Blind Loyalty Challenge with Sebastian Huschner

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Hi there, I'm Amanda Cromhoe from Truth. Welcome to the Blind Loyalty Challenge

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. We interview

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world experts in loyalty blindly. We're hoping to create insight, spontaneity

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and a lot of

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fun through the challenge. The challenge is about promoting the Blind Loyalty

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Trust and

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my book called Blind Loyalty, a 101 loyalty concept radically simplified. All

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profits from

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the book go towards the trust. We hope you enjoy the Blind Loyalty Challenge.

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So hello, Sebastian. We have Sebastian Hushna, who is the product strategy lead

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for customer

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loyalty at Linga. So Sebastian, how are you today?

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Yeah, Amanda, thanks for having me. I'm very well. How are you doing?

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Great. I'm good. I think we need to let everyone know for the Blind Loyalty

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Challenge that

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we actually considered doing this live after the International Loyalty Awards

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dinner and

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we actually thought better of it at the time.

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We thought so, because it was nearing midnight, I believe, on that day. So we

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thought we have

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a bit more of a relaxed time zone to choose from and do it virtually instead.

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But yeah,

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I do. I think it's a bit more controlled now.

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I would think so, yeah. So good idea. Thanks for having me again.

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Yeah, wonderful. So because you are obviously in the depths of airline loyalty

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and a project

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very dear to my heart was the launch of One World many, many decades ago when I

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worked at

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British Airways. So I wanted to ask you, what is the power of global alliances

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for the loyalty,

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industry and FFPs and airlines?

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Yes, I think overall from a customer perspective, it really offers choice. It

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really offers

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the ability to use different carriers, take advantage of frequent flyer

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benefits, but

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also align when it comes to different partnerships for underground or wildst

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flying when using

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carriers that belong to an alliance. It can really make a difference for

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customers of

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who to choose, who to fly with and hence from a customer from a loyalty angle

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and from an

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airline perspective, it really drives that additional revenue because customers

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may choose

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you over another and are more than happy, especially if tier credits are

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involved to

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choose you over a competitor. And I think that's a powerful tool that we're not

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just

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seeing in One World, we're seeing that across the Star Alliance or as well, the

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Sky Team

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Alliance as well and the ongoing enhancements and the ongoing changes to

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memberships or

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adding new members to the alliances really show there is power in it and there

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is additional

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revenue in it from an airline perspective to continue to invest in those. And I

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feel

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like based on what we're seeing where the airline industry is evolving and the

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importance

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of loyalty as a result of it, the strategy seems to be paying off.

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I think as a user of airlines, I think so many people listening to this will be

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, I personally

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find the tier credits across the alliance carriers the most important. It's

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almost like

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the mileage points are given, I'll get that on whichever airline I choose, but

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those tier

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credits really count. If I'm trying to climb the tiers or maintain my tiers, it

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's a really

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powerful tool to choose the airline within your own alliance, your preferred

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alliance.

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Yeah, and that's true. And I think Amanda, that's where more work needs to be

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done.

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I think we made some good progress within One World. But yeah, it's only

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recently that

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it was introduced for Ellingus for example, and that reciprocal tier credits

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earn as possible

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between British Airways and the Ellingus carriers as well. So I think as more

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alliances are

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fetched and in our case, it's the avios currency is the sort of loyalty

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currency that members

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really care about. But at the same time, it would probably drive even more

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revenue and

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potential uplifts to the alliances and airlines. If the alignment on tier

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credits can be supported

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as well from some of the other people that you interviewed before, status is

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what members

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really care about and what really gives you their additional benefit over your

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other frequent

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passengers or frequent flyers as a menu traveling across the world, outside

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your own home market

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and preferred airline choice, I guess.

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Yeah, and I don't know if you've read Alchemy by Rory Sutherland, but he states

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in there

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that as a passenger, if you're not flying on your preferred airline, or if you

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're not

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a member of the FFP, he naturally feels 30% more nervous than that before he

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flies. And

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I think that is that status, whether it's a high status or just a recognized

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status gives

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you that reassurance that if something goes wrong, I'm going to be OK. But yeah

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, we're

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all chasing that same status. It's definitely coming through in consumer

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feedback as well.

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Yeah, probably not so much within probably the main carriers of IAG, I would

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say, but

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that's probably because I'm probably closer aligned to it. But that sort of

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nervousness

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is definitely what comes through in user research and verbatim that I certainly

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read on frequent

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flyer forums. Yeah, yeah, absolutely. Well, let's stay in the

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frequent flyer arena because you are part of an airline. So in chapter 76, we

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unpack

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frequent flyer loyalty in the FFP. So what, in your opinion, is the one thing

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airlines

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need to get right to make their FFP as compelling as possible.

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So I think that the topic has always been around how do I onboard customers?

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How do

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I make it easy for them to join? How do I give them a reason to become part of

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my program?

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I think that the COVID pandemic has shown us that just by focusing or putting

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your eggs

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in one basket and getting your members to fly may be a risky strategy,

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depending on

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the sort of wider outlook and where the world has been back in the day. And I

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think the overall

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focus of having a proposition that not just works in your home market, in the

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air, but

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also on the ground is something that not just alliances, but airlines and

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frequent flyer

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programs in itself have been focusing on a lot more strongly and a lot more

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heavily

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and will do so in the future. I see a lot of movement when it comes to

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representing your

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brand and allowing your members to potentially and tier by not flying by just

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using a credit

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card and purchasing with partners that are on the ground will sleep over around

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town,

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shall we say. And I think if that sort of ongoing collaboration, not just from

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a retailer,

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but also from a financial services perspective, if that continues to grow, then

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there might

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be an ongoing and we already see the start of that shift towards that I can

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actually earn

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my status and I can continue to earn it and the airline is happy for me to earn

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it on

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a mixed behavior or purely on and on the ground behavior. I think that that's

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important when

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it comes to the sort of loyalty and how we need to get it right as a program.

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The second

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bit I would mention there Amanda would be how do you stick true to your brand

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and how do

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you represent it with every customer interaction. And I think what is very

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often overlooked

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is the sort of customer service aspect and how difficult it is for members to

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really

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solve very simple queries. And I think new tools such as generative AI, for

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example,

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can really help us in order to identify what is the customer need when they

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contact us

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in the first place, which may or may not be voice. And how do you hold to your

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brand

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promise when you help the customer that has been disrupted versus somebody that

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probably

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just needs to read an FAQ. And if you overlay that with your sort of in the air

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and on the

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ground partnership proposition, and then I think these are areas that should

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receive

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continued focus and investment across the loyalty industry.

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Yeah, lovely. I love that. I love the tag there on customer service. So

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fantastic.

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So my last question is one of the areas that has the biggest frustration for so

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many members.

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Chapter 58 in blind loyalty talks about the expiry of points. What is your view

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on points

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expiry?

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Yeah, you get a loyalty view. And then I think you get a seat on the news,

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which I think

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you have had in the past and on the show as well. So I think from an expiry

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perspective,

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I have worked with carriers that operated a no expiry policy, but also with

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carriers

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that operate an expiry policy. I think expiring points is probably more the

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norm these days

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in loyalty programs. And it can be hugely frustrating. And for members,

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especially if

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they are not being made aware based on the behavior that they show or display

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to the

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airline, which may or may not be regular. I think from a financial perspective,

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expiring

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points make sense from a customer perspective is exactly the opposite. So I

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think if I want

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to work with my finance team, I would always look, well, what can I do in order

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to warn

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members or include expiring messaging accordingly as part of my customer lif

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ecycle messaging.

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And I think if I only start a month in advance, I'm probably a little bit too

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late. So I

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think when I introduce messaging that maybe start six months out, or if I give

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members

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opportunities to use more balances and share them a little to no cost with

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fellow members,

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fellow friends or family members, I think that is something where we can

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actually address

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the challenge that will always come back from a financial perspective, where

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literally if

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we don't expire, then we have them on the books. And that's that's not good

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either from

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a balance perspective for us.

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I think my take on would be if the sort of financial department is really

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adamant about

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it. And we can certainly see that probably in the majority of the schemes that

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I'm aware

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of, we should probably think about what can we do from a customer perspective

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to prevent

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the negative experience and that I don't want to engage with you again, moment

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of truth

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that may not come once you're smaller or sometimes bigger balances expire.

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Yeah, I think it's probably the most emotive subject in our industry around the

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difference

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between the internal struggle and the external customer expectations. So thank

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you for acknowledging

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that. So I saw earlier when I started asking questions that you're proudly

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supporting your

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blind loyalty bracelet. So thank you for still wearing it many, many weeks

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after we first

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met. So great, great support of blind loyalty. Thank you, Sebastian. You came

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through in

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flying colors, airline colors, excuse the pun. So who would you like to tag to

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take up the

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blind loyalty challenge next?

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Okay, good question. I think I would go with Dan Martin, who is the head of

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loyalty at

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Riyadh Air carrier and that we're all looking at with extreme interest and

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digital first

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carrier. It is not flying yet, but I'm really sure Dan will be a good interview

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ee and to

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share with us his insights over many years of loyalty experience.

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Wonderful. Thank you. I don't know Dan, so I look forward to the introduction.

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So great.

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Sebastian, thank you so much. I'm glad we recorded this in a controlled

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environment rather than

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live from the international loyalty awards last year, months ago.

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Sounds good.

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Thank you.

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