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 today’s episode of Let’s Talk Loyalty, featuring some incredibly exciting updates from the loyalty program I personally use most often, which of course allows me to share both my professional and personal perspective on the program. Emirates is known and respected globally as one of the world’s best and fastest growing airlines.
And its loyalty program Skywards now recognizes and rewards over 32 million members around the world. Based in Dubai, the Emirates Group employs over 103,000 people from more than 160 nationalities, and in early May 2023, they reported their post pandemic turnaround results delivering their best ever profit of 2.9 billion US dollars.
In today’s episode, I’m once again joined by Dr. Nejib Ben-Khedher, Head of Emirates Skywards who shares all their latest exciting news, including the launch of the Skywards Everyday Proposition, which will be fascinating to anyone considering launching a cardlink concept for your program. Nejib also explains how and why the Skywards currency was recently adjusted, and how the program has managed to protect its most valuable members while also reflecting the commercial needs of the airline.
Other exciting news you’ll hear today include Nejib’s incredible statistics on their earn rates for both airline versus non-air airline activities, which proves how effectively Skywards is achieving its goal to become a truly global lifestyle loyalty program rather than simply an airline frequent flyer program.
I hope you enjoy my conversation with Dr. Nejib Ben-Khedher Head of Emirates Skywards.
So Dr. Nejib Ben-Khedher, welcome back to Let’s Talk Loyalty.
Dr Nejib: Hi Paula, and thanks for getting me on the show again.
Paula: Wonderful. Actually, it’s your third time, Nejib. I was just looking back. It was I think a year and a half ago since the last time, kind of October 2021. And before that actually it was just before COVID.
So we’ve had quite a traumatic journey along the way with following the Emirates journey, and it’s been absolutely incredible. So lots of congratulations are going to be in order today as we go through the conversation, both in terms of Skywards itself as a program, and of course the airlines performance recently announced is amazing.
So with all of that, to get straight into Nejib, as you know, first and foremost, we always start these conversations by trying to understand your favorite loyalty program as an industry professional so we can look to other programs and learn from them. So let’s kick off with that particular question.
Nejib, what is your favorite loyalty program?
Dr Nejib: Sure Paula, and I don’t know if it is the same answer I provided last time when we had our first podcast, but, we talk about a couple of programs. They happen to be partners, but that’s really totally coincidence that I really look up to. And, the first is in our, in, you know, direct industry, meaning in the airline industry and this Qantas frequent flyer program.
It is really, when I look at it, extremely innovative program that keep on raising the bar for all of us by introducing new products that are not core to the airline, at least when you look at them, the first time around. But you understand that they play a big role in maintaining that level of engagement that ultimately will serve the airline as well.
But I think if you think, if you look deeply on how they’ve been successful in doing so and being so agile in implementing all these new ideas, it’sI think the structure they put in place and the operating model that they have, working with the airline, continuing to be 100%, you know, under the online airline umbrella, but having a level of autonomy to do what they need to do.
The other piece I think I found fascinating is the rotation of staff. If you look at the loyalty program and how, and the people who have led it, most of them come from the airline or rotate back to the airline, which helps really infuse the loyalty spirit or within the airline and culture, within the airline itself, but also, allows stakeholders from the airline to come and work in loyalty, understand the complexity of it, and also, contribute to it as well. So for me, that whole setup works extremely well and something that I myself contemplate and look at as a good example.
The second, again, a partner. Still in the travel domain, but not an airline. And it’s Marriott Bonvoy, and there truly is the scale of the program. Amazing. You know, more than 150 million, under 60 million, members. A merger of Marriott and Starwood. You know, more than 30 hotels, brought in, to add on to the Marriott portfolio from Starwood. And that merger is not an easy thing to look at. You know, when you know, not only from aligning teams, but also, more from an, aligning cultures and also streamlining the technology.
A massive undertaking by the Marriott team. And the Starwood at the time now, and the Marriott Bonvoy umbrella to, align the technology streamlining and converging the platforms, into what they have today. And I know it, it was not an easy task to go do. But again, my hats done for making that happen.
It’s important for us as partners in the world, your word reward program, to have that stable technology that they have in place for us to engage with. So that’s from truly a program.
But, if you allow me, Paula, I really wanna talk about two individuals as well. Two, I would say, relatively young professionals. So not the, they haven’t lost the hair that I’ve lost.
Paula: I’m going grain achieve, so I totally hear you.
Dr Nejib: But, and, you know, they also come one from the airline and the other from the hotel industry. You probably have guests. So it’s Mark Nasr from Air Canada and then Mehdi Hemici from Accor and ALL.
And then, you know them all. I mean, they’re young execs, within the loyalty, I would say Loyalty Plus Space. Not only loyalty because they have a broader portfolio under their limits, very dynamic, innovative, engaging. Always a pleasure to discuss industry trends with Mark in particular have worked on expanding the number of partnerships.
We are pleased to be one of, of the partners that they, he has now in the program bringing, of course Aeroplan back, under the Air Canada umbrella. But he, you’ve been expanding and it, you know, a week doesn’t pass by without seeing, you know, Mark posting something on LinkedIn around the new partner that he’s bringing on board, again, in a number of areas.
And Mehdi as well on the lifestyle component for ALL and what he has done there to really change the program. I didn’t, I mean, I’ve been a member for a while, but truly have seen the change, radical change, in positioning of the program itself and sponsorship they’re doing and all, and the whole piece around lifestyle, itself.
So for me, you know, two individual individuals who have really succeeded in transforming their loyalty programs into something very different, from when they’ve inherited the programs.
Paula: So wonderful.
Dr Nejib: I can go on and on. By the way, we all as loyalty experts, and I know your program is a great platform to bring all these expertise in and for us to get inspired from other leaders and other programs on what they’re doing. And again, I mean, I get to discover their work through you. So thanks Paula for bringing the community together.
Paula: You’re so kind, Nejib as always, and yes, particularly, I like how you’ve answered that in giving recognition to people actually. And that’s something I’m gonna reflect on that maybe we should do more of on the show, because at the end of the day, the program of course is the end result, but it’s the people at the beginning that are inspiring those changes that really are driving, I suppose, all of the insights and expertise, as you said.
So we’ve had Mehdi on the show, of course, from Accor and absolutely incredible what he has done in terms of, as you’ve said, transformed the business to make sure that that is a lifestyle program, but fundamentally connected to the business objectives of the group. So, huge congratulations to him.
And I don’t know, Mark, actually, but we’re due to have Air Canada please got back on the show again soon, so maybe we’ll, we’ll pick that up separately.
Dr Nejib: Yeah, I recommend that’ll, he’ll blow you away with his energy.
Paula: Super. So let’s get straight into all of the news. In the last time since we spoke Nejib, I think the first one I want to celebrate is 30 million members. Tell us about this new milestone.
Dr Nejib: Absolutely, Paula. 32 now. So as, as we continue to onboard new members at, at a pretty fast pace, given also, the fact that, as you mentioned, the airline is hitting some new records in terms of passengers and in terms of revenue. So we’re onboarding around 300,000–350,000 members every month.
And therefore, it’s just a matter of time before we hit the new milestone and, and, and celebrate that with our members, which we did, when we hit the 30 million, few months back. Yeah, I mean, I think that the one thing I’m proud of is truly the fact that we’re growing, also outside of our home base UAE.
So now we’ve reached about more than 4 million members in the UK. More than 3 million in the US and in the UAE we’re, it’s about 2.3 million. Australian, India, as well are our big basis of ours, with more than 2 million member each. So it’s good progress. I would say, truly 90% are outside of our home base, which makes us truly a global program by design.
Our top five countries represent 40% of our member base, but 50% of the active members and 60% of the high tier members, as well, premium members. So it’s a global program. Again, we’re, we’re going at the fast pace where the line is helping obviously for us. And the introduction of easy ways for people to enroll in, whether at the airport, or, onboard, is helping us also again, acquire more, I would say, qualified members, people who are actually flying with us and enjoying the experience on Emirates and seeing value probably in getting into the program and getting to the benefits.
Also, the introduction of things like wifi for all the Skyward members are gonna help with the acquisitions as well. And the fact that from the first mile you earn, you can actually redeem that mile on cash plus miles or other, benefits, or rewards, as well, I think is helping get people on board.
Paula: Well, so much to talk about. So the particular piece, and actually you had some lovely words last time when we were preparing for this call Nejib. You just talked about an accumulation of wealth, and I thought that was a beautiful way actually because, you know, really Skywards is a program for Dubai.
You know, it’s a currency for this city. It’s a flagship for the country, actually. I think as a currency and as a program. And in some ways, I think a lot of people maybe overseas might say, well, actually, it’s the airline or it’s the country. But I do think Skywards is quite visionary in terms of its laser focus on providing this wealth back to its members with all of the challenges.
And we’re gonna get into exactly some of the challenges that’s involved with that. But tell us some of the new ways that people can acquire the Skywards currency, just so we can get a full understanding.
Dr Nejib: Yes, Paula, and thank you for your nice words. We actually, we are an integral part of the airline, and the airline plays a big, for a big, really, you know, incentive for people to join the program.
Also, you mentioned Dubai. Dubai as a destination. It’s been on the map. It’s very high regarded now by a lot of people who are seeking to, to get an experience and ranks very high in a number of ratings. So, you know, those two components absolutely help the program grow, at the pace it’s growing.
And, but we continue also to look for ways for us to help our members earn more, as we go. I mean, obviously working with partners as well. Today, 55% of the miles earned are actually coming from flights, but 45% come from non flights. So from all partners that we so really close to this 50 50. And that’s, again, that’s a big progress over, over the years, since we started the transforming the program to more of a lifestyle program. Focusing on the earn but hopefully, in the near future, we’ll be focusing on the burn side, where we’re gonna expand the opportunities for members to burn.
So the latest one, actually it’s more of a relaunch of an existing platform that we have created, which called Skywards Everyday. Today, it’s mostly focusing on the UAE, both for residents and visitors as well. And it’s basically, you know, a platform where we have more than 200 retail partners, who are on this platform and who can earn Skyward miles, or members can earn Skywards miles on when interacting with these partners.
So the launch consists of card linking solutions that we have put in place. Basically, you can link up to five, cards, Visa or MasterCard. And then all you have to do, it’s totally seamless. You just walk into a store, or go for a fine dining or go grocery shopping, and then you swipe your card and you get the miles. So it’s totally seamless. It’s easy once you have linked your cards, you could just enjoy the benefits of earning those miles.
You, know, I, I like to talk about this triple dipping. So some of these outlets, Actually have about 200 partners, 800 outlets. Some of them are in Dubai Mall, Dubai Mall, being also a partner of ours where you can earn, On, on any of the shops, or any experiences at Dubai Mall. Dubai Mall is a destination mall also that caters to both the residents and for, to visitors.
And then obviously if you’re using your co-brand credit cards, you know? The more, the merrier. So you’re, you’re ending up with this triple dipping, and it makes it truly, truly worthwhile to go on a shopping spree at Dubai Mall.
Paula: Totally. Yeah, for sure. And I’m not just saying this because you’re on the call with me, Nejib, but I had I think, a full hour long conversation with some friends last Sunday when I was visiting at the weekend.
And I spent most of that time explaining to them that they needed to download the Skywards Everyday app, explaining the simplicity of the card linking proposition. And they were delighted. And as non-industry people, of course, it was super amusing to me to see, you know, how a member who might not be actually you know, flying frequently, you know, more engaging on the lifestyle was truly blown away.
So, that’s going to be, I know, a huge success. I have double dipped myself, of course, as well, with. And it was brilliant actually. It was just a lovely experience where the Skywards Miles popped up in the app immediately as soon as I paid my bill. So, so that was, I think, truly the definition of seamless. Would that be fair to say?
Dr Nejib: Yes, absolutely. Thanks Paula, for recognizing that and for being a true champion of the program too.
Paula: Totally. I love testing it. I love testing it. And we all need as much advocacy as we get. So, that’s an extraordinary proposition. So, absolutely growing. I love the lifestyle piece.
I love the fact, as you said, you’re approaching 50 – 50, and I think that’s probably a lesson for everyone learning that actually, of course, the transactional piece that we do day to day. You know, when it’s flights, of course, in your example, there are so many more opportunities. So you’ve talked about the earn side, and you also told me last time that now I suppose the challenge you’re facing is on the burn side.
So talk us through your thoughts both on the airline piece and again, potentially on partner sides.
Dr Nejib: So, the burn continues to be truly skewed towards the flight rewards. Actually, you know, those are the aspirational rewards that people look for. So 80, 85% of the, of the redemptions continue to be okay on the, what I call the flight rewards.
Now, the difference is probably the fact that we have more on this customized rewards. I include that in the flight rewards. We had about 40 billion miles that have been really redeemed on flight rewards. And a good portion of those or con, is, is on, obviously on classic rewards and upgrades, but also now a good portion comes from cash plus miles as well.
So people, you know, from the first mile and people who have not accumulated enough miles for classic rewards and upgrades can actually see value for every mile that they have earned.
Now for the 15% remaining, it’s mostly on, on lifestyle, but a lot of it is on Skywards Hotels on Dubai Duty Free. But soon enough you will see it also on Skywards Miles Mall, which is a retail platform that we have working with a number of online retailers mostly. Across US, UAE and UK, but now expanding to India and Australia as well shortly. We’re also, we intend to have a reward functionality on Skywards every day as well with the partners that we have on the earn side to allow for burn as well.
So, we’re expanding in all these categories. lifestyle, travel as well as I mentioned, Dubai Duty, Free Skyward’s, hotels, and then, on the flight rewards themselves. And I know the elephant in the room with this whole talk about devaluation, which we’ll get to.
But how about talking the other way around? We have increased cash plus miles conversion by 50%. So it used to be around 0.50 cents per mile. And it went to 0.75 cents per mile. So this only happened two weeks ago. So when people talk about evaluation, I want to talk about reevaluation and adjustment.
And this is, this makes 3D cash plus miles extremely effective. So actually cash, cash plus miles today goes from point 75 to 2 cents per mile, which is truly, a big value proposition that we’re putting to our members. And probably one of the highest, cash customizers you see out there now, 2 cents is more on promotional flights, that we’re putting.
But the 0.75 is a guaranteed rate that you will get for every mile that you’re, you’re burning. On any flights, I remind everybody, any flight, any cabin, any day. So it’s not constrained by, by inventory, like a classic reward is or an upgrade is. So great value proposition for our customers.
And if I go back to this triple dipping and the fact that you have this value proposition we’re putting out there, we can beat any cashback credit card that you have out there. And truly the return is massive for our members, and it could go up to 10% return on every span they make. So, you know, I think the, the avid frequent flyer or a loyalty member who can just go through the computation will find out for themselves that this is a great value proposition.
You know? And, I say, I mean, you know, if I look at our active members in the UAE, 30% of them have co-brand credit cards. Just tells you something. I mean, nearly one third of our active members in the UAE have co-brand credit cards. So they’ve seen the value of, of having that versus, you know, and you know about the UAE market. You’ve got a choice truly.
Paula: So many.
Dr Nejib: Of credit cards that you can get. So for us, to be able to compete, and also offering this value proposition to our customers, I think will allow us to even compete farther, in terms of getting a wallet share.
Paula: Yeah, and that’s a great statistic as well, Nejib. And I always love that you share so generously in terms of the actual numbers because again, we’re all here to listen and learn. And I just read a statistic last week on LinkedIn from one of the American Airlines where they were quoting that only 12% of their member base had a credit card, a co-branded credit card.
So to have, you know, more than, what two and a half times that in Emirate’s home market is absolutely extraordinary. So, and that is, to be honest, where I earned the vast majority of mine. And even with the devaluation, which is definitely a big topic for today, I also managed to get a redemption flight in business class to London, which I have been busy telling people about.
So, there’s definitely joy and availability in that, you know, whole, I suppose complex, plan in terms of whether or not we can actually get those inspirational rewards that you talked about. So yeah, that is what we sign up for, but there is inventory available, so.
Dr Nejib: Yeah, there is, there is. I think there’s actually, if, if I look six months ahead, nearly 40% of the flights have reward inventory available.
So you know, I think it’s misconception. I would just say also there are, you know, I mean, you’ve, you’ve seen how busy the flights are, but on certain destination. You can just understand that it’s extremely difficult. Now, Paula, I need to find a way to convince you that this devaluation is not one, I use the word adjustment and I will explain why when you have a chance.
Paula: Okay. So of course the media’s never kind, but we are, we are industry media, so we are definitely here to be kind. So what I want to understand is, what has changed in terms of the adjustment, and I’ll use your language of course, because I do think you did an extraordinary job on the local radio stations, for example. I did see you on Dubai Eye.
And even explaining again to, you know, normal everyday listeners, outside of the industry in terms of why that adjustment was necessary was very compelling. And again, I wasn’t the only person to kind of think that. So tell us about, first of all, the journey that you went on in terms of needing to change the valuation and make these adjustments.
Dr Nejib: Yeah, I mean, to get to the bottom of it is, you know, the access to a reward seats, is competing with commercial fairs as well. So we’ve, we’ve, and if you look at what the commercial fair, you know, what happened to the commercial fairs in the past few months, I think you’ll understand that we needed to have an adjustment of some kind.
But you know, these are some of the points I highlighted also in my prior interviews, and especially the one that you’ve talked about at Dubai Eye. The, adjustment happened after 10 years of hiatus on classic rewards and six years on upgrade. So we haven’t touched the rate despite the changes that have happened on the commercial side. So that’s the first thing.
The second thing is, We’ve tried to protect our premium members. So again, I think we’re very consistent in saying if our members are paying a higher fare today, they need to earn more miles. And we’ve allowed our premium members silver and above to actually earn more miles.
And we somewhat protected them now, not totally, but we protected them in somewhat. They’re earning in terms of bonus miles, they’re earning more miles, as they’re flying. And, that helps adjust a little bit, this increase that we have in reward and upgrades. By the way, we increase rewards by 20% and upgrades by by 30%.
So, and as I said, it took us a long time to just make that happen. We always look into the economics of things and etcetera, and also look from a member perspective, et cetera.
If we compare to pre covid, the average members have accumulated, you know, I talk about 12, but have accumulated 20% more miles because we were, first, we didn’t expire the miles and second, we actually allowed members to earn more on other channels than flying. Even then, when they were not flying, they were accumulating miles.
So, the reality is that members have more opportunities now to earn than before. So for us, you know, again, we wanted to make sure that, you know, that they had that wealth to be able to enjoy the rewards.
Now, we didn’t change economy. So as a matter of fact, for a silver, gold, or a platinum member, when they’re getting an economy reward, they’re better off because they’re earning more miles on their flying, but they’re burning the same amount of miles on economy, which means that it requires less flying for them in economy to be able to get a free or a reward seat, if you will.
There’s one other maybe stat or fact that I wanted to share with you, that probably I didn’t share in my prior interviews is, is this multiplier between commercial fair when it is economy, or first class business class versus economy?
So in commercial fares, a first or a business class is about six to 10 x, an economy fair. If you look at the reward and why business and first continues to be a very attractive reward proposition for our customers. We’re talking about two to three X.
So, we’re still, I think, below what we should be charging. I mean, I know, everybody thinks it’s a lot, but if you’re compared to the commercial fairs, we’re still a very attractive value proposition when it comes to business and economy and business and first class, which is, again, the most aspirational awards for our members. We’re also, I mean, you talked about the inventory.
We have two levels of inventory available to our members for reward seats. So we have the lower tier, which is the Saver tier, which is very restricted from an inventory perspective for a good reason. And then we have one, which is the Flex One, a bit more expensive but that allows you to have access to the same seats as you would have commercially.
And what we’ve seen is we’ve been, we’ve seen a big shift towards that from members. Again, members have accumulated enough miles for them now to be able to actually go to these. Flex fares where they have a bit more, more seats. So you may be surprised, but the number of classic rewards that have been redeemed in this financial year versus 1920 is 40% higher. But the number of miles are higher as well. The average number of miles is higher as well, simply because of what I explained the access to inventory.
So you have to look at all these elements, and for me, it’s an adjustment. We’re really, I mean, it’s, you know, past the shock of this increase. I think when people sit and understand the rationale behind it and understand how the economics have worked and even understand the impacts on them. I think, you know, they’ll find it extremely reasonable. What we have done, we’ve truly on the side of our members here to again, protect that access to inventory. and ensure that they have also enough miles to be able to continue to enjoy these type of rewards.
Paula: Well, I can only imagine the complexity and I’m sure there was a lot of internal pressure.
Dr Nejib: Well, that’s a fair, you know, a fair state of affairs if you’ll, for us to be able to argue our case internally, to be able again to allow our members to have access to these benefits.
Paula: Yeah, no, it is a reality and I like that you explained that the multiples of fare, because again, most people I know, again were paying for our flights personally, were highly unlikely to pay a business class fare So if we can earn enough Skyward miles to either get the cash plus miles or redeem a business class ticket, well that is absolutely a game changer.
So to kind of feel that we’re, in some ways getting a better deal when we think about it from a multiples perspective, I think that definitely makes me feel like, yeah, I’m kind of winning. Which I think is ultimately what we’re all out to do. And, for sure when you explain that, you know, none of that pricing was changed on the redemption side for 10 years.
I mean, none of us have left our kind of pricing or salaries or anything. Please, God unchanged for 10 years. So I think that is the point that landed with me. And it does feel fair. And as I said, I still did manage to get a redemption seat and I also managed to change the date of the booking twice, which again, also I think reflects what seems to be going on.
Yeah, I mean, behind the scenes, as you’ve said, you’re advocating for these people, for us as members, and we’re getting access to flexibility, which again, is something we definitely need. So, lots going on. All of the complications, and I know while you are working through this adjustment as well, you were also doing two jobs Nejib, in terms of not just running Skywards, you are also the Interim Chief Information Officer for Emirates, which I know you’ve recently managed to hand back over.
So just tell us a bit about the IT side, because again, I think people look to Emirates as an airline, and I know you’re at the start of a transition to a new platform. So tell us what’s going on, just in terms of your infrastructure. Yeah,
Dr Nejib: It’s a massive pro undertaking for us, you know, on, on this, change of platform.
As you know, it’s a program that will last almost probably two years and a half to three years. Again, it’s like a heart surgery, if you will. No, the challenge for us, and you talked about, you know, challenges, earlier. The challenge for us is really to continue to progress as a program.
And we have, You know, dozens of initiatives, that, hopefully, you know, we’ll talk about in some of other programs, whenever we launch them or we close to launching them. But we have all these initiatives and I cannot just stay idle and wait for the migration to happen for us.
So it’s just, we’ve got to really have a balancing act here where we decide on what we progress on as a program, new features, new capabilities, new partners that will bring in. At the same time, we have to be cognizant of the fact that we’re moving to a new platform, and we make it more difficult for us to make that migration as we add on additional things on the existing platform.
So, we’re kinda have to find that really balance between these two. And the team is you know, working very hard, both our technology teams and our business teams working very hard together to find that right balance as we go forward. I really don’t wanna slow down.
I mean, you, you’ve seen what we’ve done in the last few years, even during the pandemic. We wanna continue to be at the forefront of loyalty programs, innovating and, again, bringing new features and new capabilities to our members. You know, we’ve launched the subscription.
We’ve, I mean, all of these things are very, very time consuming from a technology perspective. I believe a lot in technology as an enabler. Not simply because I’ve been CIO for 18 months, but I’ve always believed in this and always, thought of it as a close partner. Even it was even a close during 18 months where I had to ha wear the two hats.
Paula: I can only imagine.
Dr Nejib: And help on both sides, or bring the two sides closer together. But, you know, the digital journey for us from a scars perspective continue, you know, the launch or relaunch of the Skywards Everyday app is an example of that. But, whatever we can do to make it easier for our members, you know, to enroll and to engage with the program. I think it’s, it continues to be very important. So, new platform. You know, I mean, it’s not just the fact that it is new platform, it’s also us outsourcing the platform to a partner and not doing it in-house.
Okay. So we’re moving away from a system. In-house system that’s been there for 22 years, since the inception of the program. By the way, Skywards just celebrated its 22nd year.
Paula: Amazing.
Dr Nejib: So now an adult.
Paula: Grown up.
Dr Nejib: It’s a grown up program. And moving and working with a third party is not as, you know, it’s in good spirit. I think there’s a truly partnership spirit, for us with IBS working with them very closely. And then, hopefully we’ll be able to, not only implement, but also help IBS with the progressing their product as well going forward.
Paula: Amazing. Well, congrats to IBS, that’s a huge opportunity for them and wonderful to hear who, who you’ve gone with, and I think it’s a big decision actually. We just had an event ourselves actually Nejib, literally talking about this exact, I suppose mindset, challenge, and I suppose just the complexity and the implications of something that when it’s internal, of course, if something goes wrong, you have full control.
Presumably you can drive forward in terms of the roadmap more easily, but then there’s other benefits to going externally. Were you nervous about that in terms of the total shift of bringing it outside to a partner?
Dr Nejib: You know, I’ll share a secret with you. Not a secret, because I think the industry knows about it. We’ve been on this journey for nearly five years of trying to find the right partners and deciding whether we go external. We stay internal. You know, the platform is end of life. it’s a legacy platform that we have. It served its purpose. but now I think it was time for us to change, modernize the infrastructure.
Would have been a massive undertaking as well internally. But we made the decision to go external and, you know, we believe we found the right partners to do so. I think more, you know, more than the technology itself, it’s mindset as well that we kinda appreciated, as we are negotiated you know, the terms of the deal.
But you know, once the contract is done, it’s much more about how do we work together. And they know we’re fast pace. But we also know that they have a client base that is, again, that they have the same mindset than ourselves.
You know, they’re probably not programs as well, you know, I just happened to mention. My favorite programs, they’re part of that list. So for us to maybe work together to advance this platform, yeah, it’s important and find ways for us to have the agility that we always had working internally and to be able to do that externally as well.
So we’ve got a lot of ideas, Paula, and You know, and it is, it is gonna be,we need to write to find the right partners as well, to be able to continue with that agility and to implement some of these ideas as well.
Paula: I remember last time we spoke, actually that was exactly what you were saying. There’s no shortage of ideas for Skywards. It, it’s purely a shortage of resources and capacity.
But I do like the idea of going external and I think if I was in your shoes, that would also feel like the right thing to do because that allows you to focus then purely on the members, purely on the proposition, and let your partners focus on building, scaling, and I guess future proofing as well.
Because we all know the roadmap, from a technology perspective, is extremely important because nothing’s gonna stay the same for very long. So very exciting to hear all of that’s happening.
And the other thing we talked about last time, you briefly mentioned Skywards Plus. And with subscriptions still a hot topic of course, for loyalty professionals in all sectors and, of course all around the world. Tell us, how is Skywards Plus doing for you?
Dr Nejib: Doing extremely well. And I said, you know, we launched it, or we tested it, I would say just before Covid, and then COVID hit and things slowed down. But now we’re back into ramping up the program. I mean, very, I mean, I don’t know if I shared those statistics before, but, you know, it’s very interesting.
But 40% of the people who are subscribing to Skywards Plus are actually gold members. It’s very interesting to see that our premium members are also most engaged with the subscription. And the subscription has something for everybody. We have these three packages.
The basic PA package is really intended to give you a taste of the benefits that you would be getting, lounge access, baggage lounge and all these things. So it caters more to, I would say the blue members want to have a taste of the program, and the tier status and what they would be getting.
But they’re subscribing to it. They’re paying for it. And then ultimately if they’re flying enough, they’ll be able to access these benefits just, as part of the benefits that they, the rewards they get out of the tier status.
The other interesting fact is that 60% of the subscribers went to the premium package, which is the $999 package. And the reason is mostly around tier retention, or tier upgrades. So what it does is it provides you with 20% tier minds. And, why we found that that’s what’s the most attractive part for some of these premium members is for them to be able to retain their status.
So 60% are actually going for the premium package and as I mentioned, 40% are gold members and 40% of the members are actually UAE based. But 60% are outside the UAE as well, which means that it’s not just for the people who are here in our home base, but elsewhere as well.
So the program I think from a growth perspective is doing well. We’re onboarding more and more members. And as I mentioned, it’s very interesting to see that even our premium members are extremely interested in what the program can offer. Again, you know, you get, 20% discount on the reward seats, which by the way, cancels out the 20% increase that we’ve just done, and then on upgrades as well.
So, yeah, there’s something for everybody, and then I think it was the right decision for us to go with these different variants and not just one variant to give somebody access to whatever they’re they like.
By the way, this is part of maybe I’m not anticipating one of your questions in terms of where we’re going next, but you know, truly, we really played around with this idea of having this A la carte program, if you will.
Because the different benefits within each one of the tiers mean different things to different people. And, people are interested in one thing or the other. But, you know, thinking about this whole concept of A la carte program customized to the individuals, again you know,
Something aligned with this whole personalization drive is where we want to go. Again, the technology is not there to support something like this. Because you have to think about all the touch points and how they’re going to be dealing with some of these benefits that are gonna be, you know, personalized.
But, you know, definitely we need to find a way, technology wise, not simply with the loyalty program or the loyalty platform But also all the systems that interact with it to be able to consume that type of information. as well. So, this something that we’re thinking about is something that we were aiming at, but we found that the subscription was this first step into making that happen.
Paula: That’s fascinating, Nejib, because as you were talking through the benefits, I was again, thinking a little selfishly about an upcoming trip that I’m hoping to do to Rio de Janeiro to The Loyalty and Awards Conference. Where, you know, again, it’s always extraordinary, but it’s very far. And of course that means it’s going to be more expensive in terms of the trips that I’m planning this year.
But if I could manage to get myself a 20% discount on my Skyward miles with the subscription, of course that might make it that much more, more appealing.
I wanted to ask about the education side on that one, Nejib. You know, I kind of feel like subscription is something that people seem to be taking time as members.
I’m speaking now, not as industry professionals seems to be something that’s happening more slowly. Certainly from an airline perspective. There’s not many airline subscription loyalty programs that I’m aware of. Would that be fair to say that it’s taking people a while just to really kind of understand, maybe quantify, maybe do the mathematics really to kind of go, is it worth taking this subscription out?
And therefore there’s a maybe a bigger job to be done just to educate people. Because it’s a, it’s a very new concept, I think because yeah, frequent flyer programs were always just given, but now there’s a different model. So I would just love your thoughts on that.
Dr Nejib: Of course, you know, by the way, the program continues to be free for people to enroll into. The subscription comes as on top. These are additional benefits that you’re getting on top of everything else that existed. We didn’t take away anything from the existing tier status benefits, we just added an, onto it. And as I said, we played around with some of these benefits to see which ones are the stickiest and the ones that are more attractive for our members.
Now you, you’re so right on this whole idea of communication and what we’ve seen is every time we communicate, we see the spike in terms of subscriptions. It’s not something that is known to everybody. Obviously, if you go to emirates.com you will see it somewhere in under Loyalty. You’ll see a description of Skywards Plus.
But whenever we communicate, we see a spike. Which means people really don’t know about it as, and it’s something that, probably our active members, because they’re the ones who actually interact also with our status newsletter, monthly newsletter, and they see it there and they’re the ones who actually spend time reading it, are the ones who are enrolling, and engaging more with this, with the subscription.
It can also be a bit complex because it has all these benefits that add up as you, as you, as you construct your packages. And there are obviously few caveats here and there, so people needs to truly understand the terms and condition. One of which is, by the way, the fact that you only get these 20% bonuses, etcetera, if you’re booking online.
So, you know, we do have people, we’ve been also very flexible. So when people didn’t understand very well, came back to us, we actually, you know, reimbursed them and stopped the subscriptions. Cause some of our premium members used other agencies, for example, for their bookings. They didn’t know about this, online or didn’t pay attention to it.
So we add on the side of the customers in this size, but very, very minute number of people. Now, the very interesting statistics is that the majority of the people have renewed the subscription, year after year.
Paula: I was just about to ask. That’s amazing.
Dr Nejib: Yes. And this is the, you know, really it’s an indication for us that, for those who know about it, who have experienced it, like it, and a lot of word of mouth, Paula as well. People who have subscribers to the program have told their friends about it. And, so it’s a good word of mouth, etcetera.
Now we are gonna, you know, we’re actually fine tuning the program right now. We’re enriching it as well the subscription piece. We are gonna look at ways for us to give you also benefits around partners as well.
So going beyond just the pieces around the flight experience itself, but providing with access to partners. So whether it is, you know, the Emirates Holidays or, other partners as well,we will to have access to additional benefit curated experiences and other things.
So once we do that, we are gonna go with the more massive information campaign for us, to more subscriptions. But we see a lot of value. We see members who truly understand the mechanics of the program, engaging more. And, again, it’s more towards the premium members who have really a good understanding of what they’re getting more than, more than others who are new maybe into the program.
So yeah, we need to do more on the basic package and to do more about the blue members, the new members who are on role again. Definitely. But communication is key.
Paula: Incredible. And as you continue to enhance it and communicate it, with that kind of reassurance that the churn is low, that’s just a fabulous starting point because I remember it being a soft launch and I remember, of course everybody does very much go, why would I spend when I already maybe have a gold card?
So again, these insights around the fact that even gold card holders in such numbers are paying this additional to get that extra value. That’s amazing to hear. So I will be continuing to hear and, and to look forward to hearing what’s going on with Skywards Plus.
Dr Nejib: Sure.
Paula: So just to finish on the communication side, Nejib, we’ve talked about the statements and again, last time you shared a huge amount. I know in terms of optimizing both the personalization and the clickthrough rates, is that something you feel that you have achieved optimum performance or is that something that’s still ongoing for you?
Dr Nejib: No, I mean, we continue to see a really a good performance from personalizing further the statements. And that was really the piece that we focused on when we talk about personalization. Trying to understand again what members are interested in and providing, customized version of the statement to these members. So, we’re happy with that. It’s a collaboration we have with our, communication, corporate communication, marketing brand team as well.
So, it’s one, you know, fruitful, really collaboration with the team. But, you know, talking about what we’re doing in terms of, I would say personalization. To some extent what we’re doing online, and I know this is close to your heart Paula, you’ve been one of the first ones that brought, you know, Emirates online closer to, to Skywards in some way. That collaboration is bearing its fruit today. So, you know, 66% of the revenue on Emirates online is actually coming from Skywards members.
But, the one piece that we’re enhancing, is truly providing these empath offers, whereby, you know, when you are shopping for certain flights, so when you are logged in, and this is the importance of being logged in, and people continue to sometimes not log in when they’re coming on board.
By the way, only 25% of the sessions are logged in sessions. So we need to incentivize people and people who understand the value of logging in. I think will, you know, it’s important again, you know, we talk about communication. Just communicating to people that they’re actually gonna get delighted and surprises if they log in.
Because once you log in and we know who you are, we know how many miles you have. We know what are your past transactions. We know which flights you’re trying to look at, we know the forecast of these flight. We’re actually putting incentives on certain flights, certain cabins, certain fares, for, to, in, to incentivize people to convert in these sessions.
Skywards members convert four times more than the, non Skywards members when they’re, and one of the reason is the fact that we have this personalization piece that is, that is in path, in the shopping path, to help people convert when they’re shopping.
Now, I know earlier for Cash Plus miles, I talked about the 2 cents. That’s a promotional rate that you will find when you’re logging in on certain flights. And usually it’s on business and first class. But, you know, you’ve got these promotions ranging from 1 cents, a mile to 2 cents a mile.
You know, when you’re logging in, that’s on cash plus mile. But you also can do Upgrades during the session. So you could buy a Flex, or a Flex Plus and then upgrade on the same session to a Business if there’s a, there’s availability there.
So we have all of, you know, these offers Emirates online that cater to our members and that are very personalized to the member. So, it’s one of the things that we’re very proud of, as a team, and that we’ll continue to enhance using, a level of artificial intelligence to understand these interactions and be able to put the right offers into the members.
Paula: Yeah, yeah, I was exactly thinking that actually Nejib, to use your words from earlier, you know, when technology is truly enabling, you know, that’s what I’m hoping at some point, that there will be an easier way for all of us to be logged in, even when cookies disappear and without us all feeling like I have to go and remember my password.
Because I do think unfortunately, the tech is still a little bit behind where I think any of us would want it to be. So whether it’s artificial intelligence or whatever you can do that is quite disappointing that only 25% are still you, it know, logging in. So I totally understand that as a business and as an airline, there’s so much more power.
And again, loyalty program members, we understand it, but so many of us I think hop onto emirates.com and we just want to get a quick sense of fairs and availability and and we don’t realize that we’re actually not seeing the best actual results, that we might do if we took that extra couple of seconds. So a good message and a good reminder for all of us.
Dr Nejib: Yes. So, yeah, so just log in you know, that’s we need that 70, the other 75% to come in as well. So, hey. But to your point, this whole thing about, you know, we, you said it earlier, we talked about it, when we talk about Skywards Everyday, that that seamless is what we need to get through. And our technology can help do that. It’s not there yet today. But that’s where we wanna aim at for our members when they’re coming in our shop.
Paula: Of course. Absolutely. So, that’s everything I suppose. In terms of the current state of play, the current status, I suppose, looking forward, we’ve preempted it a little bit.
I’d love to get a sense of what are the things that you would love to do, any struggles that I suppose would, would tend to be on your mind. For example, we’ve just talked about the logging in issue. So what else is it that you would love to be able to do as Skywards that’s not currently, I suppose, easy to do or immediate to do?
Dr Nejib: I think I talked about the A la carte program or where we gonna get to in this whole, you know, customized benefits to our members. That’s very, very important. We really wanna do more around curating experiences for our members, leveraging the broader ecosystem.
So today, you know, I think you’re aware of Skywards Exclusives and what we’re doing there with a lot of the experiences that we’re offering and people bidding miles to go though. I mean, the latest one was this,you know, trip to Sri Lanka and spend time in the tea plantations with our partner Dilma there. You know, it’s very interesting on the average, members have redeemed 350,000 miles for that experience. So it’s just, but it’s by experience.
So it’s truly people, you know, really. I think, you know, enjoyed their time there. We have the FA cup going on right now,you know, with Manchester City and Manchester United. And that’s around, and people are bidding you know, up to 250,000 miles for that as well.
But we’ve got, a lot of assets as Emirates that we’re trying to leverage. But, on top of these sponsored events and assets that Emirates has, you know, offering for us, you know, what can we do working with our partners, as well, you know, whether it’s Marriott Bonvoy or Emirates Holidays, or others for us to curate experiences for our members and offer them, some of these aspirational as well, experiences that they can redeem their minds for.
So, that’s something that we need to work on. And we have a team that is now focusing on creating those experiences, for our men members as well. We’re doing behind the scene. You know, we’re taking two cohorts of numbers in the next few weeks to go to our EK engineering and watch, you know, the behind the scenes as well. So it’s, it’s always a very interesting, and I, opener, by the way, it’s, it’s free. It’s just for our Premium members, so Select members, but we’re not asking for any miles to be redeemed for that.
Yeah, so anyways, I mean, we’re, you know, for me it’s again, the way to build that emotional link with the program, right? And it’s not just about the transactions and this and that, it’s just about creating these experiences as well. So, that’s one of, one of the things we’re, we’re looking at.
And truly, I mean, the big challenge we have I’ve just talked about this whole migration to the new platform, which again, it’s, open heart surgery for the team, to go through.
I think one other items that is not for, you know, to share with our members is something very internal for us is working on this, transparency, full transparency as a PNL, within the airline itself. To make sure that we have, you know, the right reporting that within the airline, we appreciate the contribution that Skywards brings in. Not only, in terms of commercial contribution, but in general how we’re contributing to the airline.
You know, we work for a very strong brand and an airline that, you know, you may think doesn’t need a loyalty program because it attracts people, you know, totally by just the experience it’s offering.
So yeah, we, you know, we are a very successful program, but we need to be internally recognized as such as well, and so for us, the communication, you talk about communication to our members, the communication to internal stakeholders ensuring that everybody is aligned with what we’re trying to do and seeing value in what we’re doing, is important for us, as well.
So that’s something that the team continues to work on. Amazing. There are a lot of myths around loyalty programs that we need to dispel sometimes. And some of these need to be dispelled, you know, internally. So, yeah, I mean that’s, I guess, our job to go do and communicate as well.
Paula: Well, it’s kind of reassuring as well, Nejib, again, like looking from the outside, Emirates is such a beautiful brand, as you said, a beautiful experience that, you know, it might be easy to assume that you have a very easy role to play in terms of, you know, justifying the investment in Skywards and the rest of us are out defending our loyalty programs. But, you’re absolutely right. We have to continue to prove the value. So it’s good to hear that your team is no different.
My final question actually, I was just wondering how big is the team for Skywards? Just because there’s so much going on, there’s 13 million members, and of course, global as we’ve talked about. So just give us a sense of what do you have in terms of resources to manage all of this?
Dr Nejib: We kept the resources pretty steady. Of course, we lost some of our colleagues during COVID. We haven’t really ramped back, at the same levels. We were pre COVID. We’re around 100 professionals here at Skywards.
You know, of course we’re supported by our corporate communication, marketing and brand department for marketing. We’re supported by technology, the IT guys, et cetera. But pure Skyward as a core, it’s about 100 professionals working on this.
Some, you know yourself, Paula, you’ve met as well. But, you know, we’ve got of course, a good size partnership team that works with our financial partners, but also, you know, the expanding ecosystem of lifestyle partners as well. So, that’s pre considerable. We have the program and member engagement team as well that works on the design of things like Skywards Plus, Skywards Exclusives, and other products as well that we have.
And how we engage with our partners and building this emotional link that I’ve just talked about and ensuring that the touch points, whether it is service delivery at the, on board or at check-in or at call center is actually catering to our members in the right way and fashion. So they’re the ones who are ensuring that the service is delivered in the right way for our members.
So, and then, you know, I’ve got, you know, a team called Commercial Engagement. These are the people who work with the airline in terms of supporting the airline, ensuring that we have the right campaigns to drive commercial activity with the airline itself.
And of course, I think I shouldn’t forget, one of the most important teams is, what we call the strategic enablement office. It’s truly a team that manages all the initiatives that we have that are cross-functional initiatives.
Including, for example, the new loyalty platform. They interact with IT. They’re the ones who have the PMO. Which looks at all these initiatives ensures that we’re on track.
Paula: Incredible. Well, as always, Dr. Nejib, it has been a masterclass in loyalty and as my favorite loyalty program of course. It’s always a joy to hear what’s going on behind the scenes. So that’s all of my questions. Is there anything else you wanted to add for our audience before we wrap up?
Dr Nejib: No thanks, Paula, again, for the time you spend. And also, you know, I love these conversations. They’re very candid in nature. You know, I feel, you know, the, you know, because of that I need to open more and provide statistics that sometimes.
But as you mentioned, I think it’s important we’re all in the same family as loyalty professionals. And it’s good for us to just, you know, exchange, exchange information, and build on top of each other’s. Thanks. So thanks much for the time and, and hopefully I’ll get more for you in a few months down the road.
Paula: I will look forward to it. Dr. Nejib Ben-Khedher Head of Emirates Skywards. Thank you so much from Let’s Talk Loyalty.
Dr Nejib: Thanks Paula.
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 has already certified over 500 executives in 38 countries as certified loyalty marketing professionals.
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