Welcome to our webinar, everyone. You’re in our waiting room. We’re going to get started in a moment. I’m Chris from AI Events and welcome to our webinar on Status. With that, I’ll introduce our first two panelists. I’ll just go with the first one. I see Mark, you want to introduce yourself?

Yep. Hi everyone. Mark, CEO of Loyalty Status Co. The company is most well known for creating, we’ll call the modern status match. Currently, we work with 27 different airline, hotel and retail groups globally. We’ve been behind some of the technology and marketing behind some of the hyper status matches out there. We work with big brands like the Lufthansa Group, Air France, KLM, Emirates, Etihad, Star Alliance. Prior to Loyalty Status Co, I ran the loyalty program at Malaysia Airlines. That was a lot of fun.

(00:58)
But I think we’re all about status today and I think the one most interesting part of my journey in the last couple of decades is actually being a legitimate business traveler. I’m a frequent flyer. I’ve been a frequent flyer for the last 22 years, as in I’ve held and retained status with multiple hotels that entire time continuously. And I’ve been living and breathing this world for quite a long time, and everything I’ve been doing and Phil’s been doing, and everyone that works at that company has got intersecting now. And we’re sort of building all that knowledge and expertise into everything we’re doing at Loyalty Status Co. It’s everything status. There’s a lot of things we don’t do, but we do status really effing well.

How many statuses do you hold between airline, hotel, car, do you know?

Probably 15 or so. It’s quite a lot. More than half at a hotel. Some are from credit cards, but airline, almost all my airline legitimately earned on merit. I fly, I fly a lot, I put in the hard yards. My bum’s in that seat. I’m feeling the pain like millions of other people are feeling every day with delays and things going wrong. But as I see all the things that go right and airlines especially are really good at creating magical moments for status holders, and so if we can help more people experience that, I think that’s our job.

So are you sure about the pain part? I see your posts on LinkedIn, it seems like a lot of champagne and caviar. I don’t know about the pain part, but with that I’ll introduce the next panels or let them introduce yourself. So Phil, feel free to add what you would like about Loyalty Status Co and also what did you do before, why are you here helping us on our status journey on today’s webinar?

Okay. Hello, everyone. Phil, I ran Virgin’s program in Australia for many years. Started off with no status at all. Then we implemented Australian focused status with two tiers, and then a few years later we did a global program with three full tiers and an invitation tier above. So that journey gave a lot of learnings. We also ran until, I mean until Loyalty Status Co, we run the world’s most successful status match program, which give enormous insights into what worked, but also some of the many challenges. And for the last 10 years I’ve been helping airlines, large airlines and other travel businesses with their loyalty strategies. Obviously, status is a big part in the last few years working with Mark, Stewart and the team on Loyalty Status Co, which it is just a fascinating business, because it’s such a powerful part of the industry, which we just believe is just totally sort of under looked.

So why are we here talking about status? You say it’s overlooked, but why do you say that status is overlooked?

Well, so actually what Mark said makes sense, is that now, and before at Virgin as well, I was a banker, so I was a true frequent flyer, earned it. And I kind of get that give me an understanding or at least an insight. A lot of the industry, have been in the industry for a long time, and just have these programs, but haven’t necessarily lived it themselves. But status, right? Reason why status is so powerful is because it does three things. The first thing is the obvious thing it enables, it is a massive impact on the journey. People think about the languages and there’s a lot of focus on the language, because of the cost and the challenges of capacity. But status enables us far more. Status enables you to go through the airport, avoiding all the friction points and that makes a big difference to your day. If you fly without status and then fly with status, it’s a big difference.

(05:07)
So a lot of people think about languages, but it’s more than that, but it’s much more than that, because also status, there’s a pride that goes with status. There’s an emotional connection, frequently with the status program. People wear the badge, people are proud of that badge and sometimes it’s a bit weird, they’re so proud of this badge, but there is that emotional connection that goes with a status program, which you don’t get with a normal membership. And the third thing is confidence. And again, this is often overlooked or misunderstood, is that when you fly with status, you know things stuff up. In travel, things stuff up, but you do know or there’s a belief that if you are a status member and things stuff up, you get looked after. And for us, as I’ve worked in the industry, we know that that is true, that there is this hierarchy and the status is a big influence on that hierarchy.

(06:05)
But the outcome of all that is that people, true frequent flyers will often not fly without it. So status has a massive influence on their choice and people will go often change their times, change their routings so that they can flow with status, and then often it gets read. So a lot of people are actively actively considering where they are on their journey, so they can get, attain, and maintain status. No one cares about points in the same way. Most people don’t know exactly where they’re collecting points that they go, but a lot of people are actively considering where they’re on status, and then if they have more than one status program, like Mark’s an extreme version, but a lot of people have a couple of programs at least, and then they’re trying to balance how they can keep the status with these all the way through the year. So there’s a lot of stuff going on, but in the whole loyalty industry, people want engagement and status is one of the few things you are actively engaged with the program and emotionally engaged with it.

Yeah, I will say that a couple hotels this year have offered some type of promotion where I got extra status nights if I, one night or two nights and get extra status nights, and it tipped my behavior of one hotel versus another hotel. So it did affect my spending behavior this year. So I agree with you.

Yeah, if you do a test and you test with people who are close to status or have status, and you do a status focused promotion and you do a points focused promotion, or maybe a price focused promotion, it massively outperforms. Massively. So it is like a magic dust, which not just airlines, but most programs are focused on the points, because that’s what you’re used to, but the status, you’ve got to be careful, because it is so powerful. You can’t just spray it around. But if you use it well, it is hugely powerful.

Phil started to touch on it, Mark, but Phil mainly focused on why status is so important to the consumer and then he started touching on the brand side. Maybe you could expand on why it should be important to loyalty programs, and is it important enough to loyalty programs, I might ask?

I’m going to add something real fast on Phil’s comment. Phil, you’ve run a loyalty program. I have as well. There’s probably a lot of people listening to this that have worked for an airline or something. This is a situation where you’re an event or something and you’re meeting frequent flyers, the airport something, the first thing, what’s the first thing that every frequent flyer, when they know you work for an, what’s the first thing they do when they come up to you? “Hi, Phil, my name’s James. I’m a gold member.” It’s the first thing they say. They don’t come up to you and say, “I’ve got 52,000 points in my account. I’m trying to get another 2000, as I get a free trip to whatever.”

(09:10)
They’re proud of their status. Like I said, it is a badge of honor they put on there. I think to Chris, to your point on the question here, status in general, not just like travel status, but status is part of our lives. Think about what people innately as humans, we do for status. We want the flashy watch, we want the cool new fast car, we want the big house, we want the designer everything. We want these things, because it makes us feel good. It’s status we shot, especially probably more male driven, slightly than female as well. But to get that status, to attain, to kind show off to the world, because it’s kind of a sign of respect really. If Phil sees me with my shiny whatever, Phil’s thinking, “Wow, Mark’s pretty cool.”

I’ll never think that.

And so, I think this drives a lot of our behavior. And especially like airline hotel status, you’ve got to do something to keep it. You don’t just buy it once and that’s it. You’ve got to keep buying that new Lamborghini every few years to stay in the club. Same with airline, you’ve got to keep flying to do it and which means you stump up real cash to go do it. And we innately know that people will fly unnecessarily sometimes. They’ll go out of their way, they’ll buy more expensive tickets, they’ll do what they can to try and do whatever they can to hold onto that status, because to Phil’s point, it just makes everything throughout the whole airport experience a hundred times easier. And you don’t really know it until you feel it. Phil, you feel it when you lose it. That’s when it’s like, “Oh my gosh, I have to line up with these 300 other people in the economy line to board the aircraft. What is my life coming to?”

I live in the country of Panama, speaking of. It’s still Copa Airlines, the local airline is still distance based and I’m planning my mileage runs already this year, so to get to status. So I can attest to that and it’s pretty cool that it’s still distance based here, so I can actually still do mileage runs. But you’ve been talking about the consumer side. What is it important enough to brands, are loyalty programs focusing enough on status, Mark?

I’ll add a couple of points. No was the real answer, but I’ll give an example. How important is status to an airline or hotel, right? I think that’s, how do you understand that first, how do you quantify it, right? Because you see all points of miles, you use credit card deals, billions of dollars floating around. And what about status? How do you put a price on that? And I’ve been faced this question many times, and the first time I was working at airline at the time, C-level person asked me this, I flipped it back and I’ll share what I share with them today. I said, “Don’t have the exact number, but how about we just shut down the status program tomorrow? Let’s turn it off. No more silver, gold, platinum. Just keep the lounges there, keep everything else there. Just turn status off. Let’s see what happens.”

(12:20)
And of course, they’re like horror, can’t do that, because they intuitively know it’s incredibly valuable. I’ve seen stats floating around online about when airlines, like with alcohol, right? They serve alcohol on board and then they decide to be a dry airline. So they cut it out. And the impact that has on the airline revenue, the numbers I’ve seen floating around. Overnight impacts airline revenue between 20 and 40%. If you turn status off just like that, I reckon might even hit those kind of numbers, you’d start losing a lot of the revenue premiums you get out of it. A lot of people, “Why do I want business class now? I’ll just fly cheapest airline, because there’s no status.”

(13:01)
All these sort of things start to happen. Suddenly the banking relationships are not as close, because people that banks have status as well, they’re consumers as well as your business partner. So there’s these dynamics to consider. So what’s the value of status to an airline? Could be worth more than equal, maybe more than the value of points and miles is to the airline. But then I think Phil might want to build on this but you know, think about how many-

That’s an easy one. No, that’s an easy one. Status is worth more than points. Now to be honest with you, like I said I ran a program, we made a lot of money on points. It’s a beautiful machine for making money, but it’s also true that an awful, a huge proportion of people with the credit card are status members. This is where it starts getting interesting. So a big proportion of the frequent flyer revenue comes from the status members. It’s not a hundred percent, but it is frequently 70 odd percent. But when we’ve analyzed this, we’ve analyzed this to death and the airline revenue from the status members is usually higher than the total revenue of the frequent flyer program. It’s harder to analyze, like one time it took me five years with a PhD student to get the number, but it’s bigger than the frequent flyer revenue. Frequent flyer is a beautiful business, because it is so measurable. So that’s its benefit. But status is much more powerful, much more, much more impactful on the airline.

So I don’t know what data you can share and maybe, I don’t know if Mark’s the right one to answer this, but I have seen in the market where some of your status matches, you’ve matched credit cards. Are you able to talk to that? Because there’s also a question from related question to the audience about how this could be applied to retail, so I don’t…

I’ll talk quickly about matching different things. So before we relaunch what we call the modern status match. So our status match is equivalent of A350s in the sky. Before us, everyone’s got these DC3s out there. Really inefficient, slow, they work, they get you there, but they could be a lot better. And we’ve effectively modernized that, and there’s a dozens of things we changed in that sort of business model. We brought in options for brands to charge a fee to charge customers to apply. That has pretty big impacts, because suddenly there’s ways brands make money out of people doing status match, they’re buying this stuff like that. When you talk about credit card matches and hotels matching to airlines, and there’s all these sort of options of which way to slice and dice things. This is about building a new audience with the airline, a hotel, an audience that they otherwise would find very difficult to attract.

(16:02)
And so, when you say to someone, “Hey, you can get airline status if you have this credit card over here,” and we validate all that.

(16:11)
We prove the person has this type of card and only the kind of people can actually get through, and we validate that through a payment effectively and some other tools. And when we do that, we make sure we know it’s the right order. It’s the customers the airline wants. If an airline’s going out there and just spend all this money on Facebook ads, the Gen Z type people, right? What you’re effectively saying is, “We want to engage with Gen Z people that don’t spend much on planes,” and yet we see everywhere in the world the best customers are premium airlines always between the ages about 40 and 60, skewed to male. Why not go after them? To Phil’s point, they typically always have these high-end credit cards.

(16:52)
So this is what we built for a bunch of brands, a way to go out and find these people, and bring them into in a new way that makes sense for them. Because again, these people, they want status, they’re attracted to it. And so, that’s why we see these offers in the market doing incredibly well, because it’s new, it’s cool, it’s interesting, it’s something that people want and these people have a massive willingness to pay for stuff. They’ll pay for status and they’ll pay, they’re not going to pay $5,000 for it, but they’ll pay something that makes sense for them, especially if it’s a brand they haven’t engaged with yet. And so, that’s why the brands we work with, it’s high value customer introduction in a very cost-effective way that makes sense for them.

And I will bring it back to the question of the audience. And before I do that, anyone else in the audience, there’s a question box. We have several questions, but for those I haven’t mentioned this yet, you can type them into the questions box in the go-to control panel. I believe the audience has figured that out, because questions are coming in. And here’s one is, have you guys given any thought to the retail industry? How can they play in the status world? Any thoughts there, Mark? Have you guys given thought to that or even work with retailers?

I’m happy to go. Reality is, a lot of the stuff we’re talking about here is definitely more aligned to travel. The engagement you can get in a travel pro program, because it does get you home, because it does significant impact your experience, your lived experience, then the power is far greater. In a retail environment you lose some of that power, but some of the other concepts are still there. People will still be, for want of a better word, emotionally engaged with the program. There is still a badge of honor, there is still a incentive to get you cheering. So some of the concepts still work in retail. What you cannot do is take something which is working in travel and just copy it. You’ve got to tailor the offer or tailor the promotion, or tailor what you’re trying to do relevantly not just retail, but your specific customer and your specific objective. But the concept of status being powerful will still cut across.

So you guys were talking about status being powerful and changing customer behavior. One of the hottest topics in airlines and now especially hotels now, online travel agencies is ancillary revenue generation. So is there any way that you can use status to drive? I mean, you were talking about driving core business, but does it drive ancillary revenue? I don’t know who wants to take a stab at that? Feel free to jump in, either of you.

Can I take this? There’s more to us than Status Match, right? Status match is where we started and we’re very, very proud of it, and we’ve got some fantastic runs on the board and we’ve got some brilliant campaigns. And we really related to this, as Mark said, by introducing a fee, then it just completely changes the dynamic. We’ve run free campaigns and we’ve run paid campaigns, and we can tell you the ones that come out the bottom end, the ones the engaged members are pretty much the same number. But by having a fee you just reduce the tire kickers at the beginning and you get a completely free campaign, and ancillary revenue. So it’s an absolute gift. But we’ve also got other tools, engagement tools. So just give you an example, because one of the other challenges of the industry is a lot of these programs are static. The rules are the rules are the rules, and they’re in place and customers are basically only really interacted at round about the time of renewal and sometimes not even then.

(20:51)
But people, as I mentioned before, people are considering a status all the way through the journey. And if they have more than one status program, then where they are in that journey as in are they on track to maintain a status can play a big part in their airline choice. So one of our tools is we enable customers to pay. So first of all, we enable targeted customers to pay to boost their status earning potential and there’s many, many segments where this is really appropriate. So customers that are falling behind early, you’re give them the opportunity to pay, boost their potential. During that period when they’re getting boosted, it is like they’re doing status runs all the time. They are actively trying to buy up and buy the business class, or buy them more expensive tickets. But it also gets them back into the vein, where status is powerful again. So it stops them dropping out. But so, what you get is you get income and more engagement, and I just cannot think of another way, another sort of tool where you get customers paying to become more engaged.

So you’re talking status as a direct ancillary revenue. Maybe I could ask, and I think I saw you post about this on LinkedIn, Mark, but what about if you’ve identified people who are willing to spend money with your brand, they probably have money for something else, like to buy and other product through you. So is there a way to use status to drive incremental sales of other products?

So let’s just extend this webinar by three hours, because I can talk about this for a long time. Airlines I think are really good at optimizing three or four things. They’ve been honing their skills for a long time. Revenue management, so price they sell tickets for and steering that in the right direction depending on the market capacity, competitors, all those sort of dynamics that happen. Great, good at that. The last two decades they’re getting pretty good at selling seat selection fees, to the point where there’s a lot of airlines now, even if you’re top tier, you’re paying for a seat selection in an economy class. A lot of big brand airlines are doing that now, which is a bit iffy. The other thing they’re very good at is selling bags. Very good at that. That’s kind of like what we’ll call the core flight ancillary business. There’s a few things on the side, insurance and kind of stuff. So we keep that in mind.

(23:27)
And then to your point, a LinkedIn post the other day, I booked this flight on a US carrier and I have gold status, which is mid-tier with this alliance. And through the booking flow they said, “Do you want to purchase lounge access for $70?”

(23:43)
Now I get free lounge access, because I’m a gold member and I get it in the USA for this particular one. And I thought, “You know what? This is one of the world’s largest, probably the world’s largest airline and here they are, the page is just white, it’s just this one box on it that says, ‘Do you want to buy lounge access for $70?'”

(24:01)
So they know who I am. I’ve flown them many, many, many times. I’m not a new customer, same email address, same everything, same frequent flyer number. They know who I am. They know my status, they know what ticket I’m buying, they know everything about me. World’s largest airline, presumably unlimited budget to do anything technically they want. And here they are trying to sell me something that I’m already getting for free anyway. Like, what else could you sell me? So it’s almost like, have they just run out of ideas?

(24:37)
They’re really good at selling a few things. It’s almost that they’re trying to keep optimizing these things instead of, in my opinion, looking for new greener fields, new money, the whole blue ocean strategy over here. Go after the new money is and you got, it could be anywhere between 20, 30% of seats of revenue is from status holders and these people, it’s the right type of money. It’s the high yield money. They’re booking close into the departure window. It’s in business, premium economy, first class. You want more of this kind of money. And these people obviously have money, because they’re buying these premium, or their employer. Someone has the money there, they like to travel, they get it, they’re flying based on value, because they have status. If they didn’t value status, they’d be on a low cost carrier. It’s like everything is aligned, just sell me something that I want.

What came to your mind when this happened to you? What else could they have sold you, like a ride to the airport in the limo? Did anything come to mind or what could they have sold you?

Yep, totally would’ve paid for that. I would’ve paid for someone to escort me through the airport to bypass security lines, because in the USA that is a big thing. I’d pay for that. I’d pay to earn a multiplier on my status on that flight. I’d pay for a bit of extra attention on the flight. Well above and beyond what I get as a status. Hey, treat me like a VIP for one flight, click here, pay $300 extra. I’d try, I mean, I’d do it just for fun, but just check it out, put on Instagram at least. Again, it’s all status driven, right? I’ll look good for a day. And this is all margin to them. Think about the operating margin of an airline, anywhere between zero and 20% at best kind of thing. Whereas you’re selling ancillaries and loyalty and status stuff. It’s almost all margin. Status is no financial, not really, not in the same way that points and miles create issues for airlines, because there’s a cost in the future. Status is about how you feel. So why not create more stuff that…

(26:48)
I mean to be fair, that’s exactly what we are doing. We’re sort of stepping up and saying, “Let’s just solve our own problems with the knowledge of everything in the industry so far and that we’re frequent flyers ourselves.”

(27:01)
I’ll share a quick story. There’s one brand we work with. They said, “We want you to try us, so here’s some free status to try it out.”

(27:09)
I said, “Thanks, but I don’t think I’ll be able to retain this.” I’ve got, just to Phil’s point, I’m juggling all these other balls. I can’t possibly keep this. I said, “But if you introduce a subscription product,” which we’ve since launched with another brand, “if you launch a subscription product, then I could buy that and I could retain the status legitimately and you’re going to get more money out of me, more flights out of me and the subscription fees out of me.” So we end up launching this, another airline. It’s done phenomenally well with this other brand, to the point where I think it’s the top or one of the top two revenue streams for loyalty. Makes more than credit cards. Quite a perspective.

So Phil, I see your head nodding. Do you have anything to add on ancillaries?

No, you mentioned in this thing, the thing I love about paying for status, because it is not a sense of it, it is quite a new concept, but it’s beautiful, because people who’ve paid that extra fee are much more likely to choose you and fly with you. So it is a magic recipe. You get ancillary revenue in and then you get a higher demand for your flights. I did it myself. Two weeks ago, I was flying, Virgin gave, it wasn’t a paid, but they gave a double status credits promotion and I did mental gymnastics to justify why I had to fly business. But without that status credit, I couldn’t just couldn’t do it. But I emotionally decided I’ve got to do this. It is relatively generous earn anyway with a double, it’s fantastic. And then I just found a way of justifying I had to put the business class.

Well let me, because you guys are talking about different products related to status. So I think most people in the audience probably have heard of you at this point as used to be branded as status match, and now you’re a Loyalty Status Co. Maybe could you tell me about what ways are you able to share how you can help clients monetize status? So obviously there’s status match, but now you’re talking about, you’ve talked about other ways, selling status to someone, identifying someone who’s just short of making status and upselling them. Are you able to share other products? I don’t know which one of you want to jump in.

Well, I’ll talk about the products, but we’ll talk about the strategy. Our products help engage customers, re-engage customers and acquire customers. So status matches is acquiring and we won’t probably need to talk about that less, but it’s just because people are probably more aware of that, right? But we can acquire from other airlines, we can also acquire for new markets with get status, et cetera. But the other products, which are about engagement and re-engagement, that again is a clear open market, because airlines just aren’t doing this very well. For a long time now most of the focus of the marketing teams within airlines have been focused on partner stuff, often contracted. They have to do these communications and there hasn’t been a lot left. So the status side of the businesses has been set the gap. So the engagement by identifying what we can do, is identify customers that are likely to be interested in basically a status offer.

(30:51)
Deliver a status offer and then track them, and see how they go. Some of them are subscriptions so it goes on over time. Some of them are just more targeted. There’s a multiple number of segments, because what we’re doing is also building up a knowledge base and there’s multiple segments where we increase the engagement, get ancillary revenue and get the flight revenue. And then, at the end of the renewal there’s a whole process that we can manage for airlines or for any status business as a status program, where we manage the pre and post renewal. So again, bring them back in, re-engage them, really suck them back in, often with ancillary revenue at the same time, but it’s a complete end-to-end.

Phil, I just checked. I put post on LinkedIn the other day. People can check this out. I went through my email inbox and looked at all the emails that the top five airlines I got status with. I just had how many emails are these brands sending me? Just how much are they engaging me? To Phil’s point on re-engaging, commercializing their customers. One of these brands I’m a gold member with, that’s a mid-tier for this airline. This airline is either the top or the second top airline in the world. This is the big brand everyone knows. I have one email from this brand in the last, from the loyalty program in the last, what are we now? September. The last nine months. That one email was, “Congratulations on retaining your gold status.” I’ve got a lot of other emails, like, “How was your flight today?” Tons of those, but that was the only one from loyalty. Now what’s interesting is, I live in a country where this airline has a co-brand credit card here. I don’t have that credit card.

(32:33)
You’d think that would be an obvious, “Hey, go sign up. You’re only Mark.”

(32:37)
I’ve had status with their line for six years now, every year since then. Not downgraded. So that’s one example. There’s another airline, most airlines is just the monthly newsletter. This is how miles ago, same flight you did, here’s our new partners, here’s our new thing with our car rental partner and that’s it. That’s generally the extent of a lot of them. I know I’m harping on about this, but please sell me something interesting. But when I say me, this is representative of millions of other people that have status. If you just get a newsletter, you like to fly a lot, and you’re proud to have that shiny gold card and show people, help me get the platinum card, help me get the credit card, help me earn more miles, so then I can take my family on a trip and then tell everyone about this amazing experience, and how I redeemed 200,000 miles and whatever. Not every airline’s like that. Some do a really good job at it obviously, but I think the majority that I’ve seen.

We have a question from the audience and I’ll direct it to Phil, because you talked about when you worked at Virgin, and you started a loyalty program and then added status later. Some of the audience is looking for us to quantify about how, and Mark you touched on this as well earlier, where you said you talked to the management where you worked before in an airline and said, “Hey, let’s just get rid of status and figure out how much it drives.” But this is a question from the audience. How do we quantify status? How much money does this drive? Is there any way, any numbers any of you can share or any anecdotes, or how do we quantify this? To the program side, not for the customer.

Yeah, so we could give you some rules of thumb. Reality is, it does depend. It does depend on the business, how big the status program is and how well it’s managed. Every time we’ve looked at it and I say we’ve done some really deep in-depth studies, the impact on the airline revenue was greater than the total revenue from the frequent flyer. And in addition to that, you’ve also got 70% of the frequent flyer revenue related to status as well. So you add the two together, it’s enormous, absolutely enormous.

Obviously people buy more tickets in order to get the next status. So this is not loyalty revenue, this is direct or you do more heads on beds in order to get your status. So this is direct hotel sales, right?

Yeah, but it’s both and that’s why it’s so beautiful, because it absolutely delivers a stack of, if it’s an airline core airline revenue and it’s high yielding airline revenue, and it delivers a stack, it is directly related to a huge proportion of the frequent flyer revenue.

Correct. And it’s less price sensitive, right? You’re not buying economy, because you don’t want to get the less miles or you’re doing the business class to get your status offer, etc. So you’re you’re a better yield.

No, exactly. Exactly. You’d have to be a little bit crazy to be building up, to buy a different fare class for points. I’m not talking about different cabin, I’m talking about different fare class. And yet there’s an awful lot of frequent flyers who are acutely aware of the fare classes and actively buy up so they can get the more status credits.

I mean, some of the airlines now even let you search by fare class on their websites. And this is exactly for the reason, right? Why should a consumer know about fare classes within revenue management? But we do dive into this total weeds in order to get our points, and well actually, to get our status, because the points are irrelevant at that point. So Mark, anything to add?

Phil’s done a good job there. I like the airline websites that they tell you on the booking flow how many status points or credits you’re going to earn on, and you can compare them at a glance. The basic one, I earn 20 points, whatever. The top one I earned 40. And there’s some really fast math that goes on in your head, you’re like, “$153 more, but I earned double. Yep, it’s worth it.” And here’s interesting, I want to know how many airlines track, like I bought the flexible fare in economy, but I could have bought the cheapest, right? At that point, I’d almost attribute that to loyalty, like a hundred percent incremental gain there. You could argue a few things, but a big factor would be the extra tier miles or the status credits from that booking, in which case it’s more than just seat revenue. It’s like free money basically.

But is there staff to do this, right? To Phil’s point earlier, everyone’s focused on these contractual agreements with the bank or their largest airline partner. If they’re a hotel, the largest airline partner, etc. And they’re not, is their staff to even track anything related to stuff? How many people in your customers manage status or in your experience in previous, is this a big team? Is it one person? How is status managed in an airline or a hotel?

Well, to be honest, given how powerful it is, it’s often shocking that some programs have none. Literally it’s just managed as part of the program and where they do have a specific status team, it is often a team of between one and three. Not always, but often between one and three. Whereas the marketing team and the co-brand teams, huge teams, huge teams. But we also recognize the fact as a business, we recognize the fact that people aren’t sat in these programs doing nothing. So it is easy for us to say there’s this big great opportunity to engage, re-engage and acquire customers, but there aren’t people sat around ready to do it. And that’s the other thing that we’ve done as a business, is we’ve really worked hard to have really simple tools we just plug in, and then we just do all the work. We do all the work, we just get the data feed and then we just deliver money and engage members. Simple as that.

So you used to run a program, and I’m sure you were under the same constraints, you had to sell points to banks or to your partners, and probably you would have to get buy-in to make a staff dedicated to status. How would you recommend for companies to do this? How do you justify it? What’s the ROI? How do I create the business case to do this?

To be honest, I’m probably a bad example, maybe because of my banking days when I was totally focused on the status, I was really across how important it was, and we did, like I say run the world’s most successful status match before we launched in the pre status match days. But I couldn’t give up status. I literally, I ran the program, but I managed status myself. I was constantly playing with it and I loved it, absolutely loved it. I loved it, because we were building the program, and so we put it in. And when you put in a tier, you can see the impact, you can really, really see the impact. And then you had another tier, you see the impact. So we were a bad example, but most of the team were still focused on running the program. It is like my special interest project.

Do you have any, not that you can share internal data, but we talked about co-brand earlier, but as people get tiers, I assume that a higher percentage have a co-brand, right? If I’m based here, 50% have a co-brand and then must go up as you know, once you get to top tier-

It does. It really goes up. As a rule thumb, it’s like 70% of state-tiered members have a co-brand. We’ve seen it lower and we’ve seen it a lot higher. But that is, but also in many programs it works the other way around as well. 70% of the co-brand have status. So if you didn’t have status program, you’d be much, much harder to sell co-brands. And that’s where we all know we are making more of money.

So any ideas on how status and co-brand could work better together? In other words, you said there’s generally not enough people in an airline or hotel managing status, maybe any. Have you guys put any thought to how status can be used to drive to take up in credit more co-brand engagement, spend more on the co-brands thoughts?

Yeah, I’ve got some, Mark.

I share one note with it. We’ve seen on status match, people that do especially a paid status match, we’ve seen up to 30% of those people then go on to get the co-brand credit card. And if you look at it like if the customer’s paying a fee, you can assume maybe the brand is not paying us anything, because there’s fees there. And in some ways then the brand is acquiring new customer and if 30% them go on to go co-brand credit card, this is probably the cheapest, most efficient, fastest customer acquisition channel on earth for both the airline and the bank. Mind blown.

And that’s 30% in 90 days.

As in, yeah.

So the number that would do it over the year, even higher.

If 30% get a co-brand, do you ever any data or just anecdotally how many people actually fly or stay in the hotel? Like, some type of use the core product, so I take a match, what percentage then actually buy on my product? Probably the vast majority. But do you have any information on that data that you can share? Just not by company, but in general.

So we’ve frequently seen 90% of people do some activity. So this is interesting, because that’s what we’ve been seeing, especially with the paid ones, is 90% do some activity. When I talked about my pre status match days, when we did was a hugely successful program. It was a third, third, third at that stage. A third of people came in, got the status and continued to. Well, I see a third of people came in and got the status and did nothing. So it’s just dead money. A third of people came in, flew a bit, or flew but didn’t fly enough to maintain it, and a third of people came in, flew and flew enough to maintain it.

(43:55)
So we’re seeing more than that with paid campaigns, we’re seeing a much better skew with paid campaigns, so that’s partly because of the pay, but it’s also partly because we process so quickly, and we find and proven that when someone’s in the market for this stuff, you’ve got to basically do it quick, get the status in the hands quickly, because that, A, is when they’re in the mood for switching. But it’s also a good lens into what the service is like for your airline. It takes six weeks, then seriously…

So maybe one of the reasons the third, a third, a third versus a paid, or versus what you guys are doing currently is fraud. And I’ll call on Mark for this one, because I know he likes the fraud topic, but I have a volunteer job in the loyalty security alliance, and in the last nine months we’ve just been hearing more and more about status fraud. The long story short is airlines have gotten very good at stopping credit card fraud. So it’s driving all kinds of new frauds. One account takeovers and brokering, but status fraud is right up there. So is fraud part of the reason the third, a third, a third that Phil was talking about, Mark? Maybe fraud [inaudible 00:45:15].

But a third, a third, a third, also keep in mind that was in Australia, where there’s effectively two airlines. So if you look at that in say USA or Europe, that might look a little different where you’ve got 20 airlines. So market dependent as well. Fraud, we see a lot of fraud, a lot of shady stuff coming through the platform. Some is just really not fraud, but really, really shady stuff. And the folks facilitating this are very sophisticated and very good at doing it, and they’re doing it for a reason. It’s because they don’t want to pay down ancillary revenues.

(45:54)
If you’ve got status, you don’t want to pay for seats and bags, and if you’ve got United status, you’re getting a better seat in the plane as well, which would otherwise cost you a fortune. So they’ve got a real financial driver to try and obtain status through, I don’t want to call it a gray market or a black market, of these status operators that are out there, which all that has direct financial impact to the airline brand. And it’s directly ancillary revenues, the thing they make the most money out of, the most margin out of, impacts that the most. And so, they’re effectively giving it to the wrong people. We’ve seen-

I’ll ask you how they do it very quickly, but I’ll add an anecdote, because in the hotel world I know these people are often doing it to get into the lounge and they tend to be large drinkers and eaters, so they’re not always the best guests. So some of the lounge fraud there, some of the status fraud there causes grief at the property level in the lounge. But how are they doing this or are they doing photocopying another airline’s card, or what’s some of the basic status frauds?

I won’t add too much detail, because I know the scammers tune into these webinars, but I’ll share a couple of themes that we’ve seen. Photoshopping cards, it is pretty basic. It happens, but it’s not the biggest thing. We see chain matching is quite a big thing. So these scammers will help someone get into an airline that doesn’t have protection and they’re running their own status match. They get in through that, because they just think just give that status, hopefully they fly. The person that uses that status, which is now legitimized, it’s minted effectively, comes into us. We see it, we identify a vast majority of these pretty quickly, which then protects the brands that we work with.

(47:53)
So if status match platform is not protecting a brand, we can’t really help them. They’re kind of exposed to all the nasty stuff out there. We’ve got our negative list or our black list of people that have tried status, that is more than half a million people. It is quite large. We’ve seen some brands we work with, the rates declines is very significant, where you wouldn’t want to take the risk on doing this yourself. So there’s that whole element. So it’s more than just Photoshopping. There’s a lot of other stuff going on there.

So you guys catch it. The long story short is there is fraud in the space, it’s growing, you guys catch it, but maybe we’re not in a fraud webinar, so what are people paying for statuses? It might give us a good sense of what they’re, if we see what a fraudster is paying, it might give a good sense of how the value, the market value status. So what are some of a hotel or airline status? Do you know what they go for on the dark web or telegram or wherever people are buying these things?

So there’s a couple articles I saw recently. Gary Leff from The Wing published that you could buy Marriott Platinum status for $20. So there’s one. I think there’s another in United, $100, $200 for Platinum, I think it was. Gold or Platinum, which is Star Alliance gold status, which gets the lounges and stuff like that. A couple of hundred bucks there. We actually have a whole cyber threat intelligence monitoring part, where we scour up things like Taobao Red, dark web, all these kind of things. If there’s any brands that we work with and they kind of pop up, we are straight on there to figure out what’s happening, get it shut down if we can, which we do a lot of the time. But on these plays we’ve seen hotel status, I think every hotel chain. You’re not paying more than 50 bucks. If I’m talking top tier, the diamond status type levels for very cheap car rentals, even lower than that. And compare that, these low dollar amounts versus what airlines think it’s worth, things are worlds apart, I can tell you.

What it’s really worth to real members, the ones who can’t get it from the dodgy, what they’re really willing to pay. And it’s a lot more than that.

So, well thank you for that. And we’re coming towards the end of the hour, so just maybe you could each share what you want people to remember about status. I’ll start with you, Phil. What’s your key takeaway from today’s webinar regarding status?

I just think people need to have a good look at it, because it is, like I said before, it’s a beautiful, powerful. In the whole loyalty industry, and I’m talking about the whole global loyalty industry, status is the one thing that can actually engage people and get people to actively change their decisionings. And if you do it well, you also get revenue as well. So you get people to pay to become more engaged. Beautiful.

Do you think this is, because what you said earlier, it’s just that the contractual relationships with the co-branded card and with your largest travel partner, the easy money overshadows the longer tail of revenue from status. Is that what’s happening?

Well, it’s not just easy money. I think that that beats the programs that a lot of status programs been in place for a while. And so, people just, they kind of take them for granted and they’re just focused on either what they have to do contractually, or what their KPIs are. And lot of the KPIs are about driving co-brand and driving points, and there’s nothing wrong with that. But there’s also this beautiful tool over here, just use it more or help us use it.

Do you think an airline or a hotel employee is actually earning status, so that they understand this? Maybe if they earn status, they would feel the magic and the brand would live it more? I don’t know, but maybe-

I think that’s part of it. Before I was a banker, I worked at British Airways in loyalty and I’ll be honest, I didn’t really get it at the time, I just really didn’t get it. And then, it was doing a status run, was a natural part of the calendar and it was open. As in you would say to your boss, “I need to do a trip to maintain my status,” and they would sign off. It is crazy, but that’s the way, because he knows he could doing the same thing.

I mean, but if you think about it now, that actually could be a money saver. What you save in bags, in lounge accesses and all, it’s actually probably worth it.

Yeah. People do focus on the physical and the commercial side, but I do think that the power is in the emotional and the confidence side. That’s where you get the irrational desire. I say irrational, but it is quite rational, but the outsized engagement is from that side.

And Mark, I’ll ask you for your final thoughts, but I do have a question from the audience that said, will we have a recording? And the answer is yes, we’ll send you the recording. So with that Mark, what are your final thoughts regarding status? What do you want the audience to remember from today?

Two things. Firstly, I had lunch with someone today. Was passing through my part of the world on the way to Europe. He’s here for a few days on a stopover. He’s on a cash first-class ticket on Qantas, actually I’m not even going to say, not a cheap fare to buy. First class, right? He’s doing it for status. So when people think of status runs, typically it’s like cheap flights. We’ve got a guy probably spending 20,000 bucks. I don’t know how much first-class fares are out of Australia, but that’s probably about it right now. Things are not cheap out on that side of the world. To keep his, I mean he does have super-duper-duper-duper-top tier with him and maybe it’s worth it, maybe, I don’t know. But he’s got the money, he’s tired, he is got time, he’s got money, he is doing it. So there’s a lot of money and status and that’s just one guy. So I’ll share that.

(54:17)
And then, I think takeaway from today is to Phil’s point, we talk about points and miles being kind of easy money, but what if we’re looking at all is wrong? What does status is easy money as well? It’s just no one’s really doing it yet. The brands we work with make a lot of money, some of them more than the credit cards. What is that? Which is the easy money in that case? Maybe it’s flipped around, maybe status is the easy money, but it’s like sitting there in front of you, it’s like take the cash. But it’s like, “No, no, no, we’re scared to make money. We’re happy with this over here.”

(54:53)
It’s like, guys, come on. So I really do believe, and we’re seeing it with, we work with 27 airlines now. We are seeing that I talk about statuses, helping unlock the next a hundred billion dollars ancillary revenues globally. And I think that’s where it’s going. Airlines are always looking for that next big thing. Status is it. It’s already here. We’re already proving it. So it’s like, how do we do more? How do we do more? Because when brands do more, more products, more offers, more things like this, ultimately it benefits frequent flyers, which isn’t that why we’re in this industry, to help bring more joy and happiness to people’s lives? So why not bring some happiness to their lives, help them keep the status, make some money at the same time.

My takeaway will be to reach out to you guys at Loyalty Status Co. I’m sure they can find you on LinkedIn. I’ll give them, I think airlines are very good at getting people safely from point A to point B, and hotels are very good at heads on beds, and that often they try to do a lot of too much building versus buying. And I’m much more a fan, if it’s not your core business in buying. And I would say that not just because talking to you, but just about most innovative startups. Reach out to any startup, because they tend to have the great ideas. And as you guys have pointed out, the status has very few people working in it in an airline or hotel.

(56:26)
You guys live, breathe and eat, sleep this. So reach out to you to figure out how to leverage status, which should be the next big ancillary revenue. So reach out to Mark and Phil on LinkedIn. I’m sure you’ll find them. And everyone can join us at Airline Information at our next loyalty event on co-branded credit cards in Wilmington, just outside of Philadelphia in November. So with that, thanks Mark and Phil, thanks to the audience, and we will see you at a future webinar and maybe outside of Philadelphia in November. So thanks guys.

Thanks, Chris.

Thank you.

Cheers.