#315: Loyalty Insights from Air France - KLM's Flying Blue Program

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 episode 315 of Let’s Talk Loyalty, featuring the latest updates and insights from one of the best known and best loved frequent flyer programs, the Flying Blue Program from the Air France KLM Group. Ben Lipsey is the Senior Vice President of Customer Loyalty for the group, and I was delighted when he shared that he has been a self-confessed loyalty geek his whole life.

I had heard some of Ben’s insights at the recent Loyalty and Awards Conference in Madrid, and of course I wanted to learn even more about their successful campaigns and propositions and take the opportunity to share it with you, our global audience. In today’s conversation, Ben shares some of the challenges and solutions they’ve created, such as ways to address the concerns around sustainability, which has become such a dominant part of the conversation with passengers in Europe particularly.

We also discussed some of the underlying customer psychology and economical differences that are important to understand in order to run a successful airline loyalty program in Europe compared with North America. We also briefly touched on some of the opportunities that Web 3.0 offers. However, as you will hear, our conversation was cut short due to a technical issue on my side of the interview. So please do accept my apologies for that. Thankfully, Ben has graciously agreed to come back on the show in another few months to pick up the conversation where we left off, as well as update us on the latest proposition that he announces today. Please do enjoy today’s conversation with Ben Lipsey from Flying Blue.

Paula: So, Ben Lipsey, welcome to Let’s Talk Loyalty.

Ben: Thanks for having me, Paula. I’m excited to be here.

Paula: Yeah, it’s wonderful to have you here and uh, thank you for your patience. Took a while for me to figure out the technical side, so it’s super exciting. Great stuff, brilliant. So, listen, I, I had a wonderful opportunity as you know, to be in the audience, when you spoke at the Loyalty and Awards Conference recently in Madrid, uh, we didn’t get to chat much then, but I really felt it was super important to have you on the show. So, Let’s Talk Loyalty’s gonna be really excited. So, let’s kick off with my usual, uh, favourite opening question and understanding what you as a loyalty professional really admires. So, tell us your favourite loyalty program Ben.

Ben: Uh, no thanks. Uh, thanks Paula. I think for me, I, I’d have to say that the program that really got me, uh, hooked, uh, in the industry and really got me hooked as a, as a loyalty geek, uh, was Starwood Preferred Guest, uh, at the time, SPG, uh, which has then, of course been bought by Marriott and, and turned into Marriott Bonvoy. Um, but, uh, SPG at the time was really a program which had, I think, uh, uh, a rabid, uh, almost, uh, group of members who, who were brand ambassadors and brand evangelists. And, you know, myself included, and that would go out of my way to stay at, uh, at Starwood Hotels that I could earn my night and make sure I maintain my status.

Paula: Okay, my god, rabbit is a very strong word, huh?

Ben: I, I might be exaggerating, but I think there was definitely a lot of, uh, very passionate members who, uh, who, uh, were part of Starwood at the time.

Paula: Well, I distinctly remember the first program I engaged with, and I used to say, you know, I feel like a loyalty junkie, which again, is not a particularly positive word. But, I think as, as marketing professionals, when you have that experience of something is really influencing my behaviour, it’s very exciting.

Ben: Absolutely.

Paula: So where, where did it lead you to then, in terms of your career? I’ve heard you kind of describe yourself as a, as a loyalty to geek.

Ben: Yeah, I would, uh, I self, uh, self-acclaimed and very unabashedly, so, uh, loyalty geek. Um, I got my first foot in the door into the industry, uh, on FlyerTalk actually. So, it’s, uh, you know, when I was about 16. Uh, and, uh, so it’s been something that’s been true to my heart. And Starwood was really kind of the first program I was engaging with. Uh, you know, after kind of managing my dad’s, uh, frequent flyer program when I was a kid.

Paula: Oh, cool.

Ben: And, um, so on the, uh, no, but on the Starwood side, it was interesting because, you know, I was working at Air Canada at the time, traveling, uh, for work. Uh, and I, you know, made sure I went out of my way to, uh, to uh, stay at Starwood so I could maintain my gold and then platinum. And then climbed up the chain to, you know, eventually their ambassador tier a hundred nights a year.

Paula: Uh, wow.

Ben: And I would you know, find creative ways of, of going on trips and booking, you know, friends and family and, and you know, when I was with them I would book their rooms and it was, it was a whole, uh, a whole scheme to make sure that I could maintain that.

Paula: Yeah, yeah. So, so what did you do career wise then FlyerTalk, I think you said is where you ended up working, was it?

Ben: No, sorry. So FlyerTalk is where I met, uh, Ben Smith, who was the number two, uh, at Air Canada, uh, at the time. And ultimately, he offered me, uh, I told him I was interested in an internship. And, uh, uh, I don’t know how much information you, you want, but I mean the, yeah, my internship was actually was the coolest thing. I was, uh, about 20, I sent him, uh, an email, uh, or a message on FlyerTalk saying, you know, I’m, I’m interested in working for Air Canada. I’d been really passionate about the brand since I, since I was young. Um, and, uh, he said, uh, call me, you know, to his credit, he was willing to take a chance. And I called him and spoke to him and, and realized we were both kind of very passionate about aviation. Uh, and ultimately, uh, you know, he offered me an internship and, uh, I have to say it was probably the coolest job you could ever have at that age. Uh, I was effectively responsible for benchmarking the business class lounges of our competitors, and then designing the food and beverage menu for the Air Canada Maple Leaf Lounge.

Paula: Oh, my god! Wow!

Ben: So that was really exciting and they got me, uh, you know, hooked on the industry. And, uh, then fortunately when I, when I graduated, they offered me a full-time job and from there, I, you know, worked in, in various commercial departments, strategy and marketing and revenue management and all of that. And then, uh, ultimately, uh, Ben, uh, you know, started working directly for him. And then when he got the opportunity to move to, uh, Air France KLM, uh, I joined him, uh, and I was his chief of staff. And then, uh, moved into, uh, Flying Blue, uh, about six months ago.

Paula: Oh my goodness. So, you’re fairly new back in the loyalty business, huh?

Ben: Absolutely, yep.

Paula: Oh my God. So, a baptism of fire, I’m sure, is it?

Ben: You could say that. You could say that, but it’s, you know, it’s interesting because although I’m, I’m, you know, relatively new in this, in this role, uh, yeah. Like, you know, like I was mentioning, loyalty has been something I’ve been, I’ve been quite passionate about since I was, uh, since I was a kid. So, uh, you know, it’s been, uh, uh, top of mind. It’s been something I, I, you know, engage with many loyalty programs and I’m, you know, elite in, in several. Um, and, uh, it’s something which certainly affects my behaviour and it’s something that I see first-hand how we can influence, uh, what I refer to as irrational decision making.

Paula: Totally.

Ben: And, uh, you know, I don’t mean that, you know, in a Machiavellian way, but more to say that I think, you know, when you can rely on emotion to help guide decision making, uh, versus simple transaction based decision making, uh, from a customer perspective, I think you can really help customers find outsized value, uh, and what internally we refer to as loyalty value. Which is, uh, you know, the, the financial impact of them coming back and, and, and, you know, using your brand or your product. Uh, even when perhaps it’s not the most logical in the sense that if it’s more expensive or less convenient, but they still choose to engage with you, because of loyalty. And I see that, you know, I see that, that behaviour in myself and I see that hopefully as in this job. I see that’s my job to kind of encourage and incentivize members to do the same.

Paula: Totally, totally. We can cultivate that. And just before we get into the detail of Flying Blue, then, Ben, you mentioned briefly in passing there that you were managing your, your, I think you said your father’s account, um, in terms of loyalty. How did that go? Given your comment about irrational behaviour, did it go down well in the family?

Ben: Absolutely, absolutely. He, he knew I, I’m Canadian and so, you know, he was flying a lot with Air Canada at the time and, and, uh, so I was able to help, uh, navigate and encourage and tell him, you know, how to maximize his, uh, his flights, uh, so that he would achieve elite, uh, at Air Canada, which of course, uh, by extension meant that when we travelled with the family, we could go into the lounge. Which of course was, you know, the first kind of emotional reward. When you, uh, say, look at me, I feel so special. Um, so, uh, that was really, uh, I think he was, he was happy he didn’t have to do the, the legwork himself.

Paula: Totally.

Ben: And for me it was exciting because I remember our, my first trip to Europe, we were able to use his upgrade certificates and find business class. So, you know, you really see the, the benefit, uh, tangible benefits right there.

Paula: For sure, for sure. And myself as well, I think I mentioned to you last time we spoke, Ben, that I’m Ex British Airways and Ex Emirates, so also share the love of the airline industry. So even outside of loyalty, I suppose, the commercial side, and I suppose the pure inspiration, I suppose is something that we, we really feel connected by. So, So tell us about Flying Blue then. Um, we’ve talked about it being a baptism of fire. The last I saw; I think it’s about 18 million members. But I’d love you to share just I suppose, the scale of the program, um, because I know it’s the program of course, for Air France KLM and a number of other airlines, but just give us some context.

Ben: So, yeah, so Flying Blue, uh, let’s take a step back. So, KLM and Air France were the first, uh, two European Airlines to consolidate, uh, back in 2005. Uh, and at the time, um, there the only model for airline consolidation was in the US when, uh, one of the brands disappeared. So, you know, you had six major airline brands. Now you kind of have three. Um, you know, United was Continental and United. You had American, which was American and US Airways. You had Delta, which was Delta Northwest. And three of those six now remain. So, in Europe, you know, there’s a much stronger national tie to, um, the, the, the airlines. So, you know, the Air France is very much the airline of France. And so, the concept of, you know, having their France flights flying out of the Netherlands was really, uh, incomprehensible and that would never work. Uh, and KLM, of course, has its own strength, its own brand. So, when the two airlines came together, um, they decided to keep their individual respective brands and their ties to their respective countries and their respective hubs. And so, the first major sign of, uh, cooperation, uh, was a joint loyalty program. Uh, which was launched in, initially in 2005. And that was the kind of, you know, amalgamation of, uh, Air France, Air France Plus, and you had the royal, sorry, the Flying Dutchman, uh, from KLM. And so flying Blue in the last 15 and I guess now, uh, 17 years, uh, has grown, uh, demonstratively. We’ve, we, you know, we’ve grown to 18 million members uh, around the world. Um, of course our home markets in France and the Netherlands being the biggest. Uh, but we also have quite a sizable base in, you know, in, in, in Switzerland, in the Nordics, uh, in the US and in the UK. Which, uh, P’S former, uh, British Airways, you may or may not know. We, uh, well, KLM is the, is the second largest airline in the UK and actually outside of London, flies to the most, uh, airports in the UK, so more than BA. And, uh, so we’re kind of the airline of choice. And so for, for, you know, most all the people living in Northern UK. So, if you think about, you know, a natural market for Flying Blue, you know, the outside of France and the Netherlands. There is one right there.

Paula: Amazing, yeah. And uh clearly BA don’t, um, you know, emphasize that point. So, so fair play to be the airline of choice in, in, in the UK. Um, that’s huge. I definitely wasn’t aware of that. From a loyalty perspective, I guess Ben, you know, given your Air Canada experience, how would you say the programs differ or the loyalty initiatives and I guess the propositions, because in my mind, you know, again, it is much, um, more mature I would say, you know, in the US particularly with the co-brand cards. So, given that kind of national context and the psychology in Europe, what are you finding that loyalty program members are looking for?

Ben: Ooh. Um, how much time do we have?

Paula: Plenty.

Ben: Uh, you, you kind of hit two, uh, two nails on the head there. So, the first one is, is psychology, customer psychology, which I think differs, uh, both in, in North America, uh, compared to, compared to Europe and the way people view, uh, the importance of loyalty programs and their decision making. Uh, so, you know, in North America you don’t have the same, uh, pride or the same kind of ties to the airlines as you do in Europe. Um, the Germans love Lufthansa, um, the French love Air France, the Dutch love KLM, the British love British Airways. Um, there’s a strong national pride, strong desire to fly those airlines. Um, and so there’s almost a, uh, you know, independent of a loyalty program, there’s this, there’s this, you know, inherent, uh, choice if possible to go with the airline. Uh, in the US and Canada, you don’t have the same, um, kind of inherent loyalty. In the US there’s no national carrier. Uh, and you know, more or less each of the kind of three, uh, US legacy carriers are somewhat interchangeable. Um, hub cities aside, product is very similar, network is relatively similar. So, um, you know, there’s, uh, there’s uh, uh, loyalty becomes much more, uh, of an influe-, influential kind of, you know, lever that you can, you can play with. Um, the second, uh, uh, major thing which you’ve identified is the power of co- brand cards in North America compared to, uh, compared to Europe.

So in Europe, uh, we don’t have, uh, at the very base, we don’t even really have commercial, uh, sorry, consumer revolving credit. Um, so the concept of, you know, um, having a credit card simply doesn’t exist, uh, in the same way as it does in North America. And when you add that, you know, and, and buy consumer credit, you, you know, the banks kind of hope that a percentage of their customers are going to not pay back their bills every month, which then allows them to charge interest. Um, coupled with uncapped, uh, interchange fees, which is the fee that the merchant pays, uh, the bank for processing credit card transactions, uh, can be in the range of 3 to 4%. In Europe, uh, they’re capped by EU regulation at 0.3%. So, you know, you couple those two things together, the banks don’t have as much money, uh, to, um, have generous co-brand, uh, card propositions in Europe. So, you know, it, it creates a, um, scale, uh, that is a lot bigger in, in the US and you have both from a customer psychology perspective, you know, American created loyalty in 1981, uh, with the advantage and they’ve, you know, you look at the power that in 2008, Citibank, which is their co-brand partner, effectively bailed them out by loaning them or pre-purchasing a billion dollars worth of, uh, Amer-, uh, advantage miles. So yeah, a scale is really such that this is, the bank’s really view these loyalty programs as common state financial centre, so much so that in, uh, uh, when we look at the, the, the kind of breakdown of where the revenues come from, uh, and loyalty programs 80 plus percent in the, in the US market comes from, uh, financial partnerships effectively and credit cards. Um, whereas in Europe it’s totally the inverse.

So, we as flying blue, you know, we have 12 co-brands around the world. I think we have more than our European competitors to be, to be sure. I mean, we have cards of course in France and the Netherlands, um, but also, uh, in the US and we just launched one in Canada. We also have them in Japan and Saudi Arabia and Lebanon. So, I mean, we really try to go where our customers are and offer, offer products that can help uh, kind of, um, you know, make sure our brand is also, is also present in those markets, but the, the scale and the power is just not the same.

Um, so putting all of that into a, into a kind of a, wrapping that up with a bow. You see both the consumer psychology is different. The way, as a result, the consumers are then hooked or, or, you know, chasing those, those miles is not the same in Europe. The cards, therefore, you know, don’t have that same pull. Uh, so we have to work on other things to keep them engaged. And also um, you know, there’s other influences. There’s things like the sustainability concerns, which is much more prevalent in Europe than in the US. Um, but we then also have to, you know, shift our focus, uh, to where the money is. So, we have on the one hand, we’re trying to convince our customers in our home markets as well as around the world that continue to fly with us. That’s our, uh, what we call a loyalty value. The, the revenues that we can, additional revenues we can extract out of customers who will choose to fly with Air France and KLM. Um, and the second, uh, major KPI is, is direct revenue we get from our, from selling miles to, to credit cards and to other, other partners, uh, where you have some in Europe, but we also have a significant amount of focus on, on the US. Um, and you’re seeing, uh, kind of, uh, now, uh, you know, Flying Blue is, is a transfer partner, for example, of the Big Four transfer, you know, transferable points, currencies in the US with Amex and Citi and Chase and, and now Capital One. And you know, for us, we’re really trying to improve our proposition, our redemption program to make it more attractive for Americans to earn miles both in our co-brand card with Bank of America, as well as to transfer miles from the US banking partners into Flying Blue and redeem via Flying Blue. Uh, with the number of enhancements that we’ve both made and are about to make, to encourage those members, because like I said, that’s where the money is. Uh, so all that to say, different markets, different landscapes, different customer psychology, uh, different tools, different levers that we have. Um, so all in all, it’s been a quite a fascinating adjustment for me, but also, I mean, I think we have huge potential.

Paula: For sure and actually I’m very glad you, you finished on such a high note actually there, Ben, because I was beginning to get worried. Genuinely though, you know, as you talk through the amount of challenge, um, and, and the levers that are not as strong in the European market compared to the US, it’s quite dramatic. And we did have one of your colleagues on, uh, last year in fact talking about the Flying Blue kind of partnership strategy. Um, and that seems to have been one that did, um, and does extremely well for you guys. Beyond the, the usual suspect I would call them in terms of the, the, the travel partners. I know you have a lot of retail partners and there seems to be a very tangible, I suppose, commercial benefit to, to partners of Flying Blue, um, that really, I suppose appreciate the currency.

So, um, that sounds like something that’s going to continue. Um, and, and with that already said, um, I suppose that the sustainability piece is one that I did want to focus on today because…

Ben: Sure.

Paula: We’re all hearing so much about it. Is it something that’s guiding, um, propositions within loyalty? Because clearly it is for the airlines, so I think we can take that as a given, and I’ve seen some of the statements on the group website but tell us how you’re thinking about sustainability from a loyalty perspective with Flying Blue.

Ben: So, um, I guess, you know, the majority of your, of your listeners are probably, uh, English speaking, uh, and, uh…

Paula: For sure.

Ben: So, you know, living in, in jurisdictions where, to be fair, I have not seen the, uh, uh, um, same prevalence of sustainability concerns as we have in, in, in Europe, so, in France and the Netherlands. Uh, yeah, but also in, in a number of other EU countries.

So in, uh, uh, Flying Blue, we’ve really tried to do our part to support the airlines in, uh, achieving their sustainability goals and trying to, uh, like I say, make, uh, kind of encourage the right behaviour, um, yeah. Uh, by participating in some of the sustainability, you know, green, um, and ancillary options, for example, can, uh, contributing to, uh, our Sustainable Aviation Fuel, uh, projects, what we call SAF.

Um, and, uh, but it’s gotten to the point where, you know, in France, uh, you know, flights were, uh, banned if there’s a train option. Uh, domestic flights were banned if there’s a train option under two and a half hours. In the Netherlands, there’s a bill being debated in parliament that would ban effectively frequent flyer programs because they’re seen as, uh, you know, potentially not, uh, encouraging sustainable behaviour. So there really is a significant pressure that we feel here that our, our, uh, you know, colleagues in the US and other markets don’t, don’t feel and don’t have to deal with. Um, so, you know, what we’ve done in, in some of the things, uh, like I say, to encourage, uh, the, the, the conscious choices as we call them. Um, you know, we were the first, if I’m not mistaken, the first in the industry to really, uh, award, uh, members with, uh, XP, which is the, um, status currency. I mean, it’s the points that you would need to earn, uh, status, okay? For uh, uh, uh, green ancillary. So, for, for contributing to SAF, for example, um, or, um, those kinds of things. They earn XP and we were one of the first ones to actually, you know, effectively say you now need to fly less if you contribute to green, uh, green initiatives. Um, because, you know, if you assume you need, say, 300 XP to maintain your platinum status, uh, previously you had to fly uh, to earn, you know, your 300 XP and now you can contribute, you can, you can buy, uh, SAF, you can contribute to SAF, uh, which, and get XP from that, which then reduces the amount of, uh, flight activity you need to make. Which of course is like, is a big bold move for an airline to say, but for us, we think it’s the right thing to do. Um, and uh, so we’re seeing a lot of members really kind of take advantage of this and really enjoy this. Uh, this new, uh, new proposition, but we also see it does have a revenue upsides as well. I mean, um, you know, we used to have, um, we still have, I mean, members that make kind of what they call XP runs or you equivalent as to, to, to, uh, you know, um, uh, flight, uh, or, you know, you could call them hotel or mattress runs, and it exists in kind of every industry. But what it means is people would fly either unnecessary flights or they would add on segments unnecessarily to existing trips so that they would get the extra points.

Paula: Totally.

Ben: To give you an example, you know, we award XP based on segment, and it’s a function of distance in cabin. Um, but if you’re going from, you know, Amsterdam to New York, for example, instead of going on, you know, one of the two or three direct flights, uh, if you wanted to get your extra five or 10 XP, you could go Amsterdam, Paris, New York. And because the pricing, generally speaking is aligned and it, it’s, it’s O&D based. Uh, we as the airline, were forced to carry you an extra leg unnecessarily. Which reduces what we call the revenue quality. So, by offering, uh, new ways to earn XP, you actually, again, disincentivize undesirable behaviour and rather encourage members to make what we view as the right thing to do for, for the planet, while also, uh, having an upside potential on, or the upside effect on the, on the revenue quality for the airlines. So it, we look at it as a win-win.

Paula: Yeah, yeah. I mean, it’s, it’s, it’s absolutely extraordinary and we all know those stories, of course, of, you know, doing the mileage run and, and literally having, um, you know, that level of, you know, anticipation and excitement in order to, to change behaviour in such a dramatic way.

I, I think what I’m hearing, and I hope I’m summarizing this well enough, Ben, is it reminds me I did work in a loyalty program in an energy company back in Ireland called Electric Ireland, and there was that same, you know, I suppose um, surprising factor, you know, from the outside, but of course very obvious in that we couldn’t incentivize people to use more electricity. You know, that was obviously not, not a thing. Um, but what you do want is share of wallet, so…

Ben: Correct.

Paula: I think what I’m hearing is you are saying, you know, if you’re going to fly, please do fly with Air France and KLM, so…

Ben: Correct.

Paula: The messaging has to, I guess, reflect a very important point.

Ben: Absolutely and it’s, it’s a really interesting point that you make because that, uh, is exactly the case. So, you know, you’re seeing, uh, again, because a lot of the, the, you know, focus on sustainability in these markets, you’re seeing the messaging changing on the part of the airlines. I mean, there’s a lot less, uh, public advertising on, on TV, on the radio, for example. Um, the messaging is changing. So instead of saying fly more or, you know, uh, these are attractive prices that you can get away now. It’s, it’s effectively saying, you’re talking about the brand. You’re talking about, you know, the, the, the, the product that we offer on board, uh, the experience of flying with us. And, you know, the, the underlying message is, you know, we’re not going to tell you to fly, but if you do have to fly, if you do choose to fly, we would prefer it be with, uh, with Air France or KLM and Flying Blue is the same. You know, we, we are, we are fundamentally an airline, you know, loyalty program. We exist to reward, uh, travel with the airlines, that is who we are. Uh, but we think we can also do more to incentivize members to make, um, you know, conscious choices, uh, when they do fly, such as, uh, contributing to our, uh, sustainability goals as well.

Paula: Love it, love it. And I do want to move on in a second now to, um, some of the dare I say, sexier stuff in terms of, you know, what, what the future holds. But just before I do, I saw a wonderful figure on your website, Ben, as well. I just wanted to mention, and I suppose acknowledge because it’s on the charity side, and again, like all good loyalty programs, you’ve got all of the kind of core propositions, of course in place. But I think sometimes it’s not visible in terms of what’s, what’s being delivered, but the statistic really impressed me, 31 million miles donated in 2021 by Flying Blue members. I thought that was amazing.

Ben: Yeah, no, and, and we were really pleased because we, uh, partner with a number of, uh, of NGOs and, uh, and other, uh, you know, sustainable groups, um, uh, and, uh, and relevant, uh, relevant partners in, in that space. And what we, uh, do with the donated miles really depends on the, on the individual partner. But for example, with the, uh, you know, Médecins Sans Frontières, which is Doctors to the Borders, um, for example, they need to travel, uh, a lot, uh, for their, for their work. And so when members donate to them, they can then use those miles towards tickets and can travel, uh, effectively free of charge to, you know, any number of places in on the network that, that we fly to, uh, which is quite extensive. So, um, you know, we saw a lot, I think during COVID there was not a whole lot of travel going on. Uh, and a lot of members, uh, felt, I think that they, you know, one of the ways that they could help, uh, do their part and to recognize those, uh, that were, you know, really working on the front line was to donate their miles to, uh, any number of partners that we have in that space.

Paula: Yeah, for sure. And I’m sure you’ve seen it over your career already, Ben as well, is that very often what happens is people will say they want a charity partner or proposition, um, but you know, when it comes to it, they might not actually make the donation. But I think what, um, what we’ve all seen is that the pandemic did, I suppose, focus the mind, and as you said, I guess when we, we couldn’t travel ourselves, there was that opportunity to, to be of service. So, um, incredible. 31 million. Absolutely brilliant. So, listen, Web 3.0 is a topic that I think, um, you know, interests and confuses a lot of people, certainly from my perspective. Um, so I’m going to, um, just quickly ask you, we just have a few minutes left now, just quickly ask, what are you excited about in terms of Web 3.0?

Ben: Um, for us it’s a, it’s an interesting, um, field. You know, we’re not yet sure what the future’s going to be. I think a lot of companies are trying to figure out their footing, uh, in that space. Um, but one of the ones that, you know, a story that kind of caught my eye, which was I found fascinating, is when you see more crossovers from the, you know, physical world into the virtual, uh, and you’re seeing a lot of shops, uh, physical shops set up, you know, virtual boutiques in the Metaverse, for example. Um, and, uh, you know, the one that really stood out to me was what Nike did, uh, with a company called RTFKT. Nike, um, uh, bought this company called RTFKT for a billion dollars. Uh, and it was started by, I think, you know, a couple of 24-year-olds. And, uh, they effectively, they made, um, uh, virtual, uh, sneakers. I mean, they made sneakers in the Metaverse, uh, using NFTs. So they were, you know, they were tokenized and everything, but they were, and you would buy them. And they were going for, I think, upwards of 50,000, uh, dollars, uh, when you do the conversion from crypto at the time.

Um, which was phenomenal. And, you know, some would say insane, but you know, this is really, you’re seeing the power of the, of the, of the Metaverse and the new, kind of the new frontier, so to speak. And so, Nike really saw the potential for this. And so they, they invested in this company RTFKT. And now you see that RTFKT is on the same top line brand, uh, platform as Converse as Air Jordan and as Nike. So it’s really one of the top line brands. And, uh, Nike really believes in it because they’ve also started to say, okay, how do we bridge that gap from the virtual to the physical? And so they’ve kind of created these, these collabs, uh, and they have, you know, these virtual sneakers that will drop in the Metaverse that can be customized. Then, you know, you can, you can buy that customized shoe and Nike will, will sell it in the real world. And they’re going for two to three times the price of normal sneakers. They’re going for selling between four and $600 in the store. So Nike is making money on both sides of the equation, which is great from commercial perspective, people are happy because they get their virtual sneakers in an NFT. They can then replicate that with a physical sneaker in the real world. Uh, and, uh, so, you know, and, and, and they’re, again, they’re exploring new ways to, uh, to uh, uh, you know, take advantage of this, uh, this new opportunity.

So for us, you know, I can’t say that, um, that this is really something that we are gonna do tomorrow, but it is, uh, certainly an interesting opportunity for us, uh, to, uh, to explore.

Paula: Okay, okay. Well listen, with that said, Ben, um, I, I would love to, um, literally stay closely connected to, of course, your journey and everything that you’re gonna do in that space. So, I really feel it’s important for a program like Flying Blue that we stay and, and, and stay up to date, I guess, you know, um, from year to year with all the various propositions. So, with that said, is there any other final thing that you want to mention to our audience before we wrap?

Ben: Uh, well, thanks for having me on. I mean, I, I’m, I’m super excited. I think there’s a lot of potential we have. Um, you know, one thing I’ll give you guys just a sneak peek. Uh, you know, we’ve had a couple of product launches, uh, and evolutions in the last year. We launched a family, uh, program which allows, you know, members to create a family, I think of up to, uh, to eight people. Um, and, uh, what we’re about to launch is a stopover, uh, feature, which allows, uh, members to, uh, have a stopover for up to a year. Uh, at no additional charge in, in miles or catch, uh, when connecting between two Air France and KLM flights. So this means, for example, if you’re going from New York to Barcelona, uh, you can connect via Paris. And previously, you know, if you wanted to stop in Paris for more than 24 hours, it would’ve been a second award. Whereas now you can have, you know, effectively two trips for the price of one, um, and stopover in, uh, in, in Paris or Amsterdam, uh, for no additional charge. So we’re really excited. We think that members are gonna be happy. We think that this is gonna be a great, uh, a great feature that members will like. And, um, we, you know, look, looking forward to doing more of that, of that kind of thing.

Paula: Oh my goodness. Super exciting, Ben. Yeah, you’re, you’re right, that’s absolutely a, a powerful proposition. Wonderful way to end. So, with that said, I have to say, really exciting to hear from Ben Lipsey, Senior Vice President of Customer Loyalty and Head of Flying Blue.

Thank you so much from Let’s Talk Loyalty.

Ben: Thanks, Paula. Thanks so much.

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