Best of the Back Catalogue 2020: Paul Smitton on Asia Miles, Innovation & the Future of Airline Loyalty (#798)

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

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

Paula: So welcome to episode 65 of Let’s Talk Loyalty.

Paula: And today, I am delighted to be interviewing Paul Smitton, who is very well known, I think, all around the world in terms of his loyalty career.

Paula: Currently working as CEO of Asia Miles, based out of Hong Kong, but with an extraordinary career that we’re going to go through, which spans, I believe, in excess of 20 years.

Paula: So first and foremost, Paul Smitton, welcome to Let’s Talk Loyalty.

Paul: Thank you, Paula.

Paul: Happy to be your 65th guest on the show.

Paul: Well done.

Paula: Wonderful, thank you so much.

Paula: And for listeners, I should explain with the busy travel season, I hope, coming up for myself, if nobody else.

Paula: We’re recording, in fact, in middle of November to release in mid-December.

Paula: So by the time this goes out on air, we should probably be wishing people happy Christmas.

Paula: But anyway, I won’t get ahead of myself.

Paula: Great.

Paula: So Paul, first and foremost, as you know, we start every show really trying to understand from senior people into the industry, what is your favorite loyalty statistic?

Paul: Look, Paula, there’s so many.

Paul: I love some of the stats that come out of this industry.

Paul: It’s really, really fascinating.

Paul: Some of the engagement indicators that we get, some of the links between spend behavior and what goes on to happen in terms of future engagement, especially when they make or take a reward.

Paul: But there’s one stat that I just love.

Paul: And this goes back to many, many years ago, actually.

Paul: And one of the airlines that I worked with, we had this great stat very much from the very beginning, right when someone joined the program.

Paul: We used to ask a whole lot of interest data about customers.

Paul: And one of them was just a very simple question around when they travel, where do they like to sit?

Paul: And if they said window seat or aisle seat, it became this massive predictor of future behavior.

Paul: And so without any insight, any actual transaction behavior at all, we could predict what someone would go on and become with pretty high certainty.

Paul: It was sort of a ratio of two to one.

Paula: Wow.

Paul: And so no surprise when you really dig into it, it’s kind of pretty obvious actually with the benefit of hindsight, but people who say window seat tended to be leisure travelers.

Paul: And people who said aisle tended to be business travelers.

Paul: Now, there’s no sort of major rocket science behind that, but it’s basically a simple premise that business travelers want to sit at the front of the plane in an aisle seat and get off and get to their destination quickly.

Paula: Absolutely, yeah.

Paul: Wonderful stat from a loyalty program.

Paul: And if you didn’t ask that question, you wouldn’t know what that future will be like.

Paul: So just a fun little stat.

Paul: As I say, there’s so many stats.

Paul: I love it.

Paul: And I know, maybe just very quickly, there’s one, another one I really love, which is when customers get a reward quickly in a program, they tend to go on and be much, much more valuable in terms of future behavior, right?

Paul: They almost like get the concept, they exceed the value, and then they go on to become really loyal customers after that.

Paul: So I love, love things like that.

Paul: Yeah.

Paul: Often referred to as sort of a golden moment in a program.

Paula: Yeah.

Paul: And you get that early on.

Paul: So that’s a really neat moment in a program.

Paul: And it’s something that, as any program operator, you should always be looking for.

Paula: Yes.

Paul: And making sure that your program promise is being fulfilled.

Paula: Absolutely.

Paula: It’s a great one to start with, Paul.

Paula: And I think I said to you all fair the last time we spoke, actually.

Paula: I remember in my own British Airways days, we called it the Rocket Blues.

Paula: So it was just identifying that cohort, which really wasn’t getting the tier benefits or the recognition, but was on a trajectory that meant actually they should be really treated almost as a separate segment.

Paula: So I love that you identified it purely from the choice of seating because I remember when I went from that, just traveling back and forth, for example, to Dubai myself and wanting a window seat.

Paula: And then it was just like, I’m done with that now.

Paula: I just need to be able to get in and out of the bathroom.

Paul: Yes, exactly.

Paula: Great stuff.

Paula: Well, that’s a brilliant one to get started with Paul.

Paula: And actually, I also like your second one there about speed to reward.

Paula: And I was listing back to a couple of my old episodes myself recently.

Paula: And I also did an interview with the AA Advantage program.

Paula: And we were talking about KPIs.

Paula: And in fact, one of the key KPIs they do measure is speed of engagement.

Paula: From the moment of enrollment to the speed of engagement.

Paula: So I can hear that’s the same kind of insight that you’re focused on in terms of your perspective.

Paul: Yes, very much so.

Paul: It’s, you know, I think with any reward program that works well.

Paul: And there’s a lot of reward programs out there that I don’t think do a great job, right?

Paul: They sometimes keep on being disloyalty because they create a promise that doesn’t get fulfilled.

Paul: You know, end up doing more harm for the business than good.

Paul: So it’s really important that, you know, you see customers earning and getting rewards.

Paul: And the sooner that happens, the sooner they feel the benefit of participation.

Paula: Yeah.

Paul: That’s when you start to see a lot of magic happening.

Paul: So for me, you know, things like expiry is an important factor.

Paul: If that’s too high, that is an indication that you’ve got a low engagement program.

Paul: So I talked to a lot of other companies with their own programs, and they sometimes, they’re hooked on that drug of expiry.

Paul: And so that they’re really under investing in their proposition and they’re wondering why it’s not working.

Paula: Yeah.

Paul: When we talked to them about maybe joining the Asia Miles Coalition, you know, sometimes the cost can be a barrier.

Paul: They go, well, it’s costing me more.

Paul: And it’s like, well, that’s because we’re actually delivering on the reward promise.

Paula: Wow.

Paula: Yeah.

Paul: If we’re looking at it from a purely a cost perspective, you know, then you’re missing the point, right?

Paul: If you’re relying on high breakage models.

Paula: Yeah.

Paul: So that’s an interesting perspective on the program.

Paul: So you get what you sow.

Paula: Totally.

Paula: Yeah, it’s probably a pet peeve of mine, actually, Paul, you know, having gone into plenty of meetings where people are like, you know, convince me that I need a loyalty program.

Paula: I’m like, no, I think this is not the right question to start with.

Paula: This is not my job to convince you.

Paula: So yeah, and I like that you use the word drug, actually, Paul, because, you know, it really has to have the integrity.

Paula: And I’ve said this a hundred times on the show before.

Paula: And I can see actually a lot of the work you’ve done in terms of writing about loyalty and talking about loyalty really is showing up for the customer and making sure that they get to engage with you in the way that you’ve promised them to.

Paul: Yeah, absolutely.

Paul: If you think about a reward program, the whole concept of joining it is that you’re after a reward, right?

Paul: That’s the program promise.

Paul: Without laboring the point, if you’re not delivering on that, that’s the critical moment.

Paul: That’s the net promoter score moment where I’ve saved and saved and saved and now I’ve got something.

Paul: That’s when you either make them feel like their experience is better than their expectation or it’s worse.

Paul: Obviously, the behavioral aspect of getting the reward is one thing, but then the emotional side of it, the net promoter aspect, how do they feel now that they’ve done that?

Paul: Was it easy?

Paul: Did they get what they wanted first time?

Paul: All those considerations come into how the program actually delivers on that promise.

Paul: It’s the range of reward long did it take to get there.

Paul: All those things, and then accessibility, availability, all those things start coming into how people feel about the reward.

Paul: That then leads to ongoing future engagement, if you get that right.

Paula: Absolutely, yeah.

Paula: I don’t know about you, Paul, but my own sense is I almost, maybe it’s like having a child, you almost forget about the pain of the earning process, if the redemption process is good enough.

Paula: Because there’s where the long-term memory comes in, that’s where the joy comes from.

Paula: So, I think it’s perfectly fine to make people wait in terms of earning the reward.

Paula: Would you agree?

Paul: Yeah, there is.

Paul: Whilst I’m not gonna be able to rightly compare a childbirth to a childbirth, as an observer to childbirth.

Paul: Me too.

Paul: I can see that it is obviously a painful process, but then there’s a lot of enjoyment at the other end.

Paul: Yeah, so we won’t labor that analogy too far.

Paul: But yeah, look, it is a bit like that.

Paul: And actually, there’s a lot of research that says that if customers take a cash back type reward program, and they’re sort of just transacting, and then they’re getting a cash back at the till, whilst that’s attractive in terms of simplicity, ease of use, it doesn’t necessarily lead to better and longer term engagement.

Paul: So there’s something about saving and building up for a higher order goal.

Paul: And even if it ends up being a reward like a cash card or a voucher that you can use in a store, that’s all better than something that just happens as a get $1 off or $2 off a transaction as a sort of everyday.

Paul: One of the programs I worked with a grocery program a few years ago, they actively tried to discourage customers from taking the redemption at the checkout.

Paul: That was largely because they saw that the program customers ended up being less engaged and almost felt like some regret, buyer’s remorse having used the points in that way.

Paul: And so sometimes actually whilst it’s maybe a utilitarian, it looks like it should be a good thing and you ask customers and they go, would you like to be able to do this?

Paul: And they go, yeah, that’d be great.

Paula: Totally.

Paul: And the ability of what actually happens in terms of engagements is sometimes, that’s where I guess loyalty marketing professionals, we need to think about the balance between what the customer asks, what they think they want and what you think is best for them.

Paul: And so it’s often a balance between the two, right?

Paul: Is the right answer.

Paul: So you do want to make it easy, but I do know for a fact that if people save for something, it’s higher, you get a better return.

Paul: But obviously, you don’t want to just save for too long, right?

Paul: So that’s a whole sort of divisibility of the award as well.

Paul: If it’s going to take many, many years to get somewhere, then that’s going to lead to lack of engagement long term.

Paul: So I think there’s something around finding a sweet spot.

Paul: In the Asia Miles program, it’s typically almost two years that people build a balance, and they save up, and then they redeem, right?

Paula: Interesting.

Paula: Absolutely.

Paul: That’s not a bad timeframe for a holiday.

Paul: So getting away on a plane somewhere, that’s quite, quite cool.

Paul: We are looking at things that we recently launched back in January, kind of what we call a miles plus cash option as well, so custom, and they’re booking on Hong Kong Express, for example.

Paul: They can use their miles to part pay for a reward.

Paul: So things like that, that allows you to get there a bit quicker, and that’s not bad.

Paul: But again, it’s still saving up for and using.

Paul: Yeah, so I think that’s the sweet spot.

Paula: Yeah, love it.

Paula: Great.

Paula: And I think I mentioned at the start, you’re over 20 years in loyalty, but I think my maths is wrong.

Paula: I think it might be 30.

Paula: I don’t want to aid you, Paul.

Paula: But I saw a brilliant piece of history on your LinkedIn profile, which showed me that you joined Air New Zealand as a graduate trainee and did obviously a spectacular two years in that trainee role and were then promoted to Head of Loyalty for Air New Zealand, literally after straight from trainee.

Paula: I think it’s the biggest promotion I’ve ever heard of.

Paula: You’ve got to tell us the story.

Paul: Yeah, look, I liked the way you thought about it initially, Paul.

Paul: I think 20 years sounds much better.

Paul: You’re very old, but yeah, if I go back to that role, yeah, I did join Air New Zealand as a graduate trainee out of university.

Paul: And, you know, it was a trainee program.

Paul: It was all good fun.

Paul: And then one fine day, the Chief Commercial Officer at Air New Zealand, who was sort of my sponsor into the business, because I came from a commercial course.

Paul: And he said, look, I need someone to come in and help set up a loyalty program.

Paul: We haven’t got one.

Paul: Can you come and help me do this?

Paul: So it was kind of a pretty bit of a crazy thing.

Paul: And what they actually said to me was, we’ve just heard in the market that Qantas are about to launch their first loyalty program.

Paul: And we really don’t want to be in market without one.

Paul: So can you come and help do it?

Paul: And you need to do it in four weeks.

Paul: Oh, my word.

Paula: Wow.

Paul: So I remember at the time, obviously, it was pre-internet.

Paul: So it was pretty hard to do research.

Paul: And I was in New Zealand, so a long way from other programs.

Paul: And so I did a lot of research, pick brochures, things like that.

Paul: So actually, the old member guidebooks that used to be existed, printed books that talked about how to earn points, how to redeem, and all the terms and conditions that were produced.

Paul: So I managed to get a bunch of those.

Paul: The one that I ended up kind of modeling the program on was the Continental One Pass program, which Continental ended up being acquired by United, and the program merged into Minage Plus.

Paul: But going way back, that was the program that I sort of used as the model.

Paul: And because I only had those four weeks, I didn’t have time to do anything that you normally do.

Paul: No IT systems, no branding, no customer service stuff, no nothing.

Paul: So it ended up, we ran two weeks over the deadline.

Paul: And the program from nothing to launched in six weeks.

Paul: And so people talk about being agile and minimum life support as a sort of a new concept, but gee, that was that on steroids.

Paul: So the program was up and running and then off we went.

Paul: So I was lucky enough to really grow with it.

Paul: So I ended up hiring marketing teams, operations teams, IT teams, partnership teams, everything that you need.

Paul: And in the first 18 months, I was kind of doing very much an operational role during the day, being with customer issues, because you can imagine, we launched quite quickly.

Paula: Yeah.

Paul: There was no time to really get everything in place.

Paul: And then in the evenings, I was kind of catching up and doing all the other stuff.

Paul: So I was kind of doing 100 hours every week for about 18 months.

Paula: It was crazy.

Paula: Oh my goodness.

Paula: Wow.

Paul: Yeah, so it was good fun.

Paul: So baptism of fire.

Paul: When I started off not even knowing, I mean, I remember someone saying, we need an FFP.

Paul: And I was like, what’s that stand for?

Paula: Wow.

Paul: So it was quite interesting baptism.

Paul: And so, yeah, and then that really defined my whole career.

Paul: So really moment of luck in terms of that phone call from the chief commercial officer.

Paula: Wow.

Paul: Yeah.

Paul: So I could probably waffle on about that for a while.

Paul: That might be more podcast in itself because it was an incredible experience.

Paula: For sure.

Paula: I love it, Paul, though, I mean, there was obviously an aptitude that you had.

Paula: As you said, you were already in a commercial mindset, I suppose, from a university perspective, and to be able to come in and figure out even the operations.

Paula: And again, I’ve largely worked on the operational side of loyalty programs.

Paula: That in itself is extraordinarily challenging.

Paula: But to get to where you are today in terms of CEO of Asia Miles, and I know you have a very strong background in terms of understanding all the technology and all the customer insights.

Paula: So, extraordinary work going on with Asia Miles.

Paula: And you mentioned earlier a bit about the change in strategy for Asia Miles.

Paula: So, I think you’re moving away from the lifespan of Miles with Asia Miles and into more of an activity-based structure.

Paula: So, I’d love to hear a bit about that change you’ve made to the program.

Paul: Yeah, sure.

Paul: Look, up until the end of last year, the program rules were that we had a fixed life of a point.

Paul: From earning date to expiry date, it was three years.

Paul: So, from 1 January this year, all new miles that are earned are in an activity-based regime.

Paul: So, we have an 18-month rule.

Paul: So, as long as you maintain some sort of activity on your account in that 18-month period, then your miles keep active, right?

Paul: And so, that was a business case last year that we put together and then got it signed off and then did all the technology behind the scenes to get ready for it.

Paul: Launched it for 1 January.

Paul: So, actually, to be honest, it was a really good thing to have done because what it means now is that, you know, in the current environment, you know, people may be less flying activity.

Paul: Yeah.

Paul: To keep active in other ways.

Paula: Yeah.

Paul: That’s really cool.

Paul: And it was a personal bugbear of mine in that the program had that fixed life of a point.

Paula: Yeah.

Paul: I think activity-based is much more customer centric.

Paula: I agree.

Paul: You have people that are saving up for bigger rewards, maybe a trip of a lifetime type thing, and you can do that.

Paul: So I think that was really cool.

Paul: So yeah, that was a big change.

Paul: And luckily enough, we put that in, we got that business case signed off, and then COVID hit.

Paul: So it was quite good timing in a way.

Paul: There was a few other changes we made to the program, which also were quite good, well-timed as well.

Paul: So again, benefit of hindsight, we all came in pre-COVID, so that we put in the whole Adobe stack.

Paul: So we had all the full personalization, digitization around member engagements, whether it be Adobe Experience Manager, Adobe Campaign, Adobe Target, all those tools.

Paul: So it allowed us to be really targeted relevant to customers with their marketing messaging.

Paul: We also took the opportunity in the last year again to replace the e-commerce store.

Paul: So we had our old technology, we put in a leading edge piece of technology around SAP with hybrid.

Paul: And so again, put that in place, launched it last year.

Paul: There was a lot of changes in the last year.

Paul: Having that through this year has been really powerful because not as much flight redemption is happening.

Paul: So non-air redemption has become really important because people can use miles for, whether it was the iPhone 12 that was launched recently, that was a redemption item.

Paul: Sure.

Paul: Redeeming for first class wine, all sorts of stuff happening that if we didn’t have the promise and play, we wouldn’t have been in a great place in COVID.

Paul: So, yes, I wish it was sort of COVID planning, right?

Paul: But it was happened to be that we got them in pre-COVID, and then they’ve been really valuable in the last 10 months or so.

Paula: Yeah.

Paula: Well, thank goodness for that.

Paula: As you said, nobody can really have any foresight of something like this.

Paula: And even like I’ve spoken to a few friends of mine in the airline business around the world about business continuity planning, but it was always really, I suppose, from a safety point of view.

Paula: So as an airline, obviously, it’s core to the business and everyone thinks about it every day.

Paula: But I don’t think anyone in the industry had really planned for something that would ground the airline that wasn’t safety related in terms of the aircraft safety.

Paula: So yeah, from a loyalty perspective, nobody had thought about this kind of thing.

Paula: So I’m super happy that you had everything in place.

Paul: Yeah, it’s interesting.

Paul: We, as a loyalty business, separate to the airline business, we didn’t predict a global pandemic, right?

Paula: Yeah, yeah.

Paul: I’m not gonna say we were that clever.

Paul: Yeah.

Paul: But we did think about, we have our own risk plan.

Paul: We have, it’s quite separate to the airline.

Paula: Okay.

Paul: We ran, we’ve always run that for the last couple of years, at least in my tenure.

Paula: Yeah.

Paul: We get vulnerability and impact.

Paul: And so things like revenue concentration as a risk item was up for pre-COVID.

Paul: Like reward, range, it was up.

Paul: So how do we diversify?

Paul: So actually, so even though we didn’t predict the pandemic, some of the risks that we’d identified and the mitigation plans that we’d put in place meant that we were in a better place to deal with.

Paula: You had a plan.

Paul: Yeah, a plan.

Paul: So it wasn’t impossible.

Paula: Okay.

Paul: We also did quite a bit of, and we continue to do working with our PR agency, Crisis Handling.

Paul: So from a loyalty business perspective, and some of those things were more around, what happens if there’s a data breach?

Paul: How would we handle that?

Paul: Things like that, those sorts of things that are pretty obvious.

Paul: But then, they’re linked to, how do you give people confidence and make them feel that you can trust the currency and all that?

Paul: So some of the, I guess, risk planning and crisis handling kind of scenario planning we’ve done actually did help us quite well.

Paul: So in terms of communications, going into COVID, making sure members realize that, we’ve got this, it’s not, you don’t need to worry, you can keep redeeming, where you go, it’s all fine.

Paul: Play for the future, that’s fine.

Paul: You can use your miles now, that’s fine too.

Paul: And some airlines made the decision to say, let’s turn off the tap, stop redemption.

Paul: And what that does is just creates this negative energy and takes away the trust that members have.

Paul: And so when you break that trust, it’s very hard to get it back.

Paul: So we were very confident in our approach and made sure we gave members that confidence as well.

Paula: Yeah, we love it.

Paula: Yeah.

Paula: And actually there’s a quote that I saw in an article that you wrote Paul, which I’ll just mention for listeners.

Paula: And it was around this idea, loyalty isn’t dead, you just have to earn it, which I thought was lovely, especially in its simplicity, Paul, because there is a lot of concern, I think, particularly about different generations in terms of whether they want to engage.

Paula: But increasingly, what I’m hearing is, they just understand the game a lot better than we give them credit for.

Paula: So they know their data has value.

Paula: They’ve seen it with the social media giants.

Paula: So if you’re going to ask for their data now, what are you going to do with it and what’s in it for me?

Paul: Yeah, and I think that’s the same in any generation really.

Paul: But the younger generation probably get to the nub of the issue quite quickly and probably quicker to maybe to call bullshit on something if it’s not good.

Paula: Yeah.

Paul: Which is fine.

Paula: That’s assured, for sure.

Paul: Yes, I think that’s, for me, that’s what it comes down to.

Paul: So in the end of the day, is it a custom position that somebody can see value in?

Paul: If there’s a good value exchange, then fine.

Paul: Yeah.

Paul: If there’s not, then you got a problem, right?

Paul: It’s as simple as that.

Paul: So I think, actually, that test, right, is this something that looks and feels right?

Paul: If it does and you think, well, that’s a reasonable value exchange, then fine, it’s going to work.

Paul: If it smells funny and then you start as a team thinking, well, how do we package this?

Paul: You’re already able to lose, right?

Paul: Totally.

Paul: You got to make sure that the value is there.

Paul: And rewards programs, right?

Paul: That whole thing about loyalty is in debt and you have to earn it.

Paul: For me, it’s about trust, right?

Paul: You’ve just got to earn that over time every single day, right?

Paul: That’s what the program is all about.

Paul: How do you make the customer feel that this is an exchange that’s worth having?

Paul: And there’s some simple program constructs as well that come from that.

Paul: You’ve got to have desirable rewards.

Paul: You’ve got to better get those rewards in a reasonable time frame.

Paul: You’ve got to make it as pain-free and frictionless as possible when you get there.

Paul: So we’ve been doing things like, okay, people want to redeem online.

Paul: So how do we make sure the vast majority of them are online?

Paul: So we’re up to 90% now.

Paul: Ninety percent of our rewards are all redeemed online.

Paul: It’s a few complex ones where people have to contact the call center because of complex itineraries and things like that.

Paul: But generally speaking, it can all be done online and that’s what people want, listen to the message and use it.

Paula: Yeah, and actually I’m smiling here, Paul, because you reminded me of a moment yesterday outside of the airline industry, I will say, with my bank, which will remain eternally nameless because I tend to sometimes mention my frustrations with various banks.

Paula: But exactly to your point, my credit card entitles me to an airport transfer.

Paula: And for the life of me, I cannot find anyone to tell me how to book it.

Paula: Like honestly, I’ve been on the call center for an hour waiting to book.

Paula: So that’s not loyalty.

Paula: So I love that you have 90% online.

Paula: That’s brilliant.

Paul: Yeah, look, it’s funny, isn’t it?

Paul: You see these programs, right?

Paul: And they’re everywhere.

Paul: And some of them are just just dreadful.

Paul: And the benefits exist.

Paula: That’s the frustrating thing.

Paula: I know I’m entitled to it.

Paula: They know I’m entitled to it.

Paula: We just can’t seem to plug it together that they can tell me how to how to avail of it.

Paula: It’s ridiculous.

Paul: I had one similar, similar sort of vein where I’ve been upgraded to their top tier of this program.

Paul: Okay.

Paul: And I thought, okay, well, it’s interesting.

Paul: What do I get now?

Paul: I didn’t know what I got before.

Paul: And I discovered that there are four levels in this program.

Paul: And I won’t name them to protect the guilty.

Paul: But it was like, okay, great, four tiers.

Paul: I’m on the top tier.

Paul: What do I get?

Paul: And oh my goodness, it’s just this list of, get 10% off here.

Paul: You can download this app, show this thing, get this cut, get 10% off.

Paul: Is that what I get?

Paul: Is it the top platinum customer?

Paul: Like, come on, that’s not really worth it.

Paul: It’s a whole lot of effort for a very little benefit.

Paul: So, you’ll wonder why these programs aren’t driving engagement and driving loyalty.

Paula: So, yeah.

Paula: Exactly, exactly.

Paula: Some of the other fabulous stuff you’ve done, Paul, I know with Asia Miles is quite innovative.

Paula: And we talked about, for example, I know you’ve got a chat bot by the name of Samantha.

Paula: You’ve got some live chat functionality.

Paula: And I think you’re also exploring various, I suppose, interests that customers are coming through with in terms of wellness.

Paula: So, I’d love to just talk about beyond the basics, because just for listeners, I looked up some of your stats.

Paula: You have 12 million members.

Paula: Asia Miles has been running since 1999.

Paula: You have over 800 program partners, and a huge team running it.

Paula: So, plenty of scope to do a lot of exciting stuff.

Paula: So, I’d love to hear about any of it.

Paul: Wow.

Paul: Okay.

Paul: Big question.

Paul: Maybe I’ll start with Samantha.

Paula: Yes, tell us.

Paul: Since we’re at the first part.

Paul: So, Samantha or Sam, and not the most innovative name, but we sort of had service at Asia Miles.

Paul: Anyway, that was where that name came from, which is fine.

Paul: And so, she’s our first line of customer service.

Paula: Okay.

Paul: And so, some customers want to be able to just self-serve.

Paul: They just want to come on, ask a simple question, get the answer quickly, and still using that AI technology, she’s able to help find information for people quite quickly.

Paula: Okay.

Paul: And that’s been quite well received.

Paul: So, that was launched last year.

Paul: And so, that’s…

Paula: And can I clarify, sorry, Paul, is that for Asia Miles and it’s on WhatsApp, am I right?

Paul: So, that is on our website and app.

Paula: Okay.

Paula: So, you can…

Paul: It’s like a channel.

Paul: A live chat.

Paul: So, I sort of think about it like a pyramid, right?

Paul: So, we have that sort of self-serve, and then if you want to go to the next layer of customer contact, there’s something that I can’t find easily like that, you then have WhatsApp.

Paul: So, customers love, I don’t know about customers in Dubai, but certainly in Asia, people will go over WhatsApp.

Paula: Yeah.

Paul: It’s what they live in for most of their messaging.

Paul: And so, we now have that availability, so customers can contact us through WhatsApp.

Paul: We also have live chat, it’s the same sort of thing, it’s just a different channel using a technology that we have on our website and app, so customers go through live chat or WhatsApp.

Paul: So, we’re just trying to be agnostic that people interact with us.

Paul: Now, trying to solve for many things like that, and then if it’s an even more complex thing, then it can go to a physical call.

Paul: And typically, that’s the hardest stuff.

Paul: Like I said before, maybe a multi-destination stopover and I don’t know, things like that, a bit hard to do.

Paul: So try and free up our contact center agents to be able to spend time solving more complicated stuff and clear them up from the basic things.

Paul: And what’s great about live chat or WhatsApp is they can do multiple customer handling at once.

Paul: So it’s quite efficient as well, but customers like it as well.

Paul: So that’s going really well.

Paul: So that innovation which we brought in, which gone really well.

Paul: We’ve also done a lot of other things.

Paul: We’ve introduced blockchain in the program as a way of helping our some of our smaller partners interact with the program and get miles into customer’s accounts more quickly.

Paul: Being quite successful and making the miles more easily to earn.

Paul: So it’s not Bitcoin, that’s blockchain.

Paul: Okay.

Paula: Yes.

Paula: Very important distinction.

Paula: Thank you.

Paul: Yes.

Paul: More just a back end processing tool to make things quicker, more secure, more efficient.

Paul: Yeah.

Paul: So things like that.

Paul: You mentioned wellness as well.

Paul: That’s something that we’re seeing more and more of people wanting to earn files for wellness-related activities.

Paul: So that’s something that we’re…

Paul: Actually, it’s a bit of a work in progress.

Paul: We’ve got a number of partners in the program already, and we’ve sort of positioned them and packaged them so that customers can see those.

Paula: Great.

Paul: And that’s whether it’s health insurance or partners like Green.

Paul: There’s a company called Green Common in Hong Kong, which are trying to get people to move from meat replacement to vegetable protein-based product.

Paul: So we’re promoting things like that.

Paul: Really good for society, but also good for members.

Paul: We also have things like, you can earn miles for green electricity.

Paul: So the sort of general categories, which is sort of trying to build out.

Paul: We will have more.

Paul: So the plan is next year.

Paul: It’s kind of a worthless space, but we’re going to double down on that wellness category.

Paul: So we’re almost certainly going to, if you look at some of the good examples around the world, and they might, there’ll be no surprise, but things like discovery with vitality in South Africa and other markets around the world.

Paul: But it also, before I joined Asia Miles, I was with Qantas.

Paul: And so wellness was a big play at Qantas.

Paul: So look, there’s a few things that are coming next year in that space, which will make it even more interesting.

Paula: Wonderful.

Paul: So can’t reveal too much yet.

Paul: We’re not ready to launch it.

Paula: Yeah.

Paul: It’s a bit of a sneak preview.

Paula: Yeah, love it.

Paula: Yeah.

Paula: And it’s perfectly though aligned, Paul, in terms of the zeitgeist at the moment.

Paula: So I’d be surprised if you weren’t thinking along those lines almost.

Paula: But to go back to what you told us about just at the start of your answer there, Paul, the WhatsApp piece I totally love, because yes, I find live chat very efficient most of the time myself in terms of engaging.

Paula: But actually WhatsApp is just where I live in terms of my communications and I trust it.

Paula: And I know it’s been used very successfully actually by airlines over the last number of years.

Paula: And I really feel it’s amazing to see that you guys are leveraging it for that customer service stuff.

Paula: So I just want to acknowledge the innovation and just kind of blazing a trail for customers, because to me, that’s true customer centricity.

Paula: Like, you know, the whole piece around, whether it’s powered by AI or the blockchain piece that you talked about for merchants, you know, they all sound super, but they don’t impact me and I don’t feel or see the benefit.

Paula: But yeah, I love the WhatsApp piece.

Paul: Yeah, it’s great.

Paul: And you got, as you know, right, you have that history as well.

Paul: Yeah.

Paul: It’s kind of, the history is there for the issue, but then it’s gone.

Paula: Yeah.

Paul: Whereas you’ve kind of had that history with the customer too.

Paul: So it’s good.

Paula: Yeah.

Paul: It’s just easy, right?

Paul: It’s interesting, actually.

Paul: The other innovation I would mention as well is when we shut down and all started working from home early this year, within the team, we were like, okay, great, contingency planning, how do we do this?

Paul: Luckily, pretty much everybody was already on laptop, so they were all fine.

Paul: There was a few people that didn’t, very small number, some of the finance team, for example, some of the admin team.

Paul: So we very quickly got them laptops as well.

Paul: So they were up and running.

Paul: But we were able to work with some of the digital tools.

Paul: And so in our case, it was Microsoft Teams.

Paul: And so as an organization, we already had the license, but it was one of those things that was sort of sitting on our laptops, but not really being actively used.

Paul: But then working from home, all of a sudden that suddenly became a really powerful tool.

Paul: What’s happened, if I’m perfectly honest, I’d love to say it was all by design.

Paul: But it was more a beautiful accident in that we found that we’ve now moved off Outlook as our sort of primary tool to Microsoft Teams base.

Paul: So there’s lots and lots of team groups for sharing information.

Paul: There’s team chats set up for different projects.

Paul: We use Microsoft Project extensively, so we have…

Paul: For tracking projects.

Paul: So we see all these, you know, cards for everything and all the different owners are able to manage those different things.

Paul: And so for information sharing, agility, it’s great.

Paul: So we’ve…

Paul: There’s another thing that we’ve found from an innovation perspective.

Paul: It’s almost like redesigned the way we work.

Paul: So it doesn’t matter where you are, whether you’re at work, home, a coffee shop, whatever floats your boat.

Paul: You can get stuff done.

Paul: And that’s been great.

Paul: So really, really neat.

Paul: Happy accident, as I say, because of the environment we’ve found ourselves in.

Paul: So we’re mostly back at work now, but again, there’s no pressure to be in the office.

Paul: If you’re in the office, it’s fine.

Paul: If you’re not, it doesn’t matter.

Paul: So I think it’s been good.

Paul: Getting more stuff done more quickly.

Paula: Yeah, absolutely.

Paula: Yeah, as I’ve said once before, never waste a good pandemic.

Paula: So, you know, I shouldn’t make light of it.

Paula: But, you know, you described yourself before we came on air as a glass half full kind of person.

Paula: And I like to consider myself the same.

Paula: So there are improved behaviors in so many areas of life, despite the trauma, obviously, and the difficult times we’re going through.

Paula: So it’s amazing to hear that level of agility coming through.

Paula: So well done, you.

Paul: Yeah, it’s funny, there’s that in the never waste a good crisis is, I mean, it’s, as you say, we don’t want to make light of the situation in China is a concept called YG, which is this character that means, yes, become come to mean, you know, crisis and opportunity all in one.

Paula: There you go.

Paul: That’s, that’s, I think, part of the Chinese culture as well, which is, you know, let’s figure out how do we make, take the opportunity to present it as well.

Paula: Wonderful.

Paula: Wonderful.

Paula: Well, listen, I have one more question, Paul, and it’s actually just again, something I saw you kind of talking about, about an online community.

Paula: I think you have about 6,000 members.

Paula: And you used a term which I thought was fantastic.

Paula: This is one of your LinkedIn articles where you described today’s choice rich world, which I just thought was a very succinct way of describing, particularly, I suppose, loyalty airlines particularly, and obviously what Asia Miles is, is differentiating.

Paula: So I’d love to just understand how that community works.

Paula: And, you know, is it something that you use on an ongoing basis or tactically or, or any insights you can share with me on that side of things?

Paul: Yes, certainly, Paula.

Paul: It’s, you know, it’s a big part of how we, how we roll.

Paul: So we, I can’t claim credit for it, but my predecessor was a massive fan of design thinking.

Paul: Okay.

Paul: So, you know, one of the leading exponents of that, in that space in, in Asia.

Paul: And so, you know, a lot of the team trained up on the, the d.school methodologies at Stanford.

Paul: So, you know, a big part of how we, how we roll is, is design thinking.

Paul: So how might we change something?

Paul: That’s sort of how might we question if you’ve ever had any design thinking exposure.

Paul: But yeah, so having a customer panel is a really powerful tool that the team have in thinking about changes.

Paul: So they are able to engage with the customer panel.

Paul: They’re very much a, you know, on tap resource.

Paul: You know, they’re part of our, our team.

Paul: Okay.

Paul: So if you think about this, it’s like super users, people who understand the program, value it.

Paul: So we can go to that group, test ideas, find out what’s working well, what’s not working well.

Paul: And that to, you know, be a source for new ideas, understand issues, test new ideas before they go out.

Paul: And that’s, that’s a big part of it.

Paul: So that, yeah, look, it’s a, it’s a great thing.

Paul: Every now and then they come, we get people into the office as well.

Paul: To, as a part of that group, talk to them.

Paul: Yeah, so it’s, yeah, really, really useful.

Paul: Because obviously, I talk about loyalty, not just being about behavioral loyalty.

Paul: It’s emotional loyalty.

Paula: Totally, yeah.

Paul: We need to know, you know, they might be frequently engaging, so they’re behaviorally loyal.

Paul: Are they emotionally loyal?

Paul: Are they going to be the kind of customer that sticks around for the long term?

Paul: And that’s where that sort of choice rich world, where people are able to shop around, choose different things all the time.

Paul: Well, what’s going to make them feel a little bit better about you?

Paul: And I’m not naive enough to think that they’re going to be, suddenly give us everything all the time.

Paul: It’s all about just moving the dial, getting more engagement and just building that over time so that they do feel more connected to you.

Paul: And it’s going to be good for the customer and good for you as a business.

Paul: That’s where it all comes together.

Paula: Yeah, it’s a great point Paul, because yes, I might behave in a loyal way, but it might be because there is no other airline, for example, traveling to where I want to go.

Paula: So that is definitely not the point of what we’re aiming to achieve.

Paula: So I love that distinction.

Paula: It’s a really good one.

Paul: Yeah, definitely.

Paul: And for us too, we’ve got 800 program partners, we touched on that before, 12 million.

Paul: That engagement beyond the flying transaction, how do we make sure the currency is relevant, both for the partners, but also for the members?

Paul: And so how do we extend into other sectors?

Paul: So we’ve done that very successfully in financial services, credit cards, banking, insurance, and also into retail, dining, those sort of categories.

Paul: How do we also understand what’s important in those other sectors?

Paul: So there’s a little complexity because you need to, it’s not just travel, it’s other sectors as well.

Paul: I can’t assume what works and travel is gonna work in another sector.

Paul: That’s the reason why you need that panel to do that.

Paul: So yeah, we’ve done things like, we had an integration with the leading table reservation service in Hong Kong, a company called Open Rice.

Paul: And so now we’re able to account bind your Asia Miles account to your Open Rice account.

Paul: And so you earn Asia Miles for each booking of a table.

Paul: It’s also a partner restaurant.

Paul: You can earn miles directly from the partner restaurant.

Paul: And if you work hard, you can earn on that as well.

Paul: So there’s three ways.

Paula: Triple dipping.

Paul: Yeah.

Paula: Yeah.

Paul: And so talking to customers, trying to understand pain points around dining and then building a UI UX framework that’s going to solve that pain point is the panel is invaluable.

Paula: Yeah, absolutely.

Paula: And again, to your point earlier, particularly in a year like 2020, when the travel behavior is just impacted, it really does give a unique way for people to stay connected to Asia Miles.

Paul: Absolutely.

Paula: Wonderful.

Paula: Brilliant.

Paula: Well, listen, Paul, I have asked everything that I’ve been dying to ask you.

Paula: Have you any final closing points from your side before we wrap up?

Paul: No, not really, Paula.

Paul: Look, it’s really fascinating.

Paul: I love talking to someone who gets loyalty.

Paul: It’s really neat.

Paul: And obviously, it’s a tough time.

Paul: And what we’re seeing as well is that the currency is still as attractive as ever.

Paul: Members love to collect them, the miles.

Paul: I also think there’s going to be a real dam burst of demand for travel.

Paul: I think we’re all, whilst it’s like Zoom, we’re having this chat on Zoom.

Paul: It’s fine.

Paul: Nothing beats having a chat face to face.

Paul: And so I think customers are looking forward to doing business face to face, taking holidays face to face, seeing friends face to face.

Paul: So I think what we are going to see is that there will be a real dam burst.

Paul: And actually, it’s interesting, in China, we’ve seen this real thing, this concept of revenge spend.

Paul: People rushing back into shopping malls to spend money.

Paul: The MS boutique in China, in Guangzhou, recently, when it reopened after being closed for a few months, sold 2.7 million US dollars worth of handbags in one day.

Paul: That was a record for that shop.

Paul: Wow.

Paul: So that hunger to get out spend is there.

Paul: Totally.

Paul: Research says people want to come back.

Paul: So we’re excited about just keeping on the maintaining engagement.

Paul: Being there when customers want to start traveling again.

Paula: Wonderful.

Paula: Well, listen, I certainly can’t wait myself, Paul.

Paula: I think we both share a love of travel as well as a love of loyalty.

Paula: So I just want to really say thank you so much for your time today.

Paula: Paul Smitton, CEO of Asia Miles.

Paula: Thank you so much from Let’s Talk Loyalty.

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