Change, challenges, and opportunities at the cutting edge of innovation
At D/SRUPTION, we speak to and collaborate with innovators across multiple different roles and industries. In a new Q&A article series, we ask change leaders from our expert network to give their insights on what they see as the biggest hurdles, considerations, and solutions. What do they really see as the central challenges, how are they handling change, and where do the real opportunities lie?
This week, we spoke to Craig Unsworth of Upgrade Pack to find out how the startup is breathing new life into loyalty.
Please tell us a little about your role and your company…
I’m the founder and CEO of Upgrade Pack, a new startup that is disrupting the loyalty market with our closed marketplace for flight and hotel upgrades. Currently consumers either have to pay a lot of money upfront for an upgrade or are at the mercy of ‘bidding’ processes or loyalty points redemption rules, which can be complex.
Our technology connects airlines and hotels who have unsold premium seats and rooms available with people who want to upgrade, providing real-time offers on flight and hotel upgrades to these customers at a fair price.
The service is delivered as an app that our clients – who are mostly banks, credit card companies, and corporates – give to their best customers and employees, funding it as part of their loyalty or benefits programme. This membership model creates exclusivity and brand differentiation for our clients whilst giving their most valuable customers or employees a great deal on upgraded travel.
Has the loyalty sector changed in recent years?
It’s interesting that it has been decades since we have seen any real leaps in the loyalty sector. The same can be said for travel industry technology too. Most programmes are still low-value gift or cashback initiatives based on spend, which feel out of date. They’re certainly rarely appropriate for premium consumers.
The focus on acquisition also means that loyalty programmes often end up being neglected and customers will often just ‘accept’ rewards that they don’t really use. While more everyday rewards, like free coffee, offer instant gratification, do they really increase a customer’s emotional connection with that brand? We have sought to address this lack of emotional engagement to provide a loyalty-based reward that our clients’ best customers will value – but which will also appeal to a target new customer base.
What are the biggest challenges you are facing today?
As a young and rapidly growing business for us it’s all about scale and speed. We are launching in six countries this year so the immediate challenge is managing our early stages of growth whilst establishing ourselves in each of those territories. We have to consider how requirements vary according to region, particularly when working with financial services clients.
Fortunately my co-founder (who is also our COO) and I have highly complementary backgrounds across strategy and operations so we are a good team. We are also fortunate to have a very strong advisory board who have significant experience in the markets we will be active in. Finally, our cap table comprises a number of professionals who we can go to for advice.
What are the biggest opportunities in your field right now?
Within banking – one of our key markets – adoption of platform-based technologies and partnerships is key. With disruptors winning customers using a digital first approach, the more established banks are partnering with FinTech disruptors to deliver enhanced products and services, outside of their often limiting legacy infrastructures.
But Platform-as-a-Service (PaaS) models can add value to banks and their customers outside of the transactional relationship. Loyalty programmes are a great example of this. We know that 55 per cent of people prioritise credit cards featuring travel benefits, and in an airport study we carried out last year, 95 per cent of people said the thing they wanted most when travelling was an upgrade. We work with premium banks and credit card providers to provide a travel-based premium loyalty solution that has high exclusivity and stickiness, and which not only rewards their most valuable customers but also has the appeal to help them attract new ones.
What other business models or approaches do you see as particularly important at the moment?
We see three core themes across multiple sectors: curation, experiences, and democratisation. On curation, we repeatedly hear from our users that there is too much choice. They want expertly-curated, perfectly-personalised – and they want it now.
We see people turning to experiences over purchases in almost every sector – especially leisure sectors, retail, and travel. After all, travel is the only thing you buy that makes you richer!
Finally, we look at the democratisation of access to almost anything. Often called the ‘Uberisation’ of something, what we essentially mean is the still-quite-recent “anyone can do anything for themselves, in the palm of their hand” phenomenon that has transformed how all demographics live their lives. It’s the reason that PAs are booking fewer taxis for executives – because the executives can just as quickly book an Uber themselves. It’s also why we feel we offer a better loyalty mechanic than the likes of Concierge services – which feel increasingly alien to digitally native users, who can often get what they want, right now, themselves…
What are your biggest sources of inspiration?
Travel has been the best inspiration for me. It provides three things: time to focus (I’m more productive with a desk at 40,000 feet than anywhere else on the planet); exposure to new ways of working (I specifically like how differently business is conducted in the UK, USA, and Asia – and have adopted ways from each); and the best way to get under the skin of users. As a product person at heart, understanding what our users want is always the most important thing for me.
Sign up to our free weekly newsletter here.