#254: Loyalty Innovation in the Railway Industry

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

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

PAULA: This show is brought to you by the Loyalty and Awards Conference.

PAULA: The leading annual event for loyalty professionals in the travel industry.

PAULA: Make sure to join us this year from the 10th to the 12th of October in Madrid for the perfect mix of inspiring content and exciting awards.

PAULA: Check out loyaltyanowards.com for more information and to register.

PAULA: Hello, and welcome to an episode of Let’s Talk Loyalty, where we’re discussing loyalty for the first time in the railway industry.

PAULA: Ahead of the Loyalty and Awards Conference in Madrid in October this year, I met with Javier Marin Martinon, one of the keynote speakers, to learn all about his role as chief commercial, loyalty and customer officer for Renfe trains.

PAULA: Renfe is the leading train company in Spain, a company that’s already over 80 years old and now operates the world’s second largest network of high-speed trains after China.

PAULA: Carrying over 500 million passengers a year, Javier explained some of the challenges facing the business for the very first time with increasing competition, not only from cars and flights as in the past, but now also from two new rail operators.

PAULA: Javier shared some effective ideas that Renfe has already launched from members of its loyalty program.

PAULA: Designed to be simple and exciting to understand, even when they are sometimes quite difficult behind the scenes to deliver.

PAULA: I hope you enjoy listening to my conversation with Javier all about driving loyalty and increased rail travel for Renfe.

PAULA: So Javier, welcome to Let’s Talk Loyalty.

JAVIER: Hello Paula, very nice to be with you today.

PAULA: Yes, I know you’ve been listening to my show a few times as well Javier, haven’t you?

JAVIER: Yes, I have to say that I’m listening to your podcast almost every weekend.

JAVIER: This is the day that I’m using to do some exercise and to do some things, cooking or whatever.

JAVIER: And while I’m doing so, I’m trying to listen to something on podcast.

PAULA: Oh, thank you for listening.

PAULA: And you’re absolutely right.

PAULA: I think what I like about this format from my own perspective is it’s nice and passive.

PAULA: So I can do two things at one time.

PAULA: I feel very efficient.

PAULA: I feel like I’m learning and cooking or cleaning or whatever at the same time.

PAULA: So thank you for that.

PAULA: So I’m super excited to hear all about Renfe.

PAULA: I am actually very passionate about trains in general, and I keep looking for the longest train journeys I could possibly book myself on to.

PAULA: So I have to confess, I haven’t done too much as yet, but I know there’s some extraordinary work that you’re doing there in the Spanish market, and there’s lots of change going on as well.

PAULA: So we’re going to talk about the role of loyalty, I guess, in trains for the first time.

PAULA: So very exciting from my side.

PAULA: So to kick us off, Javier, as you know, we always start by asking about a favorite loyalty program.

PAULA: And I think you mentioned you might have two favorite loyalty programs you’re going to tell us about today, yeah?

JAVIER: Yeah, that’s right.

JAVIER: Two very different loyalty programs.

JAVIER: Both of them, I’m using them a lot, I would say.

JAVIER: One of them is Amazon Prime.

JAVIER: I mean, because at least, well, probably this is the one I use more.

JAVIER: And I believe that this program was very disruptive at some time, as a paid loyalty program.

JAVIER: And also it’s value for money.

JAVIER: It’s really high.

JAVIER: And as a consumer, a member of this program, I feel that it pushed me somehow to buy more at Amazon instead of in other retailers.

JAVIER: And I still feel that the value for money is quite good.

JAVIER: Even they are increasing the fare every year.

JAVIER: So this could be the first of the programs.

JAVIER: And then the second one, which is completely different, could be the Carrefour Club in Spain.

JAVIER: This is one of the biggest retailers in Spain.

JAVIER: And this is a very traditional loyalty program with cash back in every purchase.

JAVIER: But the way that they are taking care of every communication to the members.

JAVIER: They are trying to create or to build a community with their members.

JAVIER: They have already 8 million members in Spain.

JAVIER: And we have to take account that Spain has around 50 million inhabitants.

JAVIER: So there is a huge percentage of people in Spain using this program.

JAVIER: But it’s like a very familiar, a very close program to everybody.

JAVIER: So both of them would be my favorite ones.

PAULA: Yeah, both excellent examples, Javier.

PAULA: Certainly Amazon Prime has been mentioned before.

PAULA: I think we’re all very comfortable when the small monthly fee comes out.

PAULA: And yeah, it’s funny because I do remember the first time I was thinking about all of this recurring revenue and how incredible it was, what they had managed to convince everybody to pay this monthly fee.

PAULA: And in my initial thinking, and you’ll appreciate this as a commercial officer, the first thing that occurred to me was this was all new revenue.

PAULA: But actually I did read that, of course, Amazon used to charge very high shipping fees for every single individual parcel.

PAULA: So, in fact, the reality, I believe, is that they gave up a lot more revenue initially and replaced it with this kind of fixed monthly fee.

PAULA: But obviously the commercial rationale is that increased spend in terms of much more frequency of purchase.

PAULA: So every single product now, like I don’t know about you, but for me, I might only need an ink cartridge today.

PAULA: And before, I might have waited to go and order later together or something.

PAULA: Now, every single thing I need, I just immediately order it.

PAULA: It’s with me the next day, probably.

PAULA: And yeah, it’s incredibly efficient and powerful.

JAVIER: And the mindset of the consumer, for example, when you are asking for some product, the free shipping is really convenient because otherwise, in case of being paying, I don’t know, five or six euros, which is, well, it’s not so high, but it’s like more convenient to pay a fixed amount and not to have to pay in each and every order.

PAULA: Yeah, for sure.

PAULA: And I also believe from, I suppose, a psychology point of view, particularly in times of, let’s say, you know, recession or global crisis, you know, something that’s predictable, the customers, I think, really value it a lot more because, you know, it’s something we feel we have a little bit more control over, perhaps, than we wouldn’t normally have.

JAVIER: Yeah, sure, for sure.

JAVIER: I mean, and also because, well, when you are considering to buy something, as you have already paid for this loyalty, so if you have to pay one, two euros more or whatever it is, it makes sense because you are already paying for the membership.

PAULA: Yeah, super powerful.

PAULA: Yeah.

PAULA: And the other one, Carrefour, absolutely sounds like a really, really well executed program as well, Javier.

PAULA: So we’ll have to try and get them on Let’s Talk Loyalty at some point.

PAULA: We haven’t spoken to Carrefour in the past, but listen, let’s move on to the train industry.

PAULA: I know it’s something that is also fairly new for you.

PAULA: I did see a very strong background in management consulting and the cruise industry.

PAULA: Another one, of course, very close to my heart as somebody who loves to travel.

PAULA: But I think you’re fairly new to take on direct responsibility for a loyalty program, am I right?

JAVIER: Yes, I was for 20 years working, as you said, in management consultancy and also in the cruise industry.

JAVIER: And just in January 2021, I joined Renfe, which is the main rail operator in Spain.

JAVIER: And I’m trying to learn every day something new about the rail industry.

JAVIER: And there’s a lot of things in, well, and a lot of history in this company that already has 80 years.

PAULA: Wow, OK, a lot of history and legacy and nostalgia.

PAULA: So what is the journey with Loyalty then for Renfe?

PAULA: I mean, has it been around for a long time?

PAULA: Tell us a little bit about the program and its evolution so far.

JAVIER: Yeah, well, the origins of, I could say that the Loyalty in our company probably would be in 20, 25 years ago, when someone decided to do a paid Loyalty program.

JAVIER: Wow, amazing.

JAVIER: Yeah, it was a car called Golden Car, and it is for senior people, and you are paying an annual fee, and you will get 25% discount.

JAVIER: So they were paying in advance for this discount.

JAVIER: So what they were doing, well, it was in every trip they were planning.

JAVIER: Always the train was in the top of their mind, because they have already paid for this program.

JAVIER: And this is very powerful for us.

JAVIER: We have around 2 million people now already with this program, paying for it.

JAVIER: And then we did the same with the young people up to 25 years old.

JAVIER: They were able also to pay for annual fee of 50 euros, and they will get a 30% discount in each and every trip.

JAVIER: So it was very convenient.

JAVIER: And then some years later, I will say, well, around 10 years ago, well, no, actually, 15 years ago, they started with a small loyalty program when Spain launched the first high-speed train in 1992.

JAVIER: So 30 years ago.

JAVIER: And now 30 years later, we have the second largest high-speed network in the world, just behind China.

JAVIER: Yeah, it’s very convenient in Spain, because in every city, almost every destination is connected in less than two and a half hours from Madrid.

JAVIER: So it’s very nice, and you can go in a train by 300 kilometers per hour.

JAVIER: It is more or less 186 miles per hour.

JAVIER: So at some point, with this high-speed train, well, we started a program only for this high-speed train called AVE in Spain, which means High-Speed Train of Spain.

JAVIER: And well, it was increasing and increasing, and it started to be applied to the rest of the…

JAVIER: to the trains that we are operating.

JAVIER: And well, it was used, but as we were the only rail operators, I mean, we were not very, very active trying to promote it, and well, it was more reactive marketing using it.

JAVIER: And now since last year, we are facing a completely new scenario.

JAVIER: So we are facing a new scenario in Spain when we have more operators of the rail industry, we have competitors now.

JAVIER: So as it happened 50 years ago in the airline industry in the US, we are facing the same situation and we are using the same levers that somebody took 50 years ago in the US.

JAVIER: We are using the loyalty program as a key pillar or key lever for competing and for making the travelers to stay with us and to travel with us instead of any other option.

PAULA: Yeah, I was going to say, and I was just as you were explaining that Javier, thank you very much for the explanation.

PAULA: You’re absolutely right.

PAULA: The industry clearly is being disrupted there in terms of the amount of train competition that’s going to come through.

PAULA: But I guess you do already compete with other forms of transport first and foremost.

PAULA: Cars are probably the first one that you have to compete against on a regular basis, maybe for intercity travel, I guess airlines then.

PAULA: I said to you before we came on air, I’m hoping to get to Amsterdam on the way to the Loyalty and Awards Conference in Madrid.

PAULA: And I would love to go by train if I could do it.

PAULA: It seems in that situation, I might have to fly.

PAULA: But it is definitely a big challenge to convince people, I think, to take the train sometimes, you know, when they often have their own car and that’s sometimes just the default behavior.

PAULA: Is that fair to say in Spain?

JAVIER: Yes, I will say that you are completely right.

JAVIER: I mean, for sure, we were competing with other types of transports.

JAVIER: Well, private car is the most popular, of course.

PAULA: Yeah.

JAVIER: And well, we are trying to get more people on trains because of a lot of things.

JAVIER: Also because of sustainability, because well, we are the most sustainable way of transport.

JAVIER: And then also then with buses and airlines.

JAVIER: But with airlines, probably we were competing at some point, but then in those routes that we are competing with an airline, we are taking probably 70% of passenger share.

JAVIER: So we are more powerful than airlines in the domestic routes.

JAVIER: So what we are doing is, well, they are competitors for sure, but they are also partners.

JAVIER: So for example, if you want to travel from Amsterdam to Malaga or to Sevilla or to Valencia, you can use a product that we are launching now with Iberia, for example, with the main airline in Spain.

JAVIER: You can take the flight from Amsterdam to Madrid and then the train from Madrid to another city.

JAVIER: And it’s only one ticket.

JAVIER: It’s only one travel experience.

JAVIER: We have a partnership to increase the mobility of the people.

JAVIER: And we are doing the short haul or the domestic trips, and they are doing the long haul trips.

PAULA: Lovely, lovely.

PAULA: And I loved the point about sustainability as well, Javier, because I think you told me that all of your trains are actually electric trains, yeah?

JAVIER: Yes, our high-speed trains, they are electric trains.

JAVIER: We are using 100% renewable energy.

JAVIER: So Renfe is the first consumer in Spain of electricity.

JAVIER: And we are saving millions of tons in CO2.

JAVIER: We are the equivalent to 15 million inhabitants of what 15 million inhabitants are producing in CO2.

JAVIER: So this is very nice.

JAVIER: And in this time that most of us, we are trying to reduce our footprint and trying to help others.

JAVIER: Well, this is a very good point for everybody.

PAULA: Definitely.

PAULA: And you quoted some wonderful numbers as well, Javier.

PAULA: I’d love you to share them with the audience.

PAULA: I suppose on both sides, first of all, your passenger numbers on an annual basis is incredibly impressive.

PAULA: And then I know you’ve been in this loyalty role as Chief Commercial Officer for I think it’s just over a year now, as you said, since early 2021.

PAULA: And you’ve managed to grow the loyalty base significantly as well in that time.

PAULA: So maybe, Chair, just give us a sense of the scale of the business and the program.

JAVIER: Yes.

JAVIER: Well, the business is really high.

JAVIER: I mean, I was amazed when I was seeing the data because we are moving every year before the pandemic.

JAVIER: In 2019, for example, we were moving in all the Renfe trains, more than 500 million passengers.

JAVIER: So that is a lot of passengers.

JAVIER: For sure, in this figure, we are including the commuters, and if we are taking out the commuters, we are moving around 55 million passengers every year.

JAVIER: So with this number of passengers, the opportunity is great for us because we have a huge opportunity to make these people to be part of our program and to increase our database.

JAVIER: So this is something that we were doing since the first day, and the first goal for me in this program was, well, let’s capture every passenger, every traveler that we have with us.

JAVIER: Let’s make him or her part of our community, our family of Más Renfe.

JAVIER: So we are having now, well, since, I would say in the last 12 months, we have increased around 800,000 members in this program.

JAVIER: Okay, so this is a huge figure.

JAVIER: And this is very great because, well, we are seeing that we are increasing every month our database or our community with five times more people that we used to have in the previous months of some changes in communication and in the program that we were carrying out.

JAVIER: And also because, well, this is normal because in some months ago we were under the pandemic.

JAVIER: But it means also three times more than what we used to have before the pandemic.

JAVIER: So, well, people are joining the program, which is great.

PAULA: Yes, well done.

JAVIER: And then we have the next challenges that is where we have to engage them in our program as well.

PAULA: Yeah, so I think you said about two and a half million members now in the program, yeah?

JAVIER: Yeah, we are aware of it.

JAVIER: Yeah.

JAVIER: Yeah, so that’s very nice.

PAULA: Yeah, super exciting.

PAULA: Yeah.

PAULA: So two and a half million members.

PAULA: And you also have the paid program as well, as you mentioned, Javier, yes?

JAVIER: Yes, we have both.

JAVIER: Yeah, with two million, one of them.

JAVIER: The other one is less popular, let’s say.

PAULA: Okay.

JAVIER: But so we have.

JAVIER: They are not only in one program because they can share both programs.

PAULA: Okay.

JAVIER: Yeah.

PAULA: And tell me, is it a program like is it would you say it’s digitally led or is it more traditional in terms of a card based approach?

PAULA: And just love to get a sense of what the expectations are of Spanish consumers and passengers.

JAVIER: Yeah, well, we used to be not a digital problem, and now we are moving to a digital program.

PAULA: Okay.

JAVIER: But we are mixing both approaches because for sure we all the purchases and activities can be done online.

JAVIER: There is a physical card for those who wants to have a physical card, but most of our community are using the passbook to have their card and to use them.

JAVIER: Most of our communications are online, but then we are trying not to lose the offline.

JAVIER: Okay, so we are trying to start some actions, take it advantage that when some people is using our services, probably he or she is going to be with us one hour and a half or two hours and a half.

JAVIER: So we can mix both activities.

JAVIER: So I would say that it’s a hybrid model, which is very popular, the hybrid models in all the jobs.

JAVIER: So this is a hybrid model as well.

PAULA: Yeah, yeah.

PAULA: No, you’re absolutely right.

PAULA: So it sounds like there’s maybe membership forms on board the trains, is there, in order to encourage people when they have maybe a bit of downtime and maybe they’ll register when they’re traveling, is it?

JAVIER: Yes.

JAVIER: Well, yes.

JAVIER: Something that we were doing is to communicate in every step of the customer journey to those people that they were traveling with us and they were not part of our program, the benefits of the program and the simplicity of being part of the program.

JAVIER: So we are increasing these points.

PAULA: Okay.

JAVIER: And then let’s say that, for example, for some actions that we are planning for some special dates, that our crew on board will help us to make some activities to surprise our travelers, our customers, and to make something that, well, probably in some special dates, they are waiting for some online messages.

JAVIER: But let’s try to do something offline as well.

PAULA: In terms of rewards and recognition for the members?

JAVIER: Or emotional communications.

PAULA: Can you give us an example of what you’re thinking?

JAVIER: Well, for example, something that we are launching right now is that, well, when it’s your birthday, okay?

PAULA: Yeah.

JAVIER: Well, normally, you will receive on your email some days before some gift for you in terms of points or rewards or whatever.

JAVIER: But if you are traveling with us in some of our trains, well, maybe we will give you in person a gift, okay?

JAVIER: So it’s not going to be a very special gift, only a detail, okay?

JAVIER: But we want them to know that we are taking care of them, and we are very happy to share that special day with us.

JAVIER: And this is something that we want to start to increase and to mix both approaches, the physical and the online.

PAULA: That sounds very operationally challenging, Javier, because…

JAVIER: Yeah, it is.

PAULA: I’m thinking about, you know, I don’t think I’ve ever flown on my birthday, for example.

PAULA: So I’m not necessarily aware what the airlines, if they do anything, for example, if they know that it’s actually your birthday, maybe for the top, top, top tier, perhaps that I’m not a member of, maybe it happens there.

PAULA: But it sounds like you’re actually proactively looking for that data, looking for people traveling on the day, is that you’re saying?

PAULA: Yeah.

PAULA: Yeah.

PAULA: Exactly.

JAVIER: Yeah.

JAVIER: So as you say, this is very challenging in terms of operation, but this is something that I really believe that this will be a wow moment.

PAULA: Yeah.

JAVIER: The cost itself is not going to be very super high.

JAVIER: So it’s more emotional than the investment itself.

PAULA: It’s very powerful.

PAULA: And I think you’ve used the right word, Javier.

PAULA: I think it is a wow because it does require, you know, you or, you know, whoever is doing this thinking, I’m guessing it is you, to literally have that intention to look for the data, find the opportunity to wow the customer, build the operational solution around it, and then execute.

PAULA: And I think, you know, consumers are pretty savvy these days, and they realize that that’s actually very complex to do at such scale, you know, with, what did we say, two and a half million members and 500 million passenger journeys, you know, to actually marry up the two pieces of data and deliver something in the moment is super impressive.

JAVIER: It is taking some time to prepare and to develop the action, so it’s not easy, but this is one of these actions, and then we will try to do some next steps and something new.

PAULA: Yeah, of course.

PAULA: So what other rewards, then, is part of the Renfe program, Javier, for, you know, I guess it’s an earn and burn proposition.

PAULA: Is this with a miles or a points currency?

JAVIER: Yes, this is, well, the origin of the program is earn and burn points.

JAVIER: So it’s a classical program in the travel industry, I would say.

JAVIER: And then, of course, we are trying to give some benefits in each step of the journey, let’s say.

JAVIER: So we are giving, depending on the tier, some benefits like the free parking in the training stations, like access to the VIP lounges in the stations as well.

JAVIER: Some free upgrades as well.

JAVIER: Some free tickets for them, or just to have the chance to provide a card with one of the upper tiers to another person, if, for example, you are a platinum or gold member with us.

JAVIER: So this is some of the points that we are trying to facilitate.

JAVIER: And then from this point, we are trying to increase and to extend the benefits to other parts of the journey, let’s say, or the trip.

JAVIER: So not just in the train, but also in some other points of their experience.

PAULA: Can you give us an example of that one?

JAVIER: Yes, for example, this is something that, well, as I was saying before, the first step with our program was to enhance the people to be a member of the program.

JAVIER: Then the next step is to engage people for being a member of our program.

JAVIER: So we were already finding all the benefits, and those were part of our benefits.

JAVIER: And now, as I was saying, we are extending them to other parts of the trip.

JAVIER: So, for example, we are reaching an agreement, an alliance with Hard Rock Hotel in Madrid.

JAVIER: Hard Rock Hotel is located very close to the main train station in Madrid, so just 300 meters away from the train station.

JAVIER: So all those members from our program, they will have also some special experiences or benefits if they are using this hotel.

JAVIER: For example, when they arrive to the hotel, they will have a special line for them, but also they will have a free drink during their stay, or they will have fielded checking or late checkout if they want to use it, or they will have a special welcome in their rooms when they are arriving.

JAVIER: So it’s to try to extend the experience that we are trying to deliver in our threads also to the hotel.

JAVIER: So we can control at some point the experience also on the hotel.

JAVIER: And this is some of the points.

JAVIER: And then also we are working with museums, for example, the Prado Museum, which is now very popular, at least in Spain, because all the prime ministers were having dinner last week during the NATO gala.

JAVIER: So we are having some special benefits for all of our family, of Más Renfe family there, that they will have priority access to the museum.

JAVIER: And then, well, we are trying also to have some special experiences for our members in some musicals, some shows, theaters.

JAVIER: All the culture side is very important for us.

PAULA: Lovely, lovely.

PAULA: So sounds like a partnership strategy coming through, Javier.

PAULA: And I can imagine for a brand like Hard Rock Hotel in Madrid, I’m sure it’s an amazing opportunity for them.

PAULA: Obviously, they’ve got the proximity, so it’s perfect for you guys as well.

PAULA: But I guess you’re going to be encouraging your passengers to stay in that hotel, because you know they’ll have an optimized premium, I guess, you know, end to end experience if they do, you know, across the two partner brands.

JAVIER: Yeah, there is a quote, I love quotes.

JAVIER: There is a quote that says that if you want to go fast, go alone.

JAVIER: If you want to go far, go together.

JAVIER: This is the approach that we are taking.

JAVIER: We want to go far.

JAVIER: I would love to go far fast.

JAVIER: This is not very easy.

JAVIER: We are going to go far.

JAVIER: We are going to go together.

PAULA: Wonderful, wonderful.

PAULA: And you compared, I suppose, where the train industry is right now, to where the airlines were maybe 30, 40 years ago in terms of dramatic competition being introduced for the first time.

PAULA: And obviously, one of the big revenue models for airline loyalty is, of course, co-brand cards.

PAULA: So do you think there’s opportunities for Renfe in Spain to go that direction perhaps as well?

JAVIER: Yeah, this is one of the steps that we were doing.

JAVIER: Well, some years ago, we launched our American Express co-brand card.

JAVIER: And it was quite successful, I would say.

JAVIER: But well, sometimes some people, they are not considering American Express because they are, I don’t know, using any other type of cards.

JAVIER: So while we are extending the options for them, and now just one month ago, we also launched MasterCard co-brand with one of the main banks in Spain.

JAVIER: So this is a challenge for us.

JAVIER: And the idea, as I was saying, is, well, let’s, once we have all these people on board, let’s make them to get some points, to earn points, not only with their trips, but also with their ordinary life.

JAVIER: And this is the idea that in each and every purchase, I mean, we can and we will have a lot of partnerships with some companies to earn points, for sure.

JAVIER: But co-brands will give us the opportunity to earn points in each and every purchase.

JAVIER: So this is on top of any strategy.

PAULA: Yeah, makes perfect sense.

PAULA: Sounds like there is some education required for Spanish consumers.

PAULA: I don’t think this model is as well established perhaps in Spain as it might be in other countries from what I’m hearing.

PAULA: So definitely a huge opportunity for you guys.

PAULA: And you mentioned to me as well, Javier, that you are looking around the world, I guess, at global best practice, particularly in the airline industry, given how many similarities there are.

PAULA: And I’m guessing there’s probably some good loyalty programs in the rail industry around the world, although I’m guessing I think Virgin Trains might have launched something in the UK, if I’m not mistaken.

PAULA: But are there other examples of loyalty programs in the rail industry that you’re paying attention to and following?

JAVIER: Yeah, most of them, I would say in Europe at least.

JAVIER: Most of them, they have their own loyalty program.

JAVIER: Some of them more complex or not.

JAVIER: There are some of them, for example, in the Czech Republic with Leo Express, which is a medium company, they have the Smile Club that, well, I like it a lot.

JAVIER: I think they are doing a very great job.

JAVIER: But also the Swedish company, they are having a good program or Italo Treno in Italy.

JAVIER: So there are a lot of companies doing some good things.

JAVIER: But not only in the rail industry, because I think that, well, as I was saying here in Spain, I like a lot the Carrefour Club.

JAVIER: And this is nothing to do with our industry.

JAVIER: They are retailers and transport companies.

JAVIER: But you can take some lessons from them and also try to apply it in our programs.

JAVIER: So this is the same in the international field that you can learn a lot from any industry.

PAULA: Well, that’s exactly the reason that we’re all going to the Loyalty Awards Conference in Madrid, I guess, huh?

JAVIER: Yes, at least this is my purpose of being there, to try to learn.

PAULA: Well, you know, I’m here to support them as well, so we’ll give them a nice plug there.

PAULA: I’m definitely looking forward to it.

PAULA: I learned a lot at the conference in Dubai last year.

PAULA: So tell me, what is the future of Loyalty for Renfe?

PAULA: Would you say, Javier?

PAULA: Or are you waiting till you go to the conference and find all the new ideas before you decide the next step?

JAVIER: Well, I have my team with a lot of work streams open.

JAVIER: But I will summarize them in only one.

JAVIER: Well, actually in two.

JAVIER: I would say that first of the strategies will be simplicity.

JAVIER: Simplicity is the ultimate sophistication, Leonardo da Vinci said.

JAVIER: This is the point.

JAVIER: While some companies in the travel industry, they are using a currency that you will never know what is the cost of each point or the value of each point.

JAVIER: And then you have blackouts and everything.

JAVIER: We are very simple.

JAVIER: I mean, you have 10 points, and that means one euro.

JAVIER: And you can spend them in every date, in every train, in every fair, whatever.

JAVIER: So it’s simple.

JAVIER: Probably, they are getting more money with the programs than us.

JAVIER: But I would love to go to the simplicity, because I think when people are understanding better the program, they will use it more.

PAULA: Definitely.

JAVIER: And then the second point will be partnerships.

JAVIER: So simplicity and partnerships.

JAVIER: And partnerships will help us to go far, as I was saying, and to increase the value of the program.

JAVIER: I mean, we have a very good opportunity with us, because in our industry, people are earning points in their business life, in their business trips, that they can use in their personal life.

JAVIER: So this is a very good opportunity.

JAVIER: But not only with that, we want them to use our Renfe points as a currency to spend, of course, with us, but in other industries, in their day-by-day program, and to be the favorite program for most of our members.

PAULA: So what I think I’m hearing there as well, then, is that you’re not looking for a lot of breakage.

PAULA: You’re actually encouraging redemption and hoping people will actually maximize the use of the points, is it?

JAVIER: This is one of the ideas and the KPIs that we are looking for, for sure, because we were facing a very high breakage during the pandemic.

JAVIER: We were keeping the same tier for our customers, but of course, we want them, I mean, we don’t want to cheat them.

JAVIER: So if we are giving them some rewards, we want them to use them.

JAVIER: Because if they are using them, if they are burning the points with us or with whoever, next time they will have to make the decision of traveling.

JAVIER: They will make the decision to travel with us.

JAVIER: And this is the goal.

PAULA: Totally, totally.

PAULA: Well, I can see the excitement.

PAULA: I can hear the ambition.

PAULA: And I think you are very well prepared for this newly competitive landscape in the Spanish market, Javier.

PAULA: So that’s a wonderful story.

PAULA: Thank you for sharing all of your expertise.

PAULA: And I will look forward to hearing you speaking at the event in Madrid.

PAULA: So anybody who hasn’t already signed up, I’m definitely, of course, encouraging everybody there to go to the loyaltyandawards.com website and thank them for introducing me to you.

PAULA: So any more comments from the Renfe side, Javier, before we wrap up?

JAVIER: No, same than you.

JAVIER: Thank you very much for inviting me to be in this podcast.

JAVIER: And also, well, I hope to see you all, all the industry in this loyalty and awards.

JAVIER: I’m sure that we are going to have for sure a very good time.

JAVIER: We are going to share experiences and to learn.

JAVIER: So very willing to see you.

PAULA: Looking forward.

PAULA: That’s amazing.

PAULA: Javier Marin Martinon, Chief Commercial Loyalty and Customer Officer for Renfe in Spain.

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

JAVIER: Thank you very much, Paula.

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