EPISODE 111 : 04/27/2023
Mark Ross-Smith is an award-winning global airline loyalty industry leader, and he is CEO & Co-founder at StatusMatch.com, helping airlines grow and manage their most valuable customers. Mark has worked with major brands like Emirates, Lufthansa, Air Canada, Frontier, Spirit, El Al, Copa, Royal Air Maroc, LATAM & more. Known as “Mr Loyalty”, Mark is the most followed airline loyalty leader on social media, and he won Loyalty Magazine’s ‘Loyalty Royalty’ 30 under 40 Award in 2022.
Host: Ned Hayes and Ashley Coates
Guest: Mark Ross-Smith
Listen to every episode
Topics discussed in this episode
- Detailed small business insights from Olympia, Washington
- Small business resiliency and adaptation during COVID
- Doubling community outreach during the pandemic
- Opportunities for small business loyalty programs
Watch Spark Loyalty’s Small Business Success Channel
Ned Hayes [00:00:00] Welcome to Spark Plug, where we talk to smart people working at the intersection of business and technology brought to you by SnowShoe, Your smarter loyalty.
Ned Hayes [00:00:09] Leader Spark Plug is excited to welcome Mark Russell Smith to the podcast today. Mark is an award winning global airline loyalty leader. He is a CEO and co-founder at StatsMatch.com that helps airlines grow and manage their most valuable customers. Marcus worked with major brands like Contour, Air Canada, Frontier Spirit, Copa, Royal Air, and many more known as Mr. Loyalty. Mark is the most followed airline loyalty leader on social media, and we are very excited to have him as part of our podcast today. He won Loyalty magazine’s Loyalty Royalty 30 under 40 Award last year, and we’re thrilled to have them. Welcome, Mark and Ashley.
Mark Ross-Smith [00:00:54] It’s great to be with you today. I’m looking forward to our conversation.
Ashley Coates [00:00:58] As are we. Thanks so much for joining us. Well, Mark, let’s start with status match dot com, which you founded in 2020. And we start by defining the industry term status match. Will you share a definition and explain why this is an important practice for the airline industry?
Mark Ross-Smith [00:01:16] So I start off the bat status match as an idea is is the cheapest, fastest, most effective way for airlines hotels to drive new costs, high value customer acquisition. And so the idea of a status match has been around since about 1986 where a gentleman was flying with United Airlines quite a lot. He said a fax to American Airlines and said, Hey, I fly with your competitor quite a lot. If you give me some perks, I’ll shift my business to you. They gave him some perks and he shifted his business and voila, we have that as matching was born. So I was about 35 years old as a concept. And the idea goes something like this If you have like a silver gold or platinum status with an island or a hotel, the other airlines are they want your business as well, right? Because if you’ve got status, presumably it was money to the airline. Yeah. And so the competitors like the legions, they kind of what some of that. Right. So they say, hey, you’ve got gold with airline. I will give you gold status over here. So it’s the equivalent sort of thing. So they’re matching your status, right? So they’re giving the equivalent kind of thing. So here’s gold status now come fly us place pretty close, you know, And so that is kind of like, you know, wooing a new partner on a date, you know, take them out to dinner and, you know, say, please, you know, let’s let’s hang out again. I think it’s a similar kind of idea of the status matches. Yeah. That take, you know, take initiative showing something, some goodwill upfront and saying, you know, we’d like more of a business and it’s very effective because if you’ve got gold stars, one airline, presumably you’re pretty hooked on that brand already and someone comes along says, Here’s gold over here, just come try us just once. Just just for a second. Just just one time. You try it. It’s actually not too bad. And then from then on, it sort of flows on. And you might give them more of a business like none of the business. But at that point, it’s entirely incremental for that brand that you business they could capture from you now.
Ashley Coates [00:03:13] Wonderful. Thank you. And you mentioned that the concept of status match is about 35 years old. And I know you’ve said before that the way that airlines do status match hasn’t really changed very much since then. So can you tell us what wasn’t working from your perspective and what solution you sought to provide to airlines?
Mark Ross-Smith [00:03:34] So back of the day, it was a fax machine. So fortunately we’ve moved on from there. I kind of liken it to like Apple and iPods and iTunes and stuff. You know, if you think rewind 20 years ago. Right. You could download music pretty easily off the Internet for free. You know, you took a few risks, but you did it. Some illegals are not. You know, there’s all these viruses and all sorts of stuff they had to watch out for, but you could get it just like airlines, hotels, They can run those. Not as much promotion themselves, but there’s risks that come with it. So what we’ve done is effectively cleaned it up. So we’ve made it easier, faster for the user, just like Apple did, and started charging people for music. We charge people for start dispatching. So we charge the customer fee to go through this process. And that fee varies depending on the brand and the timeframe that get status for all sorts of stuff. So what that means is suddenly there’s there’s money in this as well. It’s not just giving out for free and hoping for the best. When there’s money behind it, suddenly there’s money for marketing. Suddenly there’s money to put behind anti-fraud tools and security and and all these sort of problems that have riddled status matching at our London hotels for a very long time. You know, we’ve seen fraud levels up to about 50%, 30, 50% in airline status matching, which is astronomical, obviously. And so you look at all these things combined with what is generally has been a fairly poor experience for people. I mean, think about it, right? You’re a gold member with an airline, right? How much are you spending? Ten grand. 15 grand a year, maybe more. 20,000 bucks. Right. You’re a good customer at that point, right? And you have expectations, right? So you’re used to being treated like a business or first class passenger. Used to the priority check in the party lines, the lounge, access the champagne before flight. You’re used to all this kind of stuff, right? And if an airline here offers a status match without a good process. Right. It’s a fairly average brand introduction type experience. Right. You’re kind of used to this level and then you sort of traded not so great. It’s just not not a great way to onboard a new high value customer. So we’ve sort of clean that up, made it really beautiful, really fast, really easy, really, really easy for brands to acquire these these high value customers that, you know, contribute massive amounts of money to the bottom line.
Ned Hayes [00:05:51] I’m curious, your platform provides unique tools to make the process smoother and create a better customer experience. So can you dig in to what your platform is actually providing to customers and airlines?
Mark Ross-Smith [00:06:03] So I’ll post on LinkedIn recently. Anyone listening, go check it out. I said that our business has no big data. No, I know. Web 3.0 no crypto, no blockchain, no chat, GP2, nothing like that. We’ve we’ve just focused on the fundamentals, right? Pretty boring business. You think about it, there’s no buzzwords, there’s no PowerPoint deck that says we’re the next crypto e-wallet, none of that stuff. And yet, you know, we’re effectively a startup, you know, two or three years old, work with a bunch of major global brands. And I think part of what we’re doing, part of the traction we’re seeing is because we haven’t focused on the technology, we’re focused on this customer first approach. How do we make it better for travelers? How do we make it better for airlines and travelers to come together effectively because we’re of a matchmaking service? But a lot of ways, right? So, you know, we think about technology. I’m a I mean, I’m a tech guy. I’m an engineer. I had my buddy programing for a long time. But, you know, so I’m I’m always a big fan of new tech and new ways to do things. Firstly, it’s easier. That becomes a point where. I think sort of just going back to the basics makes a lot more sense. You know, not trying to write on the latest thing or get the whatever big data like these are great for this business. It’s it’s fundamentally a customer service function, customer introduction from function. And I think, you know, technology has played an important part, but it hasn’t been the thing we lead with, right? So when we talk to consumers, to talk to airlines, we don’t say, hey, we’ve got this amazing web script, but our blockchain solution that’s going to regulate routinized the industry. We sort of say, Hey, we’ve got a pretty boring thing, but we’ve solved this, you know, issue that you’ve had for the last 35 years and we can get you, you know, X, Y, and Z results off the back of that.
Ned Hayes [00:08:01] You really focus on the elite travelers as you describe, people who are spending, you know, 10,000 a month or more global travelers who represent, what, 30, 40% of our airline revenue. So can you tell us more about those particular people and how you reach them?
Mark Ross-Smith [00:08:17] You’ve done your research, Ned. Correct. So these are the people have like silver, gold, platinum, diamond type status. You know, typically they fly business or first class. They tend to book their flights or hotel rooms, you know, somewhere between three and seven days in advance. So the booking window’s a lot shorter than a leisure traveler who might plan six months in advance to go to Disneyland. Right. So when you book closer in, you tend to pay more. But just because average management things cost more. Yeah. So they pay more if they tend to fly more that far more frequently. These to your point, these are the most valuable customers an airline can get. There’s a significant overlap between these customers and business travelers. You know, business travel in the U.S. is worth somewhere around $30 billion and 14% of all trips in the US business travel related. And that I’ve I’ve seen stats they contribute some around 70 75% of profits for airlines that’s in terms of airlines that are profitable from selling seats to customers. Roughly translates to about 950 bucks per travel base per trip. So that includes flights, hotels, car rental, Ubers, you know, the whole travel sort of experience per trip, right? So there’s a large overlap between that and people that have elite status, reciprocal top level an airline, right? Because they just they just interact more. They do more. So you would think that these brands would walk over these travelers because the more of these you have, the more money you make, the more premium revenue get. There’s another important fact is that there’s another overlap. It’s like a three way Venn diagram happening here where these people that have the credit cards as well. So this is only points of miles from swiping card you on your ten one mile per dollar, you know, that kind of thing. Those miles drive, you know, high margin revenue for l’analisi programs. They make a lot of money, but it’s extremely profitable. And so these things all need each other to work. Right. So you need the points of miles that drives people to get the credit card. And people like the credit card. They tend to fly more. They tend to spend more. They don’t then and the elite status. And it keeps people in this what we call the premium loyalty ecosystem. Right. Because if you’re not in this premium ecosystem, what are you doing? You’re flying. Based on price, you’ll find based on the preferred airline or the one with the least connections or the the one with the if they’ve served your favorite snacks on board or the choosing for something else that’s not loyalty related. Right. But what we’ve seen over the years is people will go above and beyond and do crazy things purely for loyalty, purely for their status, especially. They’ll fly halfway around the world just to keep their cult status. They’ll spend money unnecessarily just to keep it. And this is the thing. It’s a big thing in travel. Actually. Anyone just just Google like status runs on forums and just see the millions of people talking about fly from New York to Paris and connect through Doha on Qatar Airways, not just on 8647 miles, and that’ll get me to go for another year. And that will mean next year when I visit my parents in Hong Kong, I can go to this business class and try this champagne that I’ve never tried.
Ashley Coates [00:11:36] That’s pretty incredible.
Mark Ross-Smith [00:11:37] So these customers obviously are people that the travel industry wants to cultivate and keep happy. Yeah, because you’re right.
Ned Hayes [00:11:45] I have friends who do trips to Dubai just to rack up the miles.
Mark Ross-Smith [00:11:48] It’s fascinating. It’s large groups of people that do this, especially around the end of their qualification year, when they’re just short of keeping that platinum status for another year. You know, mysteriously, the whole office needs to go for a trip to Cairo for the weekend.
Ashley Coates [00:12:05] Yeah, probably that some committed travelers. Well, let’s actually look. Get travelers in general, if that’s possible, to step back just a little bit and talk about traveler behaviors and expectations and how they’ve evolved over the past couple of years, because, of course, pandemic had a pretty big effect on travel. So how have in general, how have behaviors and expectations from travelers evolved over the past two years? And how are airlines responding?
Mark Ross-Smith [00:12:36] Well, a fabulous question we could talk about for about 3 hours long. You know, I think 20, 20, 2021 really taught us that the subway lines, the care and the some of the doubt and that sort of split travel companies into two groups, I think it lowered some people’s expectations. And you know, what to expect from an airline. In many ways, it brought forward the importance of having loyalty status with an airline or hotel where, you know, if you’re a gold platinum member, suddenly if something went wrong, you’re looked after first. All right. So you’ve got 300 people, the airlines trying to re accommodate or do something for you just have that security of knowing that you’re at the top of that list, that you’re being looked after more than someone else. So a lot of people gravitated to try and get status purely because of that, because that was the only way. You’re going to be more looked after by the and I’m talking about things like being first in the refund queue like a flight was canceled or you couldn’t fly because a border was closed or something and then getting a refund, that that could be the difference for getting a refund in a week versus six months. And that’s a big deal. But, you know, a lot you can talk about a lot of money. There’s a lot of that going on. There’s also, what, eight new airlines that have started in the last couple of years, you know, mostly smaller airlines. And I think this is good for the industry in a lot of ways because it’s there’s people out there that I’ve seen, you know, how travel brands have treated people last year and thought, you know, we could do better. Right. So they’ve come along, they’ve gone out there, raised funds. They’ve got, you know, substantial backing. If you think about it, these new airlines actually a better financial position than legacy carriers, because those legacy carriers, they went out and got billions of dollars of loans. Right. The oldest debt that they’re carrying suddenly got the start up airline has debt, but it’s a lot less. It’s actually in a stronger position if you think about, you know, from a financial perspective. And I think some of these new brands are trying to change the game a little bit, you know, that that they’re learning. You just have to you know what, If I was starting out today, I’d just troll through the Internet and say, look at people’s complaints about the competing airlines I’m going to compete with and say, I I’m making this up. But, you know, say British Airways, my competitor. Right. What don’t people like about British Airways? And then I would just do the exact opposite. I would fix all those things. I’ve put my airline, but I think it’s difficult, you know.
Ned Hayes [00:14:59] Yeah, well, it shouldn’t be that difficult. But with the pandemic, with all these changes, I mean, a lot of people are on the verge of downgraded. Right. I think you’ve said 50% of elite travelers are going to be downgraded in 2023. So that’s kind of a downgrade. A downgrade tsunami. So what does that mean for travelers?
Mark Ross-Smith [00:15:18] It’s a pretty scary downgrade. Tsunami. The status cliff, the New York Times calls it the great reset of elite status in 2023. You know, we’re in the end of Q1 now. We’ve seen, you know, Delta, United, Hilton, Marriott. So these are some of the bigger travel brands between them, I think is around 10 million people that have lost status or been downgraded already this year. And like we’re on in Q1. So we’ve still got another three quarters to go this year. This is pretty scary. Think about it, because we sent our survey to 20,000 high value travelers at the end of last year. And one of the questions was, if you are downgraded in status, how will that affect your travel? 86.6% of people said that they would change their travel brands in some way. So what this means is some people might just stay home to a Zoom meeting. Some people might rent a car to drive out 2 hours instead of taking that short flight. Some people might just not go on the trip at all. Some people might buy cheaper airlines, some people might do some other activity that isn’t aligned with what they used to do. And this obviously is great, I think, for travelers. You know, we get to try new things. You know, we’re not so etched on without the old brands we used to engage with. So I think in a lot of ways that’s good for travelers. For a travel brand is pretty effing scary, I think, because you’ve got a big chunk of your database for some airlines. We’re talking, you know, 30, 40, 50% of people of elite status hold has been downgraded, right? So if 50% are being downgraded, but 30% of your total AirTran revenue comes from these people, that’s a big chunk of revenue putting at risk just by downgrading people, knowing that 86% of them said that they’re going to change their habits. Yeah, So I think, you know, we’ll wait and see how it actually pans out. The airlines handling it better than others, you know, sending out a lot of offers to try and just keep you engaged in some way. You know, a bunch of people needed to be downgraded, obviously, because I haven’t been on a plane for, you know, for years. You know, realistically, what’s the value that they bring to the brand, Right. So downgrading and not the end of the world. However, you know, there’s one lady, you know, works for a very large bank in the US and she was downgraded. And about a month after being downgraded, her travel budget for her department was reestablished, was put back in. And when I say travel budget, I mean many tens of millions of dollars is not small amount. And so you can guess what airline she was not going to fly at that point. You know, so there’s definitely a shift in terms of the customer share shift. I think in the industry it’s happening right now. Airlines maybe not seeing it as much because anyone that’s traveled recently knows that it can be expensive to fly and stay in hotels right now because lots of old game cabins for the airlines are not seeing it as much. Now. I think towards the end of the year as demand softens and more capacity comes back into the market, you know, more countries like China has just reopened up. Right. I mean, there’s a third of the world ready to go travel get. So you bring that back into the mix. Suddenly airlines need an extra hundred flights a week to this country. And, you know, I think then we’re going to start to see the implications of of the long term effects of downgrading large numbers of people very quickly. So we’ll wait and see how that that pans out.
Ashley Coates [00:18:45] Yeah. Well, so what we’ve been talking about this whole time is really travelers loyalty to a certain airline. And I’d like to get a better idea of how airlines actually measure loyalty. I understand that an airline loyalty business can actually be more profitable than the entire airline itself. That’s something you might have spoken about before. Can you tell us, Mark, how airline loyalty businesses are valued, how they operate, and what can other industries learn from the airlines?
Mark Ross-Smith [00:19:14] I may have mentioned this once or twice before. And you’re right, some airlines are worth the entire airline group. That is because it’s because of the type of revenue they generate. Right. So when you fly by ticket, you pay 500 bucks for across the country. Think about what the margin might look like on that transaction for the airline. Two, three, 5% in coach. Right. Bit more in a premium cabin. Whereas if you look at the airline, the loyalty side of the business, we’re talking credit cards, banks, miles points, this kind of stuff. Yeah. And Miles don’t exist. They technically don’t exist, Right? You can’t touch them. Can’t feel them like. You don’t need pilots to run, Miles. You don’t need aircraft. You need landing slots. You don’t need 50,000 employees. And effectively, the airlines are selling miles to banks. Right. So you get your credit card. That might be a logo on the site. The card, this money in the in that transaction. Right. It’s $100 transactions, interchange fees. So what it means is the the issuer, the who runs your credit card brand, they get a small clip of that transaction. Right. They get some of that money and they split it. They keep it themselves and they use a bit to give you miles. So what they’re doing is they’re buying miles from the airline and putting it into your airline account. Right. So they can make a dollar miles for that one transaction that you did. Right. That’s one of ten transactions you’ll do today. And you’re one of 200 million people in the country doing that every day. So there’s a lot of money there. To the point where the three big U.S. airlines ultra programs in 2020 were all valued somewhere between 22 and 30 billion U.S. dollars. Just the loyalty program itself, where the airline was valued somewhere between ten and 15 billion. So what it means is that in theory, the airline has negative value. Right. Gary left from view from the wing. Talks about how American Airlines has to fly aircraft to support the value of its loyalty program. So they’re not an airline. They’re their marketing company that flies metal tubes in the sky to support the valuation, that loyalty business, the marketing. I think that’s really interesting way to look at it. You know, so what can what can other brands and other industries learn from? This actually is something interesting. I saw recently where I was saying if you wanted to start a new credit card product today, it would be cheaper for you to start an airline, run an airline like a get a business, start an adult, get planes in the sky high, start catering landing slots, fuel pod, do all that jazz, all the safety stuff. It’s cheaper to do that as a as a method to acquire credit card cardholders for your bank. It’s cheaper to do that than go through traditional customer acquisition channels like digital marketing online overall to get scale quickly. So that’s how powerful airline loyalty programs are in driving transactional revenue for banks and, you know, credit card signups and stuff like that. Hence the value of these programs, which is all underpinned by the type of revenue that create. You know, we talked about airline ticket sales, you know, on the margin on that, but typical margin on selling points. Most banks can book from anywhere between 50 and 70%. So as if you think of it like a marketing or a technology company, the type of money they’re earning, you know, and the multiples that would trade at an evaluation. It’s not crazy to think, you know, 20 to 30 times profit earnings ratio on loyalty program, you know, whereas an airline typically might trade about 6 to 8 times, which means for every $1 profit in airline loyalty business, it’s worth about 6 to 7 times more than a dollar profit. Email on business.
Ned Hayes [00:22:58] That’s really fascinating. We’ve talked in generalities about airlines, profit margins and loyalty programs. I’m curious if you could name some names. What are some examples that you have really successful airline loyalty programs, ones that you admire?
Mark Ross-Smith [00:23:14] There’s a what come to mind, you know. I mean, I’m a bit of a Qantas fanboy. You know, I’m Australian. I grew up I have status, a lifetime status for them. I know that program really well. And for people in Australia, it’s a. Fantastic, really fantastic program. They they the Qantas team put a lot of effort into it in terms of the benefits and it’s extremely profitable as well. Again, probably a the airline, another one that comes to mind doesn’t last three or four years I think is the Air Canada Arab airplane program. You know, they’ve done a lot of really great innovative things, new partnerships. They launched the thing with Starbucks, which is pretty cool and more interestingly, that they’ve launched partnerships with other other airline brands that you wouldn’t normally associate with Air Canada. And what this means is it’s kind of brand introduction to owning all these these points of miles an airline, and suddenly you can use them for some obscure airline you’ve never heard of before because you really want that business class to get to Europe. And so you try it, you redeem for it is actually pretty cool. So I think, yeah, I kind of do a lot of pretty innovative in terms of airline loyalty, innovation. I think that definitely up there in the top ones and I think because of that reason, they’re one of my favorite as well because I like I like seeing innovation, I like seeing new things. Who doesn’t? Even as a customer, you kind of want your you’re kind of rooting for your airline multi program to do something new because when they do, it benefits you as well.
Ned Hayes [00:24:37] Absolutely. Yeah, it benefits everybody, right? So in the travel industry, as in many other industries, we’re beginning to see, you know, A.I. and big data disrupting industries, changing the game. So I’m curious if you could share with us and our listeners how the travel industry might be able to use these technologies to really personalize rewards, to really understand travel preferences and kind of optimize for different behaviors.
Mark Ross-Smith [00:25:04] So, you know, we talked earlier about how we’re not using big data at IDLE as amazing stuff, but I’ll share some insights here, how I think it can be applied to airlines collectively. Last year it was about $90 billion worth of ancillary revenue, right? So this is selling meals and drinks on board bag fees, seat selection based stuff like that. Right. So, you know, airlines funny enough, like making money. So they’re thinking, where’s the next 90 billion and what revenue going to come from? Right. And so they’re they’re looking to these new technologies. They’re looking to these new new ways of personalizing offers. They’re trying to extract more money out of passengers. It’s just the way the airlines are. Why? That’s how I get people pay more. So I think those two might be a pretty good marriage. You know, if I can start to predict with accuracy what you will pay for, even even if something that doesn’t exist today. All right. If I can figure that out, that’s going to you’re going to open your wallet, you’re going to put your credit card in, you’re going to spend more. And that might not be the traditional things that airlines have been thinking about. So it might not be selling you an extra drink on the plane. It might be selling you, you earning triple miles on this flight. Right. It might be, you know, pay this and get something else next time. I don’t know what the answer is, but there’ll be something there that that net you’re willing to pay for that actually isn’t that I’m not the next line. Everyone’s going to be different. So I think having a greater understanding of who the travelers are and what they want, which also includes what they don’t want. Right. Because if we look at ultra premium passengers, the last thing they want is to get an email about sign up to get a credit card. Right. Or if you only five first class and suddenly I an email airline has done this for you for 50 bucks and fly from the city to the city. But I don’t care. It actually disengages me. Right. So, you know, in some ways, learning what not to send people I think is just as valuable as learning what to send people and how to engage people. And definitely at the higher echelon of society, these people tend to not want things. They they’re not going to open the emails because someone else probably the emails anyway. So I think it I think there’s a learning curve that has to come here with travel loyalty programs and it’s about learning what people do and don’t want. And from there I think we’ll be able to figure out what technologies best laid out apply to them, to then figure out how to sort of, you know, extract all from people.
Ashley Coates [00:27:38] And in addition to using these new technologies to offer more personalized experiences and predict consumer behavior, do you see the airlines also using these technologies to change how they operate? And I’m thinking specifically about interactions with travelers, chat bots, things like that.
Mark Ross-Smith [00:27:58] Have you ever have you ever used the chat bot when hello, have you thought that? Horrible. So I really hope that they can start there. You know, I’m pretty old school this stuff. I, I like the romance of travel. I like dressing up Yes. Sunday best on a plane. I like this kind of stuff. And I’m sure as many millions of people but me out there and many, many things that are not I like. Until check in counter. I like putting my passport down, saying I’m traveling to New York. Oh, yes. Let me check you. You know, they bring out the business class tag. They put on your bag, they get the boarding pass. So he’s got a special invitation to the to the lounge today. Top escalators to the right through security on his. George. He’s going to escort you through security to the lounge today because you’re one of that most valuable frequent fliers. You know, I love this stuff. I love the hands on stuff. Where else do you get that? But what other business treats you like that? You know, it’s something special about it. Maybe I’m old school, you know, but I kind of like that. I don’t see a lot replacing that. I don’t see II replacing that yet. Just because it’s a human interaction. You know, if there’s a robot that comes up to me and says, There’s the roast beef, I will take you to the lounge, blah, blah on Concourse A. It’s going to be cool the first time. But you know, there’s something special about a real person and having a real conversation. I click story. I recently was flying out of a condo in Malaysia and I was flying Emirates and I was walking to the first class checking out of there. And the lady from the airline runs over to me and like way before the cab like this in the middle of the airport. You guys are you. Mr. Smith? We’ve been expecting you. Okay. I’m the one special. I’m a meteor member. I’m no one important by any means. She’s like, Let me take you back. Okay. Hot. And I’m a tall guy. I’m six foot six. I go to the gym. I’m very capable of carrying bags and navigating through an airport. And here’s this tiny little Asian woman strapped on my bike trying to take the camera. You know, my point is that human interaction, I think, is something special. I think it’s something special that travel industry has going for it. And in my view, I think it should embrace it. I think it should double down on what it does best, which is human interaction.
Ned Hayes [00:30:22] Yeah, human interaction, I think is going to be something that changes in the future as people start using all these different technologies. Right. So I know you talked about human interaction is really driving engagement just now. Your example being really engaged made a difference. So I’m curious if there are other innovative marketing techniques that you’ve seen that’s really powerful.
Mark Ross-Smith [00:30:46] I think airlines especially are in this unique position where they capture your attention, right? Because when you you find out like you’re traveling somewhere, you go to an airport, Right? They’ve got you at that point, right. You know, at home on your computer and got like you got about 50 chrome windows open at any one time. Right. My attention is really not only one of them. Right. But stuff happening in the background and stuff, Senator floats in and out of, you know, what you need to do during the day. But when you’re at airport Jordan Airport. All right. You’re there. Right. A lot of people sort of disconnect from reality. That point, they turn off their phone. The tone of the computer, I think, is a lot of opportunity for airlines to, I think, doubling down on the human interaction. I think that’s that’s a actually powerful point because you’re thinking a little differently at that point. You know, people are still in their phones, in the cell, you know, doing that stuff in the airport. But there is something a little different now that they’re kind of open to new ideas that open to new things because the traveler traveling is really quite magical when you think about it. Right. And as it always has been. And I think that magic event call that a lot comes opportunity. And I think airlines are really only just starting to understand the real power they have, the influence they have over people. When people are in this, you know, heightened senses that they’re excited, you know, like we know that people in airports spend more just on just nonsense stuff. You know, I need to buy the perfume. I need to buy the book to how much balls of water cost an airport? Astronomical.
Ashley Coates [00:32:18] Yeah, they do.
Mark Ross-Smith [00:32:21] Like if if you’re willing to pay 15 bucks for a bottle of water at an airport. Right. Like, what else are you willing to do? That’s a good question.
Ned Hayes [00:32:29] That’s a great question. What else will you do for me? Right. So right now, with that mismatch and with everything happening with airlines, we’re in a shift out of the pandemic towards some positive things. And also some, as we talked about, the the tsunami of loyalty engagement kind of ending for some people and changes happening. So let’s look out 5 to 10 years where things are going to be going. What does the future really look in this domain?
Mark Ross-Smith [00:32:59] Yeah, really interesting. If you look at the last five years and then try and use that to project them the next sort of five years, I think it looks pretty dark to be honest. Maybe some of give it two answers. I, I, we would answer bus with that my look at last year’s then check that forward I think will be mostly the same. Some part of me thinks we could be in the same place we are now if not worse. Right. Think about what travel looks like. Today. Let’s compare it to 20 years ago, just for fun. You know, it takes more time to get through airports now, right? There’s more processes, more paperwork, There’s more security stuff happening. Right. There’s new sort of machines that detect metal on you and all sorts of stuff. So has the experience really improved all that much if we look back and compared today? I really don’t think so. Not not that much. So that’s that was a dark aspect. But now I’m an eternal optimist and I like to think that, you know, hard times brings out the best in humanity. You know, can and can kind of like, you know, fires the birds down and it really grows sort of stronger and that kind of thing. Right. You know, this what nearly 100 airlines started in the last couple of years? You know, I think what we’ll find is that combined with banks waking up and realizing how valuable our multi programs are and that value is underpinned by the product that they have, which is credit cards and the money that comes from that. So I think new airlines plus banks are realizing how actually make them less. So the airlines these days I think is a bit of a power shift that’ll change that. I think we’re going to eventually five, ten years. I think it’s going to be more about customer service and customer recognition again and less about points Miles.
Ashley Coates [00:34:45] Well, Mark, thank you so much for joining us today. Your insights are just so fascinating and just yeah, it’ll be interesting to see what does happen in the next 5 to 10 years. We do have one last question for you, which is what do you want your legacy to be? What would you like to be remembered for?
Mark Ross-Smith [00:35:02] Travel is magical, and I think we all remember our first big trip somewhere. You know, first time we’re on a plane. First time we went to Disneyland or somewhere like that, you know, when we were young. Right. I think if I can light up a small corner of someone’s world by creating more of these magical moments, I’d feel like my job is done. I could sleep pretty well for a lot of nights knowing that I’m just making life a little brighter for a few people in a little way. You know, the first time you have a gold or platinum stars, when they align, you go into the lounge for the very first time and you realize everything is free. And you see that thousand dollar bottle of champagne? That’s right. No allowance caveat. You know, all your boarding a flight and they take they call, you know, call you to the front of the boarding line and you just waltz past 300 other people. You know, there’s this a small moment there that sort of goes through your mind and goes, oh, this is that is thing. This was all worth it. This is really this is the feeling, right? The feeling lasts about 5 seconds and then it sort of goes away. And then, you know, you’re back at the back of the aircraft again. I think these kind of small magical moments, I think the world needs more of these, especially in travel. And, you know, if I can help create products that bring these small moments that bring joy to people’s lives through travel, I think I’d be pretty happy with that.
Ashley Coates [00:36:21] Thank you.
Ned Hayes [00:36:22] Thanks so much for your insight and advice here. I’m really interested to see where the loyalty the street goes.
Mark Ross-Smith [00:36:27] Been great to chat. Thanks, guys.
Ned Hayes [00:36:29] Spark Plug is a wholly owned property of SnowShoe. Copyright 2022-2023 Spark Plug Media.