This episode is also available in video format on www.Loyalty.TV as well as in audio format.
Vietnam Airlines is part of the SkyTeam Alliance and our guest today is Thi Thu Hien Tran, Deputy Director of Lotusmiles, based in Hanoi in Vietnam.
Hien shares the journey for Lotusmiles from its original launch in 1999 through to today and their latest achievements in loyalty.
Paula: 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.
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Hello and welcome to Let’s Talk Loyalty and Loyalty TV. And today we’re back in Asia, in Vietnam to learn all about Lotusmiles, the loyalty program for Vietnam Airlines. Vietnam Airlines is part of the SkyTeam Alliance, and our guest today is Thi Thu Hien Tran, Deputy Director of Lotusmiles based in Hanoi in Vietnam. Hien shares the journey from Lotusmiles from its original launch in 2010 through to today, and all of their latest achievements in loyalty. I hope you enjoy our conversation.
So, Hien, welcome to Let’s Talk Loyalty and Loyalty TV.
Thi Thu Hien Tran: Thank you. Nice to meet you, Paula.
Paula: Great. Great. Yes, I feel it’s long overdue, Hien, that we we didn’t get to meet each other, unfortunately, at the event we both attended earlier in the year in Krakow and Poland, but we’ve managed to connect now over the virtual miles and here to talk about your incredible loyalty program and a little insight in terms of what’s happening in the Vietnam market. It’s one I know very little about. So thank you for being with us today.
As you know Hien, we always do start this show with the same question, which is really nice and familiar for our audience. So before we talk about Lotusmiles, if you don’t think about that program and think about something, maybe as a loyalty professional or just as a consumer, what would you say is your favorite loyalty program?
Thi Thu Hien Tran: Yeah, the, my favorite loyalty program that I use every week is actually the BRG loyalty program week at my you know, in my neighborhood. I do grocery shopping every week. So, yeah. So it’s become very familiar with me.
Paula: Okay. So you’re using it weekend and week out and you’re loyal to the one place? Yeah.
Thi Thu Hien Tran: Yes.
Paula: Okay. And what is their structure of their program Hien and why do you like it?
Thi Thu Hien Tran: They make it very simple, you know? I, when we spend over there, then they, we earn some points and from the next time we shop there, there will be some cashback. So, very simple program, but I think it also work.
Paula: Of course. Of course.
Thi Thu Hien Tran: Yes. Yeah.
Paula: Well, I think that already is a lesson Hien. I’m definitely a fan of simplicity.
Thi Thu Hien Tran: Yes.
Paula: I feel like loyalty professionals, we can over complicate our propositions. But some of the members actually understand. So I like that focus and hopefully it’s something that is being taken through in terms of Lotusmiles as well so. So that’s wonderful. And I have to confess, I know very little about Vietnam.
So let’s get started with you, Hien, in terms of your own career. How did you get to this wonderful role with Lotusmiles? Tell us your background.
Thi Thu Hien Tran: My journey with Vietnam Airlines started very I think, coincidentally. So after I graduated from the University of Vietnam Airlines, they have recruitment. And then I attended the competition and I got into the, into Vietnam Airlines. And at that time, we didn’t, I didn’t expect that because, you know, normally we think that to be able to work in Vietnam Airlines is something very difficult to achieve. Right.
But, and yeah, and I started my journey with Vietnam Airlines as an interline manager and sales manager. So I work a lot in, I work with about 75 airlines in the world. So we negotiate all the interline agreement. And, yeah. And then sale manager for North America and Europe. So I’m very familiar with those part of the world, the market.
And after that I found that okay, I see that Lotusmiles, the frequent flyer program, our previous generation of leaders, they started it in 1999. So by the time, by 2010 the program already achieved some milestone, but still not commercialized yet. So I think the top management, they want to commercialize the program and then with the background in sales, they want to send me there to, to do the job to, to make it become a revenue center.
Paula: Okay, interesting.
Thi Thu Hien Tran: So, yeah, so I joined and also at that time, I think it’s a good time to, to have to add another expertise into my my, my experience.
Thi Thu Hien Tran: As a data driven marketing is something I want to learn. And yeah.
Paula: Okay, so that was a long time ago. I don’t want to age you, but I think on your LinkedIn we can see 23 years already since that wonderful opportunity directly out of university joining what I believe is still a state owned airline. Is that fair to say?
Thi Thu Hien Tran: Yes, we are 86 percent owned by the government now.
Paula: Interesting. Okay.
Thi Thu Hien Tran: Yes.
Paula: Not surprising when the frequent flyer program, which of course was a much more popular term back then than perhaps it is now. So I can understand perhaps it mightn’t have been very commercial when it started. I think you shared that the numbers were quite low in terms of the membership. So we’ll certainly go through the whole journey of Lotusmiles, absolutely.
But even before we get into that, Hien, because Vietnam is a country that I know so little about, I just checked on Wikipedia for one piece of information. And I learned that actually it’s the 15th most populous country on the planet with 100 million people. So actually it’s a huge country. Tell us about loyalty a little bit more generally. Is this, would you say a mature market? Are there lots of programs? You mentioned your favorite grocery program, of course, in terms of cashback, which is very basic. And I see that in a lot of markets, but are there other programs in Vietnam that we should be aware of?
Thi Thu Hien Tran: Yeah. Back in 2010, not so many. We are one of the few loyalty program but now, you know, you can see that we have 100 million, the population of 100 million people. Right. And the urban population here is about 30%. So about 30, 30 million people living in different big city. So those are the one that using different loyalty program. And the good thing is now, you know, within our ecosystem all the partners, you know, most of the major company, they have their own loyalty program. So it’s very, yeah it’s, I’m so happy to see that kind of emerging loyalty program in Vietnam. It’s become very popular now.
Paula: Okay, so all sectors like retail, telecommunications, grocery, obviously airlines and hotels, you would say that like most markets it’s quite quite well established, yeah?
Thi Thu Hien Tran: Yes.
Paula: Okay, super. So take us back to 2010, Hien, when you started, as you said, as the person responsible for commercializing the loyalty program, taking it beyond purely frequent flyer for, I guess, people who were doing exactly that, flying frequently. So back in 2010, what was the membership like? What was the brand like? And take us on the journey of how you’ve developed the program in the last 13 years.
Thi Thu Hien Tran: Yes. So back in 2010, the program only have 170,000 members and over the years until now, we already achieved this August, we achieved 5 million.
Paula: Oh, congratulations!
Thi Thu Hien Tran: Yeah, we just celebrated 5 million members this year.
Paula: That’s great.
Thi Thu Hien Tran: And yes. And you know, it’s a big milestone over there. In 2010, people tend to think Vietnam Airlines loyalty program is just for the very VIP people. Frequent, very frequent travelers, right? And at that time, already some of my colleagues already go out, went out to the world and learn about retailing on airline loyalty program already. And we bought back to the program, but the limitation is you know, there’s still some limitation on the revenue side. So the process of the journey of moving from, revenue center to, to from a cost center to revenue center is a long way.
Paula: Of course.
Thi Thu Hien Tran: And the first few years there, I need to you know, we went out to learn from different airlines, like, all my gift transfer of product. So we set up those kind of product so that, you know, members can be able to buy the miles, if they want in the past, if they want to, yeah, they are lack of a few miles, so they need to, they don’t know where to apply. And sometime we have to approve a lot of those. And that added to the revenue. Now it’s account for about for that by transfer it’s account for. Sometimes it can be a cow for one fourth of the total revenue for us.
Paula: A quarter, yeah?
Thi Thu Hien Tran: Yes, a quarter.
Paula: And are you, just to make sure I understand correctly Hien, is that for people who are literally buying miles for themselves and for gifting? Is that what you said?
Thi Thu Hien Tran: Yes. Yes.
Paula: Okay. Fascinating.
Thi Thu Hien Tran: Yeah. Yeah. In Vietnam. Yeah. It’s you know, the platinum card or the gold card is really is a favorite favorite gift that people want to give to each other.
Paula: Oh, so they can buy a gold card. Can they?
Thi Thu Hien Tran: Yes. Yeah. Yeah.
Paula: I like that. I did not know that. So it’s Lotusmiles for traveling or grading, of course, they can actually buy status from you.
Thi Thu Hien Tran: Yes.
Paula: Wow. Okay. And I would love to get a sense of the pricing and you’re probably going to quote me in Vietnamese currency, which we’re going to have to do a translation on, or maybe, you know, it’s in US dollar equivalent. So forgive me. I don’t. What would it cost if I wanted to buy a gift card, pardon me, a gold card for my family, my husband, something like that? What do you charge for that?
Thi Thu Hien Tran: A gold card can would cost you 3000 USD.
Paula: 3000 USD? Wow.
Thi Thu Hien Tran: Yeah. For one year, one year membership and the platinum the highest one is 5,000.
Paula: My goodness. I like that idea. Yeah. I think we’ve seen in some markets, perhaps that status is becoming too easily accessible. But what I’m hearing is in a country like Vietnam with such a huge population and a relatively small, I think loyalty program compared to the opportunity size. Then obviously that’s a big opportunity. Big idea. So that’s super exciting.
Thi Thu Hien Tran: Yeah. And this year, the team on that product, this year, the team do it more personalized, right? So they will look at the record, the customer record and okay. If you like, we take about 50 fly for us to for the frequent travelers to become our platinum. So they look at the data. If you reach like, 40, 45, so we offer a kind of promotional rate over there for them to buy. So, you know, that we receive a lot of yeah, the customer inquiry, inquiry on that product a lot and they buy a lot. So like a luxury good in Vietnam.
Paula: It is a luxury good. I love that. And I’m guessing a lot of our audience, if they haven’t thought about it before, because I can assure you, I’ve never thought about it before, but because it’s a one year piece. And of course, you have a clear understanding of when the market might become saturated, but in the meantime, it sounds like a very good way to as you said, gift people, enjoy a luxury experience. Give them a taste of what it’s like to be a premium member of a program like Lotusmiles. So, so that’s wonderful. Yeah.
Thi Thu Hien Tran: The thing is, you know, we see that other airlines when I started the BGT product in 2012 we look at other airlines, they are doing, they sell segment, right.
Thi Thu Hien Tran: Segment or 1000 miles, but then I say that, okay, we just sit down and think if we sell one segment, like single segment or a hundred thousand miles, why don’t we sell the whole thing?
Paula: Yeah. Makes sense. And I liked your approach, actually, that you told us Hein, when you did decide that there was a much bigger opportunity for the program, you really took a lot of time to go and travel around the world. I know you went to the US, you went to so many different markets, you sat with the loyalty managers. I know you asked them about their platform and technology. So talk us through that process, because I feel like you did a very good job on the research.
Thi Thu Hien Tran: Yeah. So, what I have been doing in my career the last 23 years is to learn from the best practice. So, yeah, so when in 2010 is also we Vietnam Airlines also joined SkyTeam. So it’s a really good experience for us to have all the partners within SkyTeam where they support us a lot, like I’ve been traveled to, to learn from, you know, Korean Air, from Delta. Delta you know, help us a lot. And they have arranged time to train us on, you know, different module.
I have to learn very basic from how to develop partnership, the strategy on partnership, the strategy on a non-air, on air partnership uh, IT, fraud prevention. All of those. We have to come and then they organize a whole day. I still remember the whole day at, in Atlanta on, uh, headquarters and they bring different people to coach us, to show us what, yeah. And yeah, organize things.
Paula: Amazing. Fantastic.
Thi Thu Hien Tran: Yeah. So, then I also went to learn not only from the advanced program, but also from the rowing program like Air Mexico also within Sky Team. So we also had to travel to Air Mexico to learn from them.
Thi Thu Hien Tran: And you know, the best, you know, the people, right of loyalty program is Air Canada Aeroplan. I also went up to there, to, we formed one, two people. Some, a few other colleague went out with me and we went to Aeroplan to learn from them.
Paula: Okay. So what I’m hearing from you is that the Alliance has, of course, incredible benefits for members in terms of global positioning and all of the benefits of being part of a beautiful Alliance. But on the external side as well, you had instant access to people who were, as you said, either more experienced or perhaps also emerging. So you can take those learnings and fast track how best to build Lotusmiles. Yeah.
Thi Thu Hien Tran: Yes. And so we had to learn from different, different programs, not only, yeah.
Paula: Lovely that they were so generous with you, huh?
Thi Thu Hien Tran: Yeah. Sometimes, you know I can write a book about that, right? Sometimes they don’t want to meet. We ask them for meeting and training, and then they don’t want to do that. And I try to, you know, pursue it. And sometimes I have to write a very heartful letter myself. So that they can organize. They, I think the, and after, maybe for some partners like Delta or Korean. Korean, it’s take me one year to persuade them to, to train us.
Paula: Oh my goodness. Okay.
Thi Thu Hien Tran: So we’re small. Yeah.
Paula: I love that. I love that. And tell us about the brand change as well Hien. And I know one of the pieces of learning, I guess, when you joined the program was that the brand didn’t feel accessible or appropriate for the scale that you wanted in terms of growing this program. So I think the previous brand was Golden Lotus. Was that correct? So tell us your decision to rebrand it.
Thi Thu Hien Tran: Yeah. So the first you know, the story our previous generated leaders, they are also very talented. They see that you know, other airlines, they have loyalty programs. So we also should have some one. So they make it because we are very lotus related, right? So they put a Golden Lotus.
And over the year of Golden Lotus become too privileged, right? It’s other people, they only think that you know, the main, the majority of the population, they think that it’s only for the VIP, as I said. So it’s become not very friendly with, when we want to go into more popular in the market, right? When we go into the more retailing. Yeah.
So, in 2015, we have Vietnam Airlines has the good thing is in 2015, Vietnam Airlines has a major brand identity change. We have some change into the, in the logo of Vietnam Airlines. And also it is we took that chance to propose that we also changed the Golden Lotus program.
You know, the first thing is when we learn, we study about branding, right Golden Lotus program. So it’s a very long name. It’s not easy to mention, right? And we have to make it shorter and then we have to make it more friendly and more lively, more easy to access accessible to more people.
Thi Thu Hien Tran: So, yeah, so that’s, that is the requirement that we ask the, that we put into the consult, to put the consultant. He came from Japan, right? And then he proposed different option and one of the option is a Lotusmile. And then, my, and lotus my, and smile, right? So there’s a play with what’s here.
Paula: Very nice.
Thi Thu Hien Tran: Miles and Lotusmile.
Paula: Miles and smiles. Huh?
Thi Thu Hien Tran: Yeah. So, but, at the same time this is a shorter, easy to, to pronounce, but also at the same time, it’s very challenging for us. And because, you know, when you put smile over there, that means, you know, everywhere you go, if you are representing the Lotusmiles program, you have to smile, right? You cannot keep the serious face.
Paula: Okay. So the brand, I’m hearing it’s all about being friendly, accessible fun. Is it fair to say in terms of the intention of the, that rebrand to make it more available and simple?
Thi Thu Hien Tran: Yeah. Yeah.
Paula: Super. Okay. So you rebranded then, as you said, 2015 and then I know.
Thi Thu Hien Tran: Yeah, 2015.
Paula: And 2016 then was a much bigger year again. Tell us about the commercial decision to make changes in 2016.
Thi Thu Hien Tran: 2016 is we reached one million members. And you know, the thing is, in 2016 we successfully you know, separate Lotusmiles as a division in a sale marketing department, become a independent unit in Vietnam Airlines. So this, that is a big organizational change within Vietnam Airlines. Yes. And I was taking part in, in that process of putting up a project on that and that one may be one of the longest you know, the biggest project that we came up with more than 100 pages.
Paula: Okay. Oh my God. Wow. Yeah.
Thi Thu Hien Tran: Yeah to reorganize you know, to separate Lotusmile from sale and marketing to make it an independent unit.
Thi Thu Hien Tran: And we, yeah. And then that is a really big project and we have a big team working with us. And we did extensive reading and citing different document, but you know, the amazing thing is we only finished, we finished that within only four months.
Paula: Okay. Super. Yeah. Once you made the decision, it was easy to implement. And that’s quite a long time ago now. So I guess we’re coming to the end of 2023. So coming up on eight years as a separate business unit, I know you’ve got your own P&L. Would you say that it’s still the right structure? Are you comfortable that Lotusmiles belongs as an independent business unit you know, operating, I suppose, quite separate to the airline. Is that something that you still feel is the right structure for you?
Thi Thu Hien Tran: Yeah, we actually that is a direction that other allies was going, right, had been going and we just learned from them. But we also earlier this year, we also look at, look back, reflect back to see whether that is a right direction or not. But when we look at the, you know, the numbers of members with 5 million compared with 1 million in 2016. And yeah, the revenue is, the revenue is 40 times now compare with 2010.
Paula: Oh my goodness. That’s great. Multiplying.
Thi Thu Hien Tran: Yes. Yeah, multiplying. So yeah, and then with our network of partnerships, we work with all, most of the major partners in Vietnam. And then we also have part of that project, we, what we propose is to upgrade our system. We use another system before Comarch and then, yeah, we need to upgrade that. We have need to, you know, buy a new system to accommodate.
Paula: More members.
Thi Thu Hien Tran: More data, more members. Right. And that is where we found Comarch. And yeah, during that time, I was in Singapore as a GM. So my team back here they, they work with Comarch and that is the project that implemented within two years within COVID. People meet only one time and everything done during COVID.
Paula: Oh my goodness.
Thi Thu Hien Tran: Yes, that is.
Paula: Yeah. I didn’t realize so recently, Hien, that you moved over to the Comarch platform.
Thi Thu Hien Tran: We recently, I think 2021.
Paula: Okay. Incredible. And I saw some videos that you guys did together and first of all, amazing that it was through COVID. Secondly, I think English is not your first language, nor is it the first language for most people in Poland, of course. So that you’ve managed to create such a beautiful relationship.
And what I really liked was, I know you said in the video that was also coming from some of these airlines as a referral and a recommendation. So I just want to say, well done to the guys in Comarch for winning your business. But based on existing happy clients in the industry.
Thi Thu Hien Tran: Yeah, yeah. Comarch is also very like, agile because at that time we also had don’t have a big budget. So they also offer good yeah, good commercial terms over there.
Paula: Okay. Okay. I think our audience will be pleased to hear that. Brilliant stuff. The other piece I wanted to touch on Hien was just, I guess, what are you most proud of? I know you’ve built a simple but scaled solution. You’ve got your co-brand card. As you said, you’ve got lots of partners, so you’ve built the proposition. You’ve taken it beyond a frequent flyer program into something much more accessible. You’ve rebranded it. Is there anything else that you’re super proud of with Lotusmiles that we should talk about?
Thi Thu Hien Tran: I think there’s different things I’m sure I’m proud of the Lotusmiles, the one of the thing, I’m from sales, right commercial people. So the growth in revenue is and the growth, when you see that the spending of the co-branded, by Vietnam Airlines and Lotusmiles program. We are the bank in Vietnam is you know, we see the growth all over the year and it’s become more popular when people, the people who doesn’t fly, they don’t fly a lot, but they earn miles and a lot of people become platinum or gold from spending on Vietnam Airlines. And they, yeah, and they a lot of our customer they don’t have to buy the airline ticket. They just redeem their miles and they travel business class everywhere. So, yeah, because Vietnamese are also very entrepreneur, right? They have, a lot of them are, they’re businessmen, business women.
So, so that when you see, and when you see the mix of you know, the miles and the travel, And yeah. And, when I see those kind of of customer who use our mind to bring the whole family on business class or to Paris or to Singapore, that is I feel pride you know, proud. I feel proud over there. So, so touch when you can bring those kind of.
Thi Thu Hien Tran: Yes.
Thi Thu Hien Tran: That practice is in, we see that it’s happened in US, right. In North America, in other part of the world, in Europe, but recently become a practice in Vietnam. So we proud of the whole team. We are proud that we bring some international standard and practice into Vietnam market. So that is the, we bring something for the Vietnamese consumer.
Paula: Yes, and it’s lovely to hear that the seats are being made available, Hien, because sometimes in many markets, for example, I’m seeing a lot of PR in different places. Like I think Australia at the moment is quite difficult to get reward seats for people who have been loyal to different airlines, but if you’re making those available at scale again for an entire family to travel business class and to get the ultimate rewards, of course, which is to get those free tickets with their people that you love and create those experiences.
So no wonder you’re very proud of that. And clearly what you’re doing is bringing your revenue management colleagues on the same journey. So they’re supporting you and making those seats available for the people who are being loyal to the airline.
Thi Thu Hien Tran: Yeah, you know when we learn about the loyalty, airline loyalty strategy one of the most important factors for airline loyalty program to be successful is you need to be operated in a well, you know, the highly populated countries. And you should have more short haul sectors, of course, segment where, you know, people can read in, right?
Paula: Yeah, nice.
Thi Thu Hien Tran: So, so, so in Vietnam, we, what we have that kind of factor. So when we look at those, but that is all the fundamentals.
Thi Thu Hien Tran: The basic that yeah. So we will never forget the basic. And sometimes, you know, we will get, forget about why we started. And then I always, I’m always the one who bring everybody back. You know, we have to go back to the basic.
Paula: Okay. Wonderful. So what does the future hold, Hien? Coming in now to 2024, you sound like you have really achieved some great results already bringing the business along in terms of getting to a 5 million membership and all of those other wonderful propositions. So what are you thinking is important for the future of Lotusmiles?
Thi Thu Hien Tran: Yeah. So the first in the next five years we want to become we are, we have been you know, co live setting up a coalition with different partners in Vietnam, right. But we want to be mega coalition. Super. So many. And that needs to be done through you know, API not just my agreements. Right. So we have to invest a lot on IT as well.
And the other thing is we want to you know, to bring more chance of earn and burn to the consumer in Vietnam. So that is yeah. So it’s become make Lotusmiles become a really valuable ecosystem in Vietnam. So that yeah. So, you know, loyalty, come back to airline loyalty, come back to the very basic within SkyTeam. A few years ago we had a campaign or a project called that Back to Basic, right. Back to the basic. Yes.
Paula: Nice. Okay.
Thi Thu Hien Tran: Earn and burn. And normally you know, when mentioning, talking about loyalty, people will think that it’s a very complicated, but we, if the professional like us, we make it complicated. It’s become complicated. So every time I go out to talk with my team or customer, right? Loyalty is just earn and burn. And our main responsibility and main vision right, main job is to increase the chance for customer to earn more and to burn more.
Paula: I love it. Okay. Yeah. Back to basics. Keep it simple.
Thi Thu Hien Tran: Back to basics.
Paula: More earning and more burning. And it’s everybody’s. Yeah. Wonderful. So listen, I don’t have any more questions for you today, Hien. Is there anything else you wanted to mention before we wrap up?
Thi Thu Hien Tran: I think it’s, that’s enough. I yeah, we cover almost everything.
Paula: Yeah. It’s a wonderful story. Yes. And I please God, we’ll get to Vietnam someday. Like we talked off air. I’m not sure when, but it’s a country I’m fascinated by and be really exciting to meet you in person. So with all of that said, Thi Thu Hien Tran, Deputy Director of Lotusmiles for Vietnam Airlines, thank you so much from Let’s Talk Loyalty and Loyalty TV.
Thi Thu Hien Tran:Thank you. Bye bye.
Paula: This show is sponsored by The Wise Marketer, the world’s most popular source of loyalty, marketing news, insights, and research. The Wise Marketer also offers loyalty marketing training through its Loyalty Academy, which is already certified over 500 executives in 38 countries as certified loyalty marketing professionals.
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