to Eva who I’ve talked to here in Dubai, but yeah, there’s plenty of them. Tell me, is Vera able to check, for example, my Asia miles balance at this stage, it’s not technically possible.
Paul Smitton

00:39:42
Yeah. All those sorts of things are possible. So you can log on and have a crack if you can take it.
Paula Thomas

00:39:49
I will, I will definitely. Okay. So that’s a good challenge. And the other one, actually, I just wanted to pick up on which again, I just like as a, I suppose, as a solution and in the master cards I sold that you have, and I think it’s a, it’s a fairly new proposition, but because again, I’m a huge fan of an off-hand call first and foremost, and your beautiful hotel there, the peninsula. And I saw a gorgeous proposition, which is obviously purely experiential about signing up for the MasterCards and, and getting afternoon tea at the peninsula hotel. I thought that was gorgeous.
Paul Smitton

00:40:24
Yeah. Yeah, absolutely. So as you rightly point out potential as a pretty iconic hotel in Hong Kong, over in Cal lane and their high tea is probably just about as famous as the hotel itself. And so, you know, it’s a, it’s definitely a tourist must do is high tea at the peninsula. And, you know, during the pandemic, obviously without the tourists, but there’s a lot of Hong Kong people looking for fun things to do. And yeah, that’s been a, been a really popular thing. So yeah. So that’s, it’s just a spine up incentive.
Paul Smitton

00:41:06
If you take the Cathay standard charted MasterCard as a new customer, you can get, get that high tea as a part of a signup bonus, but it’s, it’s been really well received actually. And we’ve done a few others. We did something recently with the SWI hotel, caught up a house, which is another super hotel in Hong Kong. It, there was really successful. So we’d been doing some things like that, just I guess, trying to engage with our domestic audience a bit more through the pandemic. Yeah.
Paula Thomas

00:41:42
Yeah. Wonderful. So I guess I didn’t have any other questions FIA now, Paul and love to know if there is anything. I mean, obviously, you’ve mentioned a huge amount in terms of already the Marco polo changes this summer, any other innovations that, you know, you can even give us any hints on or, and future things we can look forward to.
Paul Smitton

00:42:04
Yeah. Look, I think there’s, there’s lots of stuff. We, at the start of the call, we talked about the Commonwealth Bank and the children’s program for me, I’m thinking about that. Going back to that customer life cycle marketing, how do I, how do I make sure I’m relevant at all different stages? And one of the interesting areas is as I think what I, what I call emerging high net worth and emerging high net worth, it’s really people who are at university now. And they’re probably not economically interesting go back to that comment from before, but again, to become economically interesting in the future and that will, they’ll become fliers and they’ll become spenders.
Paul Smitton

00:42:48
How do we engage a bit say that in that, that end, but also the other thing is the other end of the spectrum. And you mentioned your birthday before now, I’m not calling you a senior because I wouldn’t do it. But did you know that one in five Asians owns a VR headset, digital seniors, VR headset. So this incredible stat, I just read it recently and it just blew my mind genuine senior we’re talking about.
Paula Thomas

00:43:23
And yeah,
Paul Smitton

00:43:23
Exactly. And so this, this segment is still, you know, the baby boomers have so much money, so much wealth that’s been well-documented, but I think brands need to think about how do they keep engaging with that group because in the past, as soon as you stop working, you know, things like credit cards become hard, but actually this, this segment of consumers is still a massively important economic powerhouse. So yeah, for me, it’s about, you know, both ends of the spectrum. How do I engage with those digital seniors, but also how do I engage with the emerging high net worth?
Paul Smitton

00:44:06
So that’s, that’s the kind of stuff that I’m, I’m thinking about at the moment. How do we, how do we keep being relevant to those different groups?
Paula Thomas

00:44:13
Wow. Well, I’m going to put a note in the diary pole to make sure we check in again and another 12 to 14 months because of a B like we were going to have a whole other new, wonderful conversation. So listen, that’s all the questions from my side. Is there anything else you wanted to mention Paul, before
Paul Smitton

00:44:30
We wrap up now, look, that’s been great, Paula, so great. Great to see you and chat to you again and yeah, well done with the podcast. Love listening to it.
Paula Thomas

00:44:38
Wonderful. Well, listen, thank you so much. It’s always a pleasure. So Paul Smith director of customer lifestyle at Cathay Pacific Airways. Thank you so much from Let’s Talk Loyalty. This show is sponsored by the Wise Marketer, the world’s most popular source of loyalty marketing use insights and research. The Wwise Marketer also offers loyalty marketing training through its Loyalty Academy, which has already certified over 245 executives in 27 countries as certified loyalty marketing professionals. For more information, check out thewisemarketer.com and loyaltyacademy.org.
Paula Thomas

00:45:23
Thank you so much for listening to this episode of Let’s Talk Loyalty. If you’d like us to send you the latest shows each week, simply sign up for the Let’s Talk Loyalty newsletter on Let’s Talk Loyalty.com. We’ll send our best episodes straight to your inbox. And don’t forget that you can follow Let’s Talk Loyalty on any of your favorite podcast platforms. And of course, we’d love for you to share your feedback and reviews.
Paula Thomas

00:46:03
Thanks again for supporting the show.