In today’s episode, we are dissecting whether airline loyalty businesses are worth more than the airline itself. My guest today is Mark Ross-Smith, a tech entrepreneur in the airline industry.
Loyalty business is proving increasingly profitable, with the value of some mileage sales surpassing that of the core operations. Recent research findings indicate that loyalty programs bring upwards of 50% of airline income of the airline’s total revenue.
On the day’s topic, Mark observes that loyalty programs such as mile sales are worth more than effective while the airline itself is worth nothing. At the same time, our guest notes some other examples of loyalty programs being more valuable than the core business. As Mark observes, airlines have successfully leveraged loyalty programs to drive high emotion around a product that people wouldn’t otherwise buy.
Indeed, it would only do fair justice to this subject if we addressed social media’s role in pushing airlines’ loyalty programs. Mark uses examples of success stories such as Singapore and Malaysia airlines to explain the undisputable role of social media marketing today.
While today’s topic is outside a lot of things that we talk about relating to marketing, it is highly relevant to any frequent traveler, marketing director, or entrepreneur.
Finally, get to hear about Mark’s selection of his brand ambassador. It is a relevant one from a film character. Enjoy this period.
Key Timecodes
- (1:25) Mark’s journey to being “Mr. Loyalty.”
- (2:51) cheap flights can be very expensive (the flights are cheap but everything else costs an arm and a leg)
- (5:06) Why he loves Heathrow over Gatwick
- (5:35) Singapore airport – a cut above the rest
- (6:55) How can an airline increase its loyalty through its lounge service?
- (9:30) Are airline loyalty businesses worth more than the airline itself?
- (12:20) Other examples of unprofitable core businesses and profitable loyalty programs
- (14:35) Success stories of airlines leveraging social media to market their loyalty programs
- (17:10) Use of influencer marketing and brand ambassador by airlines
- (19:30) Loyalty versus lowest price dilemma for customer
- (23:23) Conclusion and Mark’s contact information
- (23:51) Mark’s choice of brand ambassador for Statusmatch.
