October 8, 2008

Cathay’s Asia Miles Chief is in for the Long Haul

By Tiltman, David

He may not be a typical marketer, but Paul Loo's analytical background makes him suited to his new role. By David Tiltman PROFILE

Paul Loo whips a card from his wallet to pay for his drink. "Do you take Asia Miles?" he asks, beaming at the waitress. The answer is no. Undaunted, he hastily makes a note in his BlackBerry to find out why not.

The new general manager of Cathay Pacific Loyalty Programmes (CPLP) is clearly relishing his role. Two months ago he swapped a statistics-driven post in the revenue management department to something "where you have the face of the customer in front of you".

He now oversees Cathay's two loyalty programmes: the Marco Polo Club (for regular flyers) and the broader Asia Miles scheme. Loo joins at a crucial time for Asia Miles. It recently rolled out a cobranded card with American Express after splitting from long-term partner Citibank. And at a time when rising fuel prices and an uncertain economy are putting growing pressure on the aviation industry, Loo is charged with keeping Cathay's most profitable customers happy.

Has Cathay got the right man for the job?The 39-year-old is quick to admit that his background is not that of a typical marketer. "I'm not a brand person who is very trendy and creative," he says. He is certainly not flamboyant or showy. What he is, though, is sharp and analytical. His previous role involved price modelling, and working out how many seats to sell at what price. Having moved to a job that is primarily about direct response and calculations of customer value, that may be a bonus.

"You need to be very analytical in this role," he argues. "In other parts of the world these sorts of programme are being spun off from airlines. You need somebody who understands the economics behind the scheme."

He is also Cathay through and through. Having gained a degree in engineering, he joined Cathay's graduate training scheme. He has spent the past 17 years moving from role to role ("at Cathay we are always assigned to something; we never ask to do it"), including stints around the world and a previous spell in CPLP. Even his cufflinks are Cathay.

Loo envisages being in the role for three to five years, matching the four racked up by his predecessor Dominic Purvis. And while he admits he has thought about looking elsewhere from time to time, he says that for somebody who is Kowloon-born and bred, it would take a lot to leave. "When you're with Cathay you're selling Hong Kong.That makes me proud."

There will be plenty to do over the next few years. The American Express deal was sealed before he took the role, but promoting the tie-up has been his first task. The split with Citibank came amid speculation that the margins on such tie-ups were becoming too thin for financial services brands.

The deal comes amid tough times for the airline industry in general. Loo points out that during the last serious Asian economic downturn, it was Cathay's most loyal customers who continued flying. But with competition so intense, maintaining that loyalty is now a major issue. "Keeping customers happy cost-effectively is becoming harder," he admits, arguing that the answer will not be found in a spreadsheet, but in improving individual customer experiences. "The difficult part is enabling front-line staff to make a difference."

One of the key issues facing Asia Miles, and airline loyalty programmes in generales redemption. Airlines do not like customers sitting on large pots of unredeemed miles. To this end, CPLP has spent the past couple of years transforming Asia Miles. Consumers can collect points without flying and redeem them against electronics, say, rather than just flights. The challenge CPLP - and, therefore, Loo - now faces is to raise awareness of that shift among consumers.

There are plans to do just that. In North America Cathay has been working with a website called Points.com, an online exchange that allows consumers to swap airline miles for other re wards. There have been talks to bring that sort of service to Asia.

Ultimately, these schemes could bring Asia Miles into competition - or collaboration - with micropayment services such as Hong Kong's Octopus. It's a long way from an airline loyalty scheme, but for Loo, it's the goal CPLP should be heading toward."! would like to make Asia Miles a day-to-day currency. My vision is to have the Government knocking on my door wanting to regulate me."

Loo... the new chief of Cathay Pacific 's loyalty programmes wants, in the long term, to make Asia Miles a day-to-day currency for the airline 's customers

Paul Loo's CV

2008 General manager, Cathay Pacific Airways loyalty programmes

2005 Manager, revenue management systems, Cathay PacificAirways

2002 Commercial manager, Cathay Pacific Airways loyalty programmes

2001 Manager, ContaCX project sales and regions department, Cathay Pacific Airways

1999 Manager, West Japan Cathay Pacific Airways, Japan

1991 Various roles, Cathay Pacific Airways

Copyright Haymarket Business Publications Ltd. Sep 4, 2008

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