0:00 On sponsoring the Olympic Games and offering members 'money can't buy' experiences • 02:15 Providing a continuous customer journey • 03:15 On new features and staying ahead of the competition • 06:30 On strengthening the partnership ecosystem • 09:35 On sustainability • 11:50 On key focus for 2025
GLO
- 0:00 On sponsoring the Olympic Games and offering members ‘money can’t buy’ experiences
- 02:15 Providing a continuous customer journey
- 03:15 On new features and staying ahead of the competition
- 06:30 On strengthening the partnership ecosystem
- 09:35 On sustainability
- 11:50 On key focus for 2025
Transcript
GLO: It’s especially exciting to see you at WAF Amsterdam after the completion of the Paris Olympic Games. And congratulations. Air France was the official airline of the Olympics. How did you approach the strategy? Were there any new campaigns or features that you rolled out to your loyalty members? Can you share it with us?
Ben Lipsey, Air France-KLM: The Olympics were a great success for Paris, France, and Air France as the official Olympic sponsor. We decided to trial an interesting campaign we’d never done before: using your miles for things beyond travel. We already offer things you can buy at our store. But what we’ve never done is sell experiences. And what we did was we had quota tickets, and we offered them to our members. Starting with our top tier members, we asked them: “Do you want to use your miles to buy tickets?” And they sold out in two hours. So, we provided a way for members to engage with the airline, in this case, our French-based members, and they were able to buy the tickets with their miles. This was a good experience for us because next year, it is our priority to further develop that experiences platform. We see this in some loyalty programs, and I think it works quite well. How do we leverage the relationships that our airlines have? Take Air France-KLM for example. Air France is a partner of the festival at Cannes. If we can say, you can have access to VIP treatment, a great meal from one of our Michelin star chefs that signs our menus on board, a film, etc., etc. And you can use your miles to buy or to bid on this experience. KLM, for example, is a sponsor of the KLM Open, which is a very significant golf tournament in the Netherlands. These are the kinds of things “money can’t buy experiences” that we would like to be able to offer to our members with their miles. And this was a great example of what we could do with the Olympics. It worked well, and it was proof of concept. And we’ve said, “Okay, this works, and we’re going to further invest in over the next.”
02:15
GLO: At one of the presentations here at WAF, the Head of Air France Lounges highlighted that Air France-KLM is actively rolling out lounges, including low premier service. For some of the services, you can bid miles and spend miles, but it’s really connecting very nicely the traveling experience with the actual VIP event. So, I think that you’re managing to build a very nice, continuous pleasure and delight moment for the customer.
Ben Lipsey, Air France-KLM: On the Air France side, in particular, because many of our international lounges are branded under the Air France brand. We just opened one in LA, for example, with a dedicated area for our premier customers, as well as our Flying Blue Ultimate customers, because we see that members love that kind of travel experience. It’s not just on board. It starts on the ground. It starts before you check-in. When we can offer these touch points to customers in the app, showing them where to go with their airport mapping feature, we also have Air France press, free to our top-tier members, and they can read all their magazines and newspapers on the digital app. When they get to the airport we have, of course, our Sky Priority, which is available to our top tiers and business class customers. And then, of course, the lounge. It is, like you say, that kind of continuous customer journey.
03:45
GLO: Congratulations on the recent win of number one on the best loyalty program.
Ben Lipsey, Air France-KLM: Thank you so much.
GLO: Obviously, these are all the features you are adding that are coming to fruition. What’s in the pipeline for you, and what are you planning for 2025?
Ben Lipsey, Air France-KLM: First, thank you very much. We were named the Best Loyalty Program in the world. There were about 60 different airlines that were evaluated on a data-driven approach, and we were pleased to be named number one. But we’re not resting on our laurels. As you say, it is a very competitive industry, not just the airline industry but also the loyalty program industry. We know our competitors are doing some really interesting things. So, we can’t just take that for granted. We have to continue to improve and continue to focus on increasing and enhancing our member experience. So, even just a few weeks ago, we announced new benefits to our Ultimate members which is an additional piece of baggage. We’ve also announced a free same-day change so that our Ultimate members can change their fight if they finish a meeting early, for example. For us, the question is how do we continue to monitor the industry and continue to find things that we can offer to our members that we can support in a sustainable and durable manner so that it’s not something we then have to take away at a later stage. We continue to make our loyalty program the most rewarding, both in terms of benefits that you earn for your status, as well as on the redemption side, having a program that is attractive in terms of the number of miles you need for a ticket. So, we are constantly looking at, for example, the pricing to say we have awards that start at just 5000 miles. We have our promo awards every month that target certain destinations, and it’s among the best prices in the industry. We introduced a family program a year or two ago where kids under 12 get a 25% discount on any tickets, including the promo awards. And for us, it’s to say “How do we respond to the needs of our members every day? How do you know with members that the demographic is changing?” We just announced that as of next year, Air France will be introducing Starlink Wi-Fi, which is free for everybody, assuming you have a Flying Blue membership. We expect significant engagement and new enrolments from onboard when our customers are flying. KLM has not yet made the decision, but we hope that that will also be in future plans as well. And then, like I said, it is continuing to ensure our reward prices remain attractive. It is almost a form of currency, where people are saying, “I’ve saved up all my miles, and I want to be able to redeem for an award.” And if our prices are too expensive, you lose that emotional trigger, because if they say, “Well, I’m never going to be able to afford it” at some point, they’re going to say, “What’s the point in continuing to earn Flying Blue miles?” And that is what I don’t want them to say. I don’t want them to make these calculations. I don’t want them to say, there’s no point. Because, to me, that’s a knife to the heart as a loyalty program manager. So it’s to say, how do I remain attractive, both of those who fly once a year and those who fly once a week? It is about how do we remain interesting, attractive and relevant for all of our members?
06:30
GLO: Flying Blue and Air France are strong brands with an ecosystem of partners. What’s happening on the partnership side, on the co-brand side? In Amsterdam, you see the KLM partnership with Uber advertised everywhere. I think Air France has a similar product. What are you looking at as the next step?
Ben Lipsey, Air France-KLM: So partnerships is an interesting topic too. I was on a panel earlier, and I had a very similar question. For us, our value proposition as a product, as a loyalty program, is always going to be linked to travel. We see a lot more focus on minimising your carbon footprint and being more environmentally conscious. And I applaud all of these things. We offer many ways to earn and spend miles outside of travel. But the value proposition, what makes us attractive, is the ability to fly, see the world, and connect with new people in different countries. I am Canadian, and I live in Europe. My family is 10 hours away. That need, and that desire to travel has not gone away, nor do I think it will go away. And I think that’s that emotion that we bring, unlike a loyalty program of a grocery store where you might say, five years at the grocery store, that’s great, and that has its place, but it doesn’t make you dream you might not go out of your way to go to this particular grocery store, whereas we hope that because you like the service on board that we offer, the destinations that we serve, and the products that you will go out of your way to fly on Air France or KLM and make these kinds of irrational decisions as we call it. I think that’s where the partnerships come in handy. Because, we want to have the ability for members to earn on their everyday purchases. So, Uber was a good example. We just went live with them as our ride-share partner. You can earn miles on trips you take in the Netherlands and in France, and our home markets. And then you can redeem your miles, of course, on our touchpoints, whether that’s for travel or our store where you can buy an iPad or anything you want. So, we give members the option to do different things with their miles. And then on the environmental piece – because I do think it’s important, and I do think it’s relevant to bring this up – we are one of the most advanced when it comes to that, which I don’t think people realise. We’re one of the first to give unlimited amounts of status currency, what we call XP, for engaging with SAF or sustainable aviation fuel, or sustainable NGO partners. So, if you buy SAF as part of your flight checkout experience, you earn XP. When you donate your miles to a good cause, such as the Red Cross or any one of our NGO partners, you earn XP. Why do I bring this up? Because if, for example, you have to earn 100 XP to earn silver, or, you know, 300 for platinum, for example, the more XP you earn by offsetting, by buying SAF, by donating your miles to charity, the less you have to fly. So we are literally putting our money where our mouth is. We have customers who earn status almost exclusively through their contributions to SAF. So if that’s something that’s important to them, we reward them for it. Not a lot of other airlines I can think of do that to that extent.
09:35
GLO: You were definitely one of the biggest and earliest enthusiasts of sustainability, connecting sustainability and loyalty. I think it’s a year since you introduced some of the features. Do you see a good pickup from the customer base?
Ben Lipsey, Air France-KLM: It’s an understatement. When we first introduced this XP for SAF, we saw an 800% increase. And, yes, I think some of it is because we were starting to reward them for their decisions. There are people who are going to do this because it means they don’t have to fly as much, which is also good for the environment. On the other hand, we had people who would add an extra connection just because I wanted that extra XP, which was not great for them, obviously not great for the planet and not great for us, because we then have to prorate the revenue for that flight, for their whole journey. So, it was a lose-lose by introducing the XP for SAF. It’s a product for which we make no margin. So it’s purely an investment in sustainable aviation fuel, which is, from an industry perspective, the next big thing, but it’s also quite an expensive undertaking. Air France-KLM buys the most amount of SAF out of any carrier in the world. Anywhere, we buy 17% of all SAF produced in the world, and it is unfortunately not enough to compensate for airline needs. So we’re trying to encourage our customers to come along with us on the journey. When we introduced this, we saw an 800% increase in people participating, which means more money is being invested into SAF. It means they’re able to earn status through this and by helping with their green decisions or their sustainably focused decisions, and not by flying. So there, it was really a win, win, win, and that’s what we saw. It was a significant uptake, and we continue to choose to see great performance on this. And I’ll just mention – not taking a shot at any of my competitors – some of the other loyalty programs have introduced a green tier. Quite frankly, I think that’s greenwashing. There’s an airline in particular that I’m not going to mention, but you earn miles for installing solar panels or buying an electric car. Well, that’s great. It encourages, I suppose, the right decisions, but it has zero link to aviation. There’s a zero link for the airline having to put their money with their mouth is and reduce their carbon footprint. Whereas what we’re doing is we’re saying we’re actually incentivising numbers to fly less. And no other airline I can think of does that.
11:50
GLO: The key three trends in loyalty this year were the rise of partnerships, personalisation, and sustainability. If you look forward to 2025, where is your key focus, and where are you putting money to work?
Ben Lipsey, Air France-KLM: It’s a good question. We have a lot of projects in the works. I think anybody who works in loyalty understands sometimes the IT roadmap is a lot longer than we care to admit. All are competing for the same resources. I think continuing to invest in partnerships is a big one for us. We have a couple of new, exciting partnerships, as well as products in the works in terms of helping you earn more miles, helping you use your miles, and engaging with partners directly so you can earn and you can double dip.
We launched Flying Blue+ a little while ago, where at certain merchants, you can earn or burn your miles directly in the merchant’s checkout flow. Many airlines will have shopping portals where you have to log into the airline’s website, click on the link and then, with cookies, it tracks you. It’s a bit cumbersome. And with more and more focus on data privacy especially in Europe, it’s not a model that I think can last in the long run. Whereas our partnership with Pointspay, which helps us with Flying Blue+, it’s a solution that integrates directly with the merchant’s website so that you can pay with a credit card, PayPal, or Pointspay Flying Blue+, for example. It allows you to earn miles from the merchant directly, credited instantly, rather than having to wait a few weeks. If you have a co-brand, you can double dip, and you can earn miles as well. So we are going to focus on trying to increase the merchant network that we have participating, and we have some additional focus on data and personalisation via CRM. It is still kind of yet to be fully worked out, but the exciting thing, I think, from a loyalty program perspective, and certainly from a GDPR perspective, is that it’s very legitimate data. You, as a customer, choose to share your loyalty number with us. So, it’s not us tracking you in some kind of weird, creepy way. You choose to get my points and choose to share your data so that we can offer you something. And when you think about all the data an airline has access to – We know all of your past travel trends: How far in advance do you book? What cabin do you book? How many people do you normally travel with? How far in advance do you get to the airport? Do you stand in-line? Do you go to the lounge? What do you use your miles for? We put all this together. I can then say, I want to shoot you an offer that is relevant to you, rather than saying if you’re flying business class all the time a €99 ticket might not be most relevant to you and vice versa. If you’re only applying on Transavia, which is our low-cost arm, a discount on business class is probably not something that you’re going to be engaging with. We want to make sure that you as a customer are seeing the most relevant offers, and that we have partners that are relevant to you. And like I said, whether it’s experiences that you might be interested in based on things that you have indicated that you have interest in, like the film festival in Cannes would be perhaps something that would interest you. So how do we then leverage that data to help offer you something you like and then continue to focus on ensuring our program is attractive to members and that the benefits are worthwhile? There are a few projects we have in the works there as well. So, we hope to release those throughout the year 2025.
Souce: GLO
