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First Customers

The show about finding your very first customers. Learn sales, marketing, growth hacking, and customer acquisition strategies from real entrepreneurs and sales experts. Building a business that solves problems and creates jobs makes the world a better place. But it all starts with finding your very first customer. Hosted by Paris Vega, a digital marketer and entrepreneur with 20 years of experience.

Mark Ross Smith, CEO & Founder of StatusMatch.com, revolutionized the way airlines run their incentive programs for frequent travelers. Through Status Match he’s brought over one billion dollars in new customer value to major airlines, like Emirates, Lufthansa, Air Canada, Frontier Airlines, Spirit Airlines, and more.

Paris Vega (00:00):

Welcome to the First Customers podcast. Today we have Mark Ross-Smith with us. He’s the CEO and founder of StatusMatch.com. His company has brought over a billion dollars in new customer value to major airlines like Emirates, Lufthansa, Air Canada, Frontier Airlines, Spirit Airlines, and more. So Mark, welcome to the show.

Mark Ross-Smith (00:25):

It’s fantastic to be here. I’m actually very excited to talk about airlines and customer acquisition today. Got some good stories.

Paris Vega (00:31):

Cool. Well, let’s get into it. How’d you get your first customers for StatusMatch.com?

Mark Ross-Smith (00:37):

So we launched this business in 2020, which is probably the worst time to launch an aviation related startup in the history of humanity.

Paris Vega (00:51):

Right.

Mark Ross-Smith (00:52):

The logic was, as three of us had founded it, all three of us had worked for airlines in management roles. So we understood the industry a lot. And loosely the logic was in 2020, airlines were in a world of pain. They’re all just bleeding cash like crazy. It’s like, how can we help the airlines come back, accelerate their recovery faster? And we thought, what’s the one thing that when we worked at we wish someone had pitched us as a product and Status Match as a concept, that’s what we wish people had pitched us. And that’s what we created. I’ll get to that in a second, but how we got our first customer specifically in the years prior to that, I have a blog, Travel Data Daily.com. It’s free, it’s just thought leadership kind of content, right?

Paris Vega (01:43):

Yeah.

Mark Ross-Smith (01:44):

So I was publishing stuff based on a previous business I had, which was in Telco social network that I had an exit from. And I was thinking there’s all these great things that Telcos are doing to make money out of customers, and I thought airlines could learn from this. There’s a bunch of things. So I started basically just blogging it online. Hey, you could do this. Hey, you could do this. You could sell this data, you could… this kind of stuff. I started getting a lot of attention. So when we launched this business, I was, like any ultra tech guy, I’ve got an email list because I’m sending out emails every time there’s a new post and I’m stalking about email. Who’s opening the emails? Who’s clicking the emails? And there was one particular employed in airline, Tommy Langhauser at Frontier Airlines.

(02:32)
He was opening all the emails, which means he was reading, which means he is seeing my name, right? I’d never met the guy, and if you’re listening, Tommy hi. And never met him. And I forget he’s reading my content, so at least knows that I’m not an idiot, right? He knows I know what I’m talking about. I talk about airline loyalty, monetization, commercialization stuff. So I hit him up and I said, “Hey mate, you read my content, got this great idea, we’ve got a prototype, do you want to try it?” And he said, “Not really.” So a couple of months later what that had done, that had sowed a seed in his head, right? Because airlines, they’ve got a million different things going on at one time, and when something becomes a priority, it’s ultra urgent for them. They bring out their little black book and they go, who can I contact to help me get this online right now?

(03:33)
And it was one of those moments. So he had to get something online in customer acquisition, who do I call? Oh, this Mark Guy. He’s pretty intelligent, not total idiot. So I’ll contact him. And from there it moved extremely fast. And so I attribute… So our first to B2B customer was Frontier Airlines. Again, this was the end of 2020, the worst time in history, middle of the pandemic. They were looking to acquire new customers to fill planes, just to keep the airline going really, because there’s a lot of folks just not flying. So traditionally getting airlines as customers is extremely hard. I know companies where they’ve got a six to eight year pipeline… sales pipeline just to get these brands on board because it could be really difficult. And yet it seemed to be almost too easy for us. It just came magic. It was, I want to say a few months maxed between idea building something and then having a prototype and then signing a contract with him and going live.

Paris Vega (04:38):

Wow. Okay. So what was the specific thing that he called you about to solve?

Mark Ross-Smith (04:45):

So he wanted customer acquisition. I’ll give you the one-on-one what the status match is. That’ll give some context here.

Paris Vega (04:55):

Yeah.

Mark Ross-Smith (04:55):

So status matching as a concept has been around for about 35, 36 years and what it is, so imagine you’ve got a silver, gold platinum status with an airline or a hotel, right?

Paris Vega (05:07):

Okay.

Mark Ross-Smith (05:08):

These people represent about 5% of an airline’s database, but about 30 to 40% of total revenue for an airline. So they’re the single most valuable customers an airline can have as an aggregate group. Airlines, funny enough, want more of these customers. These people fly business class, they’re in a high yield economy class, Cameron. They spend more and they spend more frequently. They buy all the ancillaries during the airline lounges. They get the credit card, they’re doing all the right actions. Airlines want more. So status match is the cheapest, fastest way for them to get more of these customers.

(05:49)
The idea is let’s say you have a gold or platinum status with say American Airlines and Frontier Airlines wants you to try them out. So you’ve got status of American, you like flying American, great airline, you like the lounges, you like the boarding experience, the food, the miles, all this kind of stuff. You have no interest in flying Frontier Airlines at all because you are hooked on American Airlines on the alliance. It benefits all the perks you get. So the way to get you to try a new airline, Frontier dangles his little carrot over here and says, “Hey, we’ll give you the equivalent status you have with American over here, Frontier, straight off the bat. You don’t have to fly at all, we’ll just give it to you. So here’s a gold equivalent with us.” You’re getting it now Status Match yet? If you’ve got status on airlines, status drives behavioral change in people.

(06:46)
Status actually outside of airlines, why do people buy fast expensive cars? It’s a status thing. It’s not the most efficient way to get around. Definitely not. It’s a status thing. You look good, you feel good. Same with airlines. When you’ve got that gold or platinum status, you’ve got on your bag tag, people see it and go, “Ah, you’re a platinum member, you’re cool. You’re better than me.” So this, we laugh, but it drives billions and billions of dollars of airline tickets worldwide. So it’s the cheapest, fastest way for airlines and hotels to acquire new high value customers. So instead of them corporate sales teams doing dinners and drinks and dinners and drinks, dinners and drinks all the time, trying to schmooze people into flying them or running Google AdWords or any kind of digital marketing offering a status match is by far most effective way to do it. And so we basically built a process around that, a structured process to put people through to help airlines acquire these customers.

Paris Vega (07:54):

Okay. Now I see the genius of it. That’s amazing. So does that mean that you can build up status across all the airlines or is it like you have to switch and officially say, “You’re my new official airline I’m going to choose. And so all your status stuff comes over at that point?”

Mark Ross-Smith (08:15):

You could just pick and choose. So you keep your… in our example, you’ve got your American Airlines platinum status and then we come along and say, “here’s Frontier or maybe Spirit Airlines gold status.” And these two airlines are very different. Your experience with American Airlines and Spirit, or maybe they’re not at all these days, they should be very different. So you would keep your American Airlines platinum status. So you keep doing that. I mean, you have to keep flying to keep it or spending to keep your status with American. And with Spirit, the idea is, here’s your gold status, try it. Just try the product. Just take a flight, see if you like it or not. If you do, come back again and again and again, again. Maybe you just keep it in your back pocket just in case.

Paris Vega (09:02):

Yeah.

Mark Ross-Smith (09:02):

And generally you get it for a year, and within that time, you’ve got to re-qualify on merit to keep it yourself as per whatever rules that program would have. So it’s brand introduction for the airline.

Paris Vega (09:16):

Got you.

Mark Ross-Smith (09:17):

How else is someone like a Spirit or another airline, how else are they going to unhook folks from the brand that they’re really tethered onto? Because if you are flying a big legacy carrier, there’s a process. You know how things work. You know that on a Friday night when you’re flying home, Judy at check-in’s going to check you in and she’s there with a smile and say, “Welcome back.” There’s this process. You know what aircraft you’re on, you’re in seat 5D to favorite, you know there’s going to be three snacks… People like routine. And how do you break that routine? How do you get them out of that routine of talking to Judy at the airport every Friday night to go try a new brand? Status is huge… if status actually drives more customer behavior of airlines than price. So you could say that it’s free to fly this other airline, people still won’t do it because they’re so hooked on their loyalty benefits.

(10:22)
And the logic that folks use is stuff like, “Well, I get lounge act, I can go into the lounge before the flight.” And so people overestimate what they’re going to use. “So I’ll go into the lounge and that’s going to save me 50 bucks in airport food because I’m going to eat all these snacks in the lounge. I’m going to have eight drinks and that’s worth to calculate a hundred dollars to me before the flight and I’m going to get my Miles and I need more Miles because my wife tells me I need to get more because I have to fly to Paris in first class next year for our anniversary.” There’s all these totally illogical things people think and underpinning all that is their airline status.

Paris Vega (11:05):

So how did you and the potential client come to the conclusion that this was the thing to build? Because you said he just reached out about, I just want customers. And you went through a couple of months process of figuring out this idea, I guess you’re in the space, you’re blogging, you have a following, but was this something that you’d been thinking about or what brought you guys to this specific idea?

Mark Ross-Smith (11:32):

So good question. So I’m Australian and 2013, ’14, I moved to Hong Kong. I relocated to Hong Kong and at the time, I was an ultra top frequent flyer with Qantas, Australian Airline. And when I moved to Hong Kong, I asked Cathay Pacific, the local airline there for a status match because the term status match is not a new thing at all. I asked them for a status match and they said no. I’m like, “What? Come on guys.” I’m this Uber top tier over here. Throw me a bone, and I’ll throw you some muddy. Basically I’ll start flying, basically. They said, no. That’s really what kick-started this whole thing because at the time I just sold my business, basically got unemployed at that point. What am I going to do next? I had a bit of money, a bit of time, and that’s what really started the process of, I need to fly cheap. How do I keep status with an airline with our job because it gets down expensive.

Paris Vega (12:37):

Yeah.

Mark Ross-Smith (12:37):

So I started attending a lot of industry events at that time, just paying my way in. I had nothing to sell. I didn’t work for any brand, just to learn why airlines wouldn’t do this, why airlines wouldn’t just freely give out status matches to try and deliver in new customers, especially people that want to engage with the brand. And fast-forward a few years, I ended up landing a job with an airline running loyalty program. Malaysia Airlines and I ran there and turned their first status match above the line status match campaign internally, and it was a disaster.

Paris Vega (13:16):

Really?

Mark Ross-Smith (13:17):

Yeah, we got a bunch of people, but there’s all sorts of issues. It took a long time to upgrade people. It was fraud issues with people Photoshopping and saying, “Oh look, I’m a diamond member with this airline. Give me…” No buddy, you’re not. Microsoft Paint skills suck. Go back and try again. So how long issues with that? And it was just not a great customer experience. So the idea was right, average customer experience. And what that meant is when people think of the brand they were having, probably for the first time ever, they were thinking this brand’s average because they’re not coordinated, they’re not doing things quickly.

(14:02)
And so when I’d left the airline, I thought there’s something in this. There’s something in creating a really beautiful seamless brand onboarding experience for high value customers. If someone’s flying business or first class, they’ve either got a really good job, they’re working for a really good company, all they got a bit of cash to burn, they’re the type of customers you want flying you. Some of these people, it’s like, do I fly first class or private? So for commercial airline, you want them flying, you’re not flying private over here. So how do you again lock them into that?

Paris Vega (14:42):

Okay, so you’ve had that experience creating the first status match incentive program at the Malaysian Airlines. And so was this, years later when this prospect who’d been reading your newsletter or your blog, they reached out to you and you’re like, “oh, I’ve got an idea.”

Mark Ross-Smith (15:03):

Pretty much, yeah. It was a couple of years later. Obviously when 2020 hit, the world changed and some things accelerated and other things put on the back burner for airlines. Generating cashflow was straight to the top of their list. How do we make money? We’ll do anything. We need to save jobs. So a lot of airlines were laying off staff at that point, a bunch, especially in North America, were effectively mortgaging their loyalty businesses. And that’s interesting. The world discovered at that point that some of these loyalty program businesses had high valuations than the airline themselves. So what that meant is the loyalty businesses internally got a lot more power, political clout internally to do more and be more aggressive on partnering with new firms, running new offers, new campaigns, new things to get people interested in the brand people obviously the airline credit cards, you own the American and the Delta, those kind things. Yeah. So credit cards, those businesses of those credit cards are worth phenomenal amounts of money to the airlines. Absolutely extreme.

Paris Vega (16:22):

Yeah.

Mark Ross-Smith (16:23):

It’s like a telephone number with a lot of zeros on the end.

Paris Vega (16:27):

I believe it.

Mark Ross-Smith (16:28):

Extremely valuable. So anything that dovetails into that loyalty business of selling Miles or getting people to fly, airlines get really interested in. And so status match, it wasn’t a brand new concept. You were thinking it wasn’t like some Crypto, Blockchain, Web 3.0, AI solution where it’s a bit of a leap for airlines to do that. This was something they’d already been doing themselves, but not that well for a few decades. And so I talk about how we actually don’t have any… We have no big data, no machine learning, no AI, no… We have none of this stuff. And yet we’ve been profitable since day one. We got a bunch of big airline brands. We’re expanding, we’re doing pretty well. We’re just, because it’s just solving a basic customer need that’s out there. It’s nothing crazy. We’re not reinventing anything. We’re just helping airlines take that baby step in their evolution to engage customers better.

Paris Vega (17:32):

But are you using software, is it actually like a web app that they have to interact with or is that just for getting leads because, I know that you have a website?

Mark Ross-Smith (17:43):

Yeah, I mean, there’s website, it’s a web app. There’s a lot that powers behind it. But no, I mean, it’s pretty sophisticated tech stack there, but there’s no crazy, your 800 servers crunching numbers, doing things at the backend. It’s a pretty straightforward setup, I think. And to be fair, why would you want anything more technical than you needed to be as a startup? It’s hard to justify some of these extra resources. You get all these cloud providers trying to throw free credits at you, approve all your stuff, but then you get addicted to using it and it’s like, “Oh, these bills get pretty expensive.” So I think part of our success is just keeping it super simple, especially on the tech side. Keep it super simple, just do exactly what the airlines need and want. Keeping it fast. And then just a really slick customer experience, really good customer experience is something I think that airlines don’t always get right. So when they see what could be out there, how good it could be, they’re a bit in awe of it. Like, oh, that’s really nice. That’s what our customers want.

Paris Vega (18:54):

Yeah, so you got this first prospect, you’re talking to them and you say, “Hey, I’ll build some software.” Did you have any software experience or did you hire a little team or did they front you some money so that you could build app? Talk a little bit about that, how it went from idea to actual prototype.

Mark Ross-Smith (19:15):

I wish they paid us. Would’ve been nice. We structured something with them. It worked pretty well. Obviously getting a big airline brand as your first client is a big deal as a startup, it’s worth a lot to us. So you do whatever it takes to make it work. And it was people’s next on the line if we didn’t make it work as well. So it had to work, right? We built it internally. It was two of us that worked on it initially, myself and one of our other guys. And that was based off, I mean, years ago, I’d learned, gosh, about 20 years ago now, I got into basic web development stuff. My first job in the year 2000, early 2000, I was an HTML developer.

Paris Vega (20:14):

Right.

Mark Ross-Smith (20:14):

Because if you knew HTML, you were like, if they didn’t want to hire someone that could use front page, Microsoft front page, remember those days? So if you knew actually how to code, wow, man, you were in,

Paris Vega (20:27):

Yeah. You were a hacker.

Mark Ross-Smith (20:28):

Totally. Wow, you’re amazing. So back at those days, I learnt a bit from there and I learned PHP, MySQL, that kind of stuff back then. And it’s like once you think a programmer, it kind of stays with you. And so picking up other languages is a little easier. And so we hacked together our first version of it. It was effectively a white label version for the airline, still online today actually frontierstatusmanage.com, check it out.

Paris Vega (21:02):

Okay, nice.

Mark Ross-Smith (21:03):

And we created that, and it worked, hooked up payments and all sorts of stuff into it. It worked really well. It was fast, ultra success. The airline said, “We need to do this again. We need to do it again bigger.” It was a campaign at the time, “Let’s do it bigger and better next time.” We did exactly that, bigger, better. About a year later for them, we ran another campaign.

(21:30)
So yeah. No, we built this internally, which I think is good because we built it from the mindset of being developers, but also having the experience of working at airlines. So it’s like fair not listening, you’re coding, you’re doing your thing and think, “Hey, what if you could do this or shouldn’t we be checking for this when people do?” You’re thinking these things from a development perspective, but you’re also thinking it from an airline management perspective like “Hey, they would like to see this kind of data, so we should store that as well. We should store this in this other table over here” because these are tiny little things, but you don’t think, but when you’re creating, think about this on the fly, which you otherwise wouldn’t if you specked it out and had someone else develop it, because they would just be, this is what I’m creating and nothing else.

(22:29)
So yeah, it worked out really well with Frontier there, and I mean, it was huge success. They got a lot of great media off the back of it as well. And it was the first time that we traditionally a status match like this said, being free. So the airline would say he’s gold status for free. Go try it. They know you’re a high value customer. We put fees in front of that. So what we said to you is, “Well, we’re not going to give you gold status for free. You pay 50 bucks as like an application fee and then we’ll make it work.” And that’s how the economics of the commercials came into play with the airline and low cost airlines, funny, don’t like paying out money to people. So going to them with a proposition where there was no cost to them to work with us as well. Definitely no cost, no upfront. It effectively means they could acquire new customers, high value customers at no cost, which-

Paris Vega (23:32):

Okay, yeah.

Mark Ross-Smith (23:33):

Pretty attractive.

Paris Vega (23:34):

Can make money directly from the customers, they’re paying you. So you just need the airline to agree to do it with you.

Mark Ross-Smith (23:40):

Yeah, exactly. Exactly. So the airline gets all the upside of these folks. Some of these folks go on to, they get the credit cards with the airline, they spend hundreds, thousand, millions on the cards. They start taking flights with the airline. They try it once, and this is not as bad as I thought. I’ll try again, I’ll take my family next time, and I’ve got to buy the bags and the seats lecture so it gets people into the ecosystem that otherwise would never even think about it at all.

Paris Vega (24:07):

And you guys get basically a one-time transaction fee for just introducing that relationship or do you have ongoing fees per customer?

Mark Ross-Smith (24:17):

Most of the time, it’s a one-time thing.

Paris Vega (24:19):

Okay.

Mark Ross-Smith (24:21):

I mean, we call it an application fee and those fees vary by brands. We work with some brands where we can charge more just because it’s a bigger brand and there’s more demand for it, sometimes it’s a little less. What we have found… Actually this is very interesting, prior to us creating this, status matching as a concept, was free. No one charged for it. It was just, if you want my business, you’ll do it for free kind of thing.

(24:51)
We came along, we put fees on everything. What that made change the dynamic out of everything. Firstly it meant airlines could get real expertise without cash outlay. There’s a model funding, the expertise is coming in. So that’s us. That’s the first part. The second part is the people that were going through a process that were doing this were much more serious customer. So there was a higher quality customer at the airline was getting it at the end of the day. And the third thing, it created a revenue stream for the airline. So some of these airlines we might revenue share in some different ways with the airline as well. So they’re actually getting paid to get new customers.

Paris Vega (25:33):

Right.

Mark Ross-Smith (25:34):

Pretty attractive, I think, for an airline-

Paris Vega (25:35):

Yeah.

Mark Ross-Smith (25:35):

Especially in 2020 when you need cash.

Paris Vega (25:38):

For sure, you’re turning a cost. There’s usually a customer acquisition cost into a new source of revenue.

Mark Ross-Smith (25:45):

Exactly. And a lot of this came, so the book Blue Ocean Strategy, it’s been around forever. It’s a hard read for anyone who hasn’t read it, but really, really good examples of changing the value curve of products and businesses and that’s exactly what we did in this business. We took something that was traditionally free, put big fees on it, and what it actually meant is more people did it. That’s the funny thing, normally free gets volume. No, no, no. Paid actually got more volume. So I was like, how high can the fees go then? Is the high the fee the more you get? It’s totally illogical, but worked out really well.

Paris Vega (26:28):

That’s interesting. Maybe especially it solves a few problems. You reduce spam because you’re charging a fee, like what the logic of what Elon Musk recently did with Twitter for the blue check mark, you got to pay an $8 fee or whatever the fee is now and so it reduces spam and that Photoshopping issue you were talking about because there’s less people who are going to put out that 50 bucks for something that they know that it’s not legit what they’re trying to do. And the customers that are in this target market are people who are used to paying more for higher quality. And so it’s like it almost validates the service and legitimizes it by having to pay for it.

Mark Ross-Smith (27:12):

You get it hundred percent, and when people do pay for it, it’s like Amazon Prime, if you pay for it, you’re like, well I’ve got to use it now. So what happens? You’re sending even more that’s spending unnecessarily, which is, I mean, maybe not good for you, but great for the brand you’re locking yourself in, which is exactly what these brands want. They want that loyalty, whether it’s your trapped is not the right word, but more focused on one brand than splitting your business between two or three.

Paris Vega (27:54):

It’s really interesting business model. So you got Frontier Airlines and so what was your internal marketing strategy for getting new airlines and getting in front of other airlines?

Mark Ross-Smith (28:08):

Good question. We’ve doubled down on content and media. So we rewind to 2020, 2021. I live in Asia, which was locked down effectively, so I couldn’t travel even if I wanted to. It was just far too difficult. So there was no events, so I couldn’t go to these events, speak on stage and how great this is. So it was all webinars, content online, text, videos, LinkedIn. So we doubled down. We just hammered the heck out of content, thought leadership stuff, not setting, very rarely actually selling our product. So if we… in the middle, if you’ve got your product in the middle, we never focused on that, we focused on everything else around it.

(28:59)
So we would talk about why customer acquisition is important or what benefits airlines and hotels had from having more of these customers. What was the impact that had. Never talked about, “Hey deal with us and we’ll do this.” Never that, always about all the other stuff because the thought leadership that goes around it, that’s shareable content. That’s stuff where if you work at a big brand, you could get an article or a video, like a short snippet of video. You could send it to your boss and say, “Hey, check this out,” he’ll watch it for 10 seconds or something like that. Okay, so we had a lot of-

Paris Vega (29:35):

So creating content that solved your customer’s problems, other problems, not just the problem you’re specifically solving, but the problems that your target audience had. You made content around those other things as well.

Mark Ross-Smith (29:49):

Exactly. Never directly about what we actually do though. Everything else except that. But we do everything else and then it fills in everything feeds into what our core product, which is customer acquisition for airlines and hotels. We found that worked really well.

(30:07)
So then obviously when the world opened up, we started sponsoring events, going to vet, speaking on stage, doing a lot of this. We still do quite a lot of it. It works very well. High visibility in the industry, always being there, always being top of mind, top of… So when these brands are ready to do something like this, we are there. We are the logical vendor supplier for them to reach out to and say, “Well, I mean, you guys are,” I mean we are the experts, but “Hey, you guys, you know your stuff, because you’ve been around for so long,” think typical big brand. They’re not always that interested in dealing with small organizations and so how do you make yourself look bigger than you might otherwise be? And there’s the whole fake it till you make it thing. But I guess some doesn’t really apply to us. We got a lot of traction pretty fast.

(31:09)
But, I mean, saying that it’s still a struggle, it’s not unicorns and rainbows got all these brands lining up. I mean, there’s a few but it’s not crazy. So we’ve still had a lot of struggles and this is coming from us as co-founders worked in the industry previously. So if we didn’t have that experience of being in the industry previously, it would’ve been incrementally harder to do this. So I’d interview people that are coming in a little blind to it. It’s an even bigger challenge.

Paris Vega (31:43):

Yeah. Okay, so putting out a lot of content. So content marketing, is core part of your strategy, thought leadership, going to events, sponsoring events. After Frontier, who was the next customer or how did they reach out or did you reach out? It sounds like the first customer is more of inbound and then you guys solve their problem by creating this solution. Is that where most of your customers come from? It’s more inbound to them contacting you or do you guys also do outbound actively aggressively trying to get ahold of somebody at X airline and get a meeting and that kind of thing? Or do you just wait for them to contact you when they’re ready?

Mark Ross-Smith (32:29):

Good question. Now it’s a little both. We’ve tripled down effectively on what’s worked for us.

Paris Vega (32:37):

Okay.

Mark Ross-Smith (32:38):

Because we have a great voice, we have a great brand, great message in the industry. We don’t do hard sales. So events, if we’ve speaking event, we won’t sell our product. We’ll sell everything else except the product that we do. So we’ll talk about how they can do these other things or things we’re seeing in the industry or here’s five tips to do X and none of it will be about our company at all. But what it does, it elevates us and their minds about who we are, what we do, all these great benefits that come along with that. So we continue doing that. That’s great. Yes, you are right. We started doing more call direct marketing, more of a targeted approach. Some of these brands, they work on sales like sales cycles.

(33:25)
So they don’t always budgets available for certain things they’re always ready to work with us. We just want to be there at the right time. We don’t do things like participate in RFPs or anything, not interested in that. Actually, I was on an event just last week talking about this exact topic about other startups and they were sharing experiences of how difficult it’s to sell their product into airlines and how they are handling it. And one of them said, “Mark, how do you deal with RFPs? And I said, “I’m not interested at all of them.” We are the best. And so if they think there’s someone else they should deal with, go deal with them. But we are by far just not interested.

(34:14)
Once you go into that cycle competing with others, if you really are good, you suppressed a bit in what you’re doing. So we try and stay away from that and constantly change and innovate our product. So what we created two years ago is a little bit different to what we do today. There’s been iterations obviously of the software over time, and a lot of it’s actually to make our clients more money, make it faster for them. So I think it’s important for, especially brands in our position, we’re still a startup technically to constantly innovate, constantly evolve the product, not to the point where you’re creating new features and it’s just too much, but to the point where it makes sense for who you’re selling it to. So we’ve done pretty well at that to the original point here about direct marketing, a little bit more of it because yeah, we do more of it now.

(35:28)
It’s a new thing for us because we’ve been so focused on content, content, content that going on a harder sell, flying somewhere specifically for one meeting. This thing is a little bit new for us, but I think it’s worked quite well. We get a lot of catch up our phone calls, it’s like, Oh, I saw you on this podcast, I saw you on this thing. I read your article on this actually just last week. No kidding. This is a real story. Me and my partner, we’re walking out of a hotel in London and we’re getting a taxi to go to this other hotel for a dinner and just a taxi happens to pull up in front of the hotel. This guy gets out and he’s got some bags, he’s clearly checking in, he gets out and the first thing he looks at, the first thing he says is, “Oh, you’re Mark Ross-Smith.” No idea who this guy is. And then he turns to my business partner, he says, “Oh, you’re Phil,” whose my business partner. What the heck?

(36:38)
I don’t live here in London. Just totally random. He goes, “Oh, I’m Ollie.” His name was. I work with… I do this. And this hotel was quite a few blocks from where we were going for this event. So it wasn’t like it was the closest place or everyone was there, and I thought, “Oh, this is nice. This is all that getting real life recognition for all the content and all the stuff we’re putting out there.” I’d never met the guy. And we’re seeing a few of these loops closing like that where people come up to you and say, “I read this.” “I saw this.” “Oh, I liked how you did” these kinds of things. And so that’s evidence to us that has worked.

Paris Vega (37:22):

Yeah, for sure. You’re becoming famous within the niche of the people who are paying attention to what you’re doing.

Mark Ross-Smith (37:31):

Exactly. I mean it’s a small niche. It’s not a big celebrity out there.

Paris Vega (37:35):

Right, right.

Mark Ross-Smith (37:36):

But within that very small group of, maybe, a few hundred people around the world. Yes. That’s awesome.

Paris Vega (37:44):

So you’ve got two target customers, you’ve got the airlines themselves and then the people who are wanting to take flights and that you’re wanting to convert to these status match programs. When they sign up, when an airline signs up with you, do you also do a marketing campaign or something to drive them to the, maybe, is it a status match page on your site or something like that? Or do they just send their marketing dollars in that direction or what’s the marketing logistics there of how you run one of these campaigns?

Mark Ross-Smith (38:22):

This is a good question. Traditionally, airlines would’ve put up a page on their website and say, send us an email with a screenshot of your gold status with this airline, in four to six weeks, we’ll process it, which is terrible. Really, really terrible. You can’t track it, anyway. Won’t think about airlines on what they’ve been doing previously. So we generally create a white label page, like a landing page for these brands.

(38:52)
So it’s their brand, their look and feel, their brand style guidelines. It’s theirs effectively. We host it, we do everything else. So the airline traditionally would send out press release, something to that effect and promote it. No cost channels on there, earn media, and so they go do their thing because they’re an airline, they’ve got totally different contacts and ways of doing things than we do, which is good, which is good. Then we go do our thing. All the below the line stuff. So we know all the industry. It’s like 120 industry bloggers. We contact them all. We’ve got relationships with a lot of them, some other media partners, forums, business travel website. We go do the deals that airlines can’t or won’t do as well. Sometimes they’re just not set up for it.

(39:42)
It is like if you were a big company and you’re trying to spend any money at all on media, imagine the red tape you’ve internally you’ve got to go through to do that, right? This could be a three-month process, right?

Paris Vega (39:58):

For sure.

Mark Ross-Smith (39:59):

With 10 different approvals and oh, we don’t have the budget, we’ve got to wait until next quarter to unlock this monopoly money. We won’t pay for another six months after that anyway. So we just cut straight to the chase, go do it. I mean, there’s media deals that we’ll contact someone, and we are live that day on the next day. In our mind that’s how it should be done.

Paris Vega (40:20):

Right, right.

Mark Ross-Smith (40:21):

Very fast, very agile, test and learn, test, see if it works. If it doesn’t, doesn’t work, move on. So we bring this sort of marketing piece to it as well and that drives a lot more people into the airline brand that otherwise wouldn’t have seen these kinds of messages. So putting money behind it in paid media in addition to earned media that an airline might get through traditional channels. I think this combination works really well. So in that respect, I think this is an example where a big brand working with a small organization is a very good relationship. They do what they do really well and keep doing that and then we do what we do, go out and do that really well. The combination of these means you cover pretty much everything you need to or you can in a timely manner as well.

Paris Vega (41:17):

So the airline, do they pay you in addition to the fee that you get so that you can run all these marketing campaigns or you just say, “Well, we’re going to make revenue from this, so we’re going to take some of that potential revenue of these conversions and use it for our marketing budget?

Mark Ross-Smith (41:34):

There’s been a bit of both.

Paris Vega (41:35):

Okay.

Mark Ross-Smith (41:36):

Sometimes they’ll put some dollars into it. Sometimes we take a chunk, sometimes we take a risk and we’ll go out and just do deals that make sense. I mean obviously in line with their brand, it’s a lot of caveats here. It’s not just us cowboys out there doing our thing.

Paris Vega (41:55):

Who are the roles at the airlines that are your target customer? Who are the ones that would make this decision to sign up for a program like this with you?

Mark Ross-Smith (42:04):

Generally a loyalty team.

Paris Vega (42:05):

The loyalty team. Okay.

Mark Ross-Smith (42:06):

So loyalty, loyalty marketing, commercial, these kinds of folks, which in the last few years have got a lot more power at airlines. Like I mentioned, the loyalty programs. If you want to pitch something to an airline and it makes sense, you go to the loyalty people because they’re designed, they’re set up to make money. Whereas if you go to a revenue management or the wifi or the seats or the inflight food or all these different areas of it, they’re just seen as cost centers. So you’re going to loyalty if you’ve got a really good idea, really good product, something that makes sense, especially if you can pay them money, they’re actually designed to take your money. So a lot easier to deal with. So if they take your money, that’s great. Next best thing is free for them.

Paris Vega (42:57):

Right. And so that’s like an extension of the marketing department or is it just totally separate at these big airlines, like this, they’re just a whole loyalty department specifically?

Mark Ross-Smith (43:05):

Generally intertwined.

Paris Vega (43:06):

Okay.

Mark Ross-Smith (43:07):

Some of the big airline brands, that loyalty department can be hundreds of people. Some of the smaller ones I’ve seen teams as small as three, some as well, actually one, I guess, is the smallest. Anywhere between one and five, 600 people that can be quite big for loyalty team. Keep in mind, loyalty department can be worth more than the whole airline itself in terms of valuation, right? So to the point where in 2021, I believe the first one was United Airlines, they effectively mortgaged their loyalty program for $5 billion to secure a government loan, the federal government. They secured $5 billion, but the valuation was nearly $30 billion. Just the loyalty. So this is not the planes, the pilots, the fuel, all these, none of that. Just the mileage plus program, and what that meant, it was worth about two and a half times what the market capitalization of the entire United Airlines was, just that one little loyalty division.

(44:12)
So there’s a lot of power, there’s a lot of money there. And so if you can tap into that piece of the airlines, I think, what I’ve learned in having a few startups is being as niche as possible, sort of really drilling down, just owning the heck out of this one little piece. That’s all you need. You don’t need this big giant generic thing that does everything. It’s just too hard. You’ve got too much competition. But if you just drill down and go really, really, just own the heck out of your one little piece of the world, you didn’t do really well at it.

Paris Vega (44:54):

Awesome. I think that’s a great place to end it, man, niche down as much as possible. I think you’ve kind of defined this content marketing strategy. You could call it literally beating around the bush and not ever focusing in on exactly what you’re doing. You’d literally just beat around the bush with all your content that you put out and create this kind of gravity of attention slowly that focuses in on as they’re reading all these other helpful things, they’ll notice, oh, this is from status match. These are the status match guys. Again, you’re building up that brand and that goodwill in your niche market. I guess that’s for the actual, are you producing more content for the flyers or for the airlines?

Mark Ross-Smith (45:44):

You bang on here. I popped post on LinkedIn the other day and it was a picture of a first class seat. I’d just flown back from London last week and it was on Emirates, and so I just put this picture, it’s just a subtle of the boarding pass, my boarding pass says first class and the plane in the background looks nice and it’s like had a great event. Look forward to coming home, all this kind of stuff. Oh no, I said I slept the entirety of my flights. It’s like did I waste my experience by not going to the bar and drinking a thousand dollars bottle of champagne on the flight? Did I waste it by sleeping the entire flight? So who is the aimed at? Is this aimed at airlines or travels?

Paris Vega (46:31):

I don’t know. I think it’s a bit of both.

Mark Ross-Smith (46:33):

And did I mention status match in that post? No.

Paris Vega (46:38):

Right.

Mark Ross-Smith (46:39):

But it gets a lot of engagement and I’ve got probably almost 10 messages off the back of that post. Two big airlines brands as well. So it’s-

Paris Vega (46:49):

Wow.

Mark Ross-Smith (46:50):

I think-

Paris Vega (46:50):

Because it’s in your bio, it’s always under your name, on all the social platforms. So you get this subtle branding every time you get engagement.

Mark Ross-Smith (47:00):

Exactly. At the end of the day, everyone’s a traveler. Even if you work for an airline, you’re still a traveler. Well hopefully you are if work for an airline because you’re getting cheap flights. Everyone wants to go somewhere. Everyone’s like, I need to go to X, somewhere I need to go. I’ve always wanted to climb mountains. I’ve wanted to see the pyramids. I want to go see the Eiffel Tower, I want to go to Asia and see the… I want a street food in Penang. Someone’s got something on their list. So travel’s ingrained in us. It’s in our DNA. And when you see, I guess, it’s like my Instagram, they put their big photos of all their travel stuff and people look, “Oh yeah, it’s like, it’s aspirational.” That’ll be me one day, I’ll get there. So there’s a bit of that as well.

Paris Vega (47:51):

Right. I think there’s another startup in here that you could build called status make or something for us with no status, who wants status, who wants some kind of airline status to try out, because I haven’t traveled nearly enough to have any kind of airline status. So I definitely have that, “Hey, I want to go see all these things,” but without the status to even transfer.

Mark Ross-Smith (48:13):

My friend. I’m working on that already. So-

Paris Vega (48:15):

Are you serious?

Mark Ross-Smith (48:17):

Stay tuned.

Paris Vega (48:18):

We sync.

Mark Ross-Smith (48:22):

It’s a really good point you make because there is millions of people out there that don’t have status for airline. But once you’ve tried it, once you’ve had a taste of it, you don’t want to let it go, right? So it’s when you arrive at the airport, you’re not checking in the big long snakey coach line. You’re going straight to the first class line. It’s a nice red carpet. Judy’s there to welcome you, “Welcome back, great to… Oh, you’re one of our most loyal customers. I’ve moved you up to the better seat today. You were in 2A, I put you in 1A. It’s a much better seat.” It’s just these small things, but they make the world of difference. And then it’s like, “So look, the TSA line’s a bit long today, so I’m just going to take you through the special VIP line. Don’t tell anyone.”

Paris Vega (49:10):

Wow.

Mark Ross-Smith (49:11):

There’s that. And then especially in North America, if you’re not in those first one or two groups to board the aircraft, you can say goodbye about putting your stuff in overhead bin. So having that platinum status or whatever, it gets a bit addictive. You start enjoying the perks, you get used to it, you get comfortable, you want more of it. And I think when you try it out, this part of your internally you strive to want to keep it so you’ll try it once, “How do I keep this platinum status? What does it take? Oh, I just need to do 74 flights. I just need to do this. I only need to spend $15,000.” It’s like it’s totally worth it. “You don’t understand, I get to go on the lounge before the flight. It’s totally worth 15,000 bucks to have this $20 bottle of wine before my flight.”

Paris Vega (50:14):

So it’ll be kind of like a free trial of the status in a sense.

Mark Ross-Smith (50:19):

That could be something. Yeah, it comes up. I think there’s a bunch of folks out there that don’t know what they’re missing and-

Paris Vega (50:26):

For sure.

Mark Ross-Smith (50:27):

I think there’s an opportunity to do something. So I’ll sign up one of our first customers when we do that. And then that’s like you could do your own podcast. You could be my first customer on the next.

Paris Vega (50:37):

Hey. Hey.

Mark Ross-Smith (50:38):

Yeah.

Paris Vega (50:39):

I’m open to that.

Mark Ross-Smith (50:40):

Yeah.

Paris Vega (50:41):

All right, well real quick to wrap it up, why don’t you speak directly to your targeted customers, maybe, on both sides. What’s that pitch for them coming to status match using the service?

Mark Ross-Smith (50:52):

Yeah, so I mean travel brands, airlines, hotels, current cruise lines, casinos as well. We’re helping acquire new high value customers quickly, cheaper, more effectively than you can in any other possible channel out there. And for travelers, so people with silver, gold, platinum, like some kind of status with an airline hotel, car rental, just go to StatusMatch.com, register for free. And when there is something available for you that might be of interest, we just let you know.

Paris Vega (51:20):

Awesome. Thank you so much for coming on the show, Mark. I learned a lot today, and I’m sure that other people did too. And we’ll see everybody in next episode.