Lufthansa’s Steffen Boller shares the airlines’ Web3 loyalty strategy

[upbeat music] Welcome, everyone. Good morning, good afternoon, good evening, wherever you are in the world.

Welcome to the first episode of the Fifty One Podcast, where we talk all about consumer brands, Web3, and the future of consumer engagement. I couldn't be more excited for this show.

I co- couldn't be more excited for our first guest, Steffen Böller. He's an entrepreneur, venture builder, software engineer, and above all, he's the director of new business ventures at Lufthansa Innovation Hub.

Lufthansa, one of the biggest airlines in the world. Steffen Böller was responsible for launching the Lufthansa Uptrip program, which was Lufthansa's Web3 activation, and today we're gonna talk all about that.

We untangle how they did it, what they learned, and how Steffen sees the future of Web3 consumer engagement. Without further ado, let's jump in.

Hello, everyone, to the first podcast of Dematerialised, to our first series with Steffen Böller.

Steffen Böller is entrepreneur, he's a venture builder, he's a software engineer, and he's the director of new business ventures at Lufthansa Innovation Hub.

Steffen, I'll give you the word afterwards to introduce yourself, but I'm very excited that you're here today, and I'm very excited to talk to you today about Uptrip.

Uptrip is a loyalty program that Lufthansa launched last year, and it's a loyalty program that works with the Web3. That's why it's so exciting, and I'm looking forward to that discussion today with you. Yeah.

Thanks for having me, Marc. Didn't know that it's the first podcast. Honored to be on it, and, uh, thanks for having me. Great to have you here. First, to our audience, maybe you can introduce yourself.

Who are you, and what do you do at Lufthansa? Sure, yeah. So my name is Steffen, working at Lufthansa's Innovation Hub, which is based in Berlin, and where I founded the venture project Uptrip.

I think we talk a bit deeper in- about that in a minute probably. It's a gamified blockchain loyalty app. Just, uh, for our listeners to understand this a bit better, what is the Lufthansa Innovation Hub?

What's the role of the Innovation Hub within Lufthansa, and why does Uptrip come from the Lufthansa Innovation Hub?

We're a small, let's say, special unit, as I said, also based in Berlin, whereas all of our other operations are more based in Frankfurt, Munich, Zurich, and so on.

And we focus on innovation topics, digital transformation. We do a lot of workshops, education on digital transformation.

We have a strategic intelligence team that does a lot of research, TMNT.com website with a lot of papers about the travel and mobility space.

And then we also have the user unit I am in, the venture building unit, new business unit, where we look at issues or challenges or also chances that we see at business units in the Lufthansa Group, and we try to come up with building a new software solution venture for it, which on one hand serves our colleagues in the Lufthansa Group, but on the other hand, if successful, hopefully also can be something to exist on the market, and hence become a venture, become a real company o- partially owned by Lufthansa, but also having a product or a service for other companies out there.

And how did that work with your Uptrip Web3 program? How did that come together? Why were you interested in thinking even about Web3?

Why do you think that was a technology that could be applied to broader customer base at Lufthansa? I had been a bit in the space privately before.

Actually, back in the days when Bitcoin started, I built some Bitcoin miners with a couple of friends. We put it in our parents' basements. We mined quite a couple of hundreds of bitcoins back then.

Sadly, we all sold them when I think the price was at $30 or something. But I sticked a bit to the space, looked what was coming up, especially since Ethereum came around.

I invested quite a bit in tokens or NFTs, mainly from blockchain games.

When I joined the Innovation Hub and started to work on ventures, there was the idea that probably as an innovation hub, we should also look into obviously new technologies, right?

And if possible, make a hands-on project in the blockchain space.

And then I guess personal interest for blockchain and gaming and talking to colleagues from Miles & More and Lufthansa, that all somehow joined together and Uptrip was born. That's super interesting.

And for the ones who don't know Uptrip yet, could you briefly describe what this is all about and how it works? From a user experience, it's actually fairly easy.

When you have flown with one of the Lufthansa Group airlines, you get the Uptrip app on your mobile phone, you scan the boarding pass from your flight, and we basically transform your boarding pass into a set of digital trading cards.

Digital trading cards like Pokémon, Magic, Panini, classical trading card. And those cards are personalized for you because they reflect the individual trip that you did.

So if I fly from Frankfurt to Barcelona, I get a Frankfurt city card, I get a Barcelona city card. You get a card for the type of aircraft you have been in on that day, Airbus A320 or whatsoever.

Then you can collect those cards, and with them, you can complete collections that we offer, like the 10 best Biggest cities in Europe or whatever.

So you need then 10 specific city cards, and once you completed the collection, you can hand it in and redeem it for a specific reward, like a travel or flight-related reward.

Usually, that's something like business lounge access, a Wi-Fi voucher, upgrade for your next flight, or whatsoever. So you collect, but then you also complete collections and hand those in for a reward.

And if you want, you can mint your card as NFTs, and then also trade them, sell them.

This whole community aspect of people getting together and then exchanging cards back in the days on the schoolyard, this is for sure one big part of it.

Yeah, and for people outside of Web3, marketers, branders who maybe haven't heard about the term yet or don't know exactly what it is, I think what you just mentioned is a, a key pillar of Web3.

It's transferability or ownership of your assets. And now if you look at, at Uptrip and that additional feature of transferring, trading your cards that you collected, how important is that part to the Uptrip experience?

I'd say it depends on the individual user.

You can, if you want to stay in your own world, just collect cards for yourself and try to complete a collection, but obviously it can be fairly difficult to do so because you probably won't fly crazy across Europe or you're missing certain cities.

So that's why exchanging cards with other users is fairly important or comes into play, especially if you want to complete the more difficult collections. But it's also not necessarily...

It doesn't necessarily require Web3 or an NFT.

We will in the future also allow you to swap Web2 cards with other users, especially if you want to make your cards into cash and trade them for a token or send them to a friend for free, for example.

Then you can only do so via making your trading card an NFT.

Yeah, and I think that's a, a very interesting feature and something that certainly stands out with Uptrip, that initially or by default, you have a Web2 experience, and as soon as you need that additional functionality for transferring your assets, you move into a Web3 experience.

What I've also heard or read is you launched in September last year, but before that, you had a relatively long testing period with testing customers. Is that correct?

I think we launched, or the beta test kind of was launched end of April.

We usually try with our ventures to ship pretty quickly, have a first prototype out, and then together with users, shape the product more and more, um, before we do a bigger initial official launch.

And so I'd say from May on, probably for the first two or three months, we were in a quiet prototype testing state, and then had more of an official launch, yeah.

And from what I've seen with the numbers, I think you, you had around 20,000 users testing it.

You generated over 200,000 cards even before your official launch, and what are some feedback that you got from your customers, uh, now since you launched the program?

Yeah, so now we are roughly at, I think, 50,000 users who have signed up for the app, and I think over half a million of scanned flights and retrieved cards.

The feedback that we get from our emails and messages, actually pretty nice.

A lot of people seem to feel reminded of their time back in school or whenever when they collected cards or stamps or whatever we collected back in the days.

There's also certain users who tell us that they choose a specific flight route, had maybe a stop in between in Madrid to get that Uptrip card that they wouldn't have gotten otherwise, and this is also actually something that we try to encourage heavily, right?

You get rewarded specifically if you travel to a place for the first time because then you get that city.

So if you just fly the same route, Frankfurt, Berlin every day, it's not that worthwhile than also visiting new places. And obviously users also like the rewards that they get.

From the beginning, we thought we definitely would need not only a collecting feature, but also a certain reward associated with you get something for collecting and completing collections.

We're heavily working on improving those rewards, offering more and more here, everything that could be flight or travel related.

But yeah, so far, and that's also what we see on KPIs and engagement retention rates, users seem to enjoy it a lot, and yeah, I think that's the nicest part about it.

Yeah, and do you see that enjoyment also among different groups? So do you have the diehard Miles+More collectors also collecting cards, or do you see more excitement among your younger customers?

We definitely have a quite younger target group than, for example, our sister program, Miles+More, which was also intended, and Uptrip targets, as it is built, it definitely targets a bit more younger audience.

We also see a lot of diehard travelers, frequent flyers, Senators, Honns, that use the app a lot and then have hundreds of cards.

Especially for them, obviously, trading and exchanging cards is more important, so it's quite a broad audience, I would say.

At the moment, Uptrip probably makes more sense if you fly a bit more regularly, so maybe you have a job for which at least every two, three weeks you need to take a flight, then it's more engaging and more fun to collect the cards and complete the collections.

But we also are looking heavily into how can we also make that interesting for people that go on vacation via plane twice per year, but can still utilize the app. Very interesting.

We know, of course, that Web3 activations in big corporations like Lufthansa is probably not very easy to push through to launch the project, to really establish within the organization.

We've seen that at other brands as well. It takes a lot of resources, a lot of gut to do that, and I would be very interested in hearing from you, how did you go about that process? How did you convince the team?

Did that need conviction, or was it obvious for you that you need to go that route, and what were kind of the tactics and learnings that you take away from that process?

Probably, I think the obstacles or topics were not so much about Web3 and blockchain and more about the project in general because I think we use blockchain more in the background, and that's maybe also how it should be, right?

It's a technology, like centralized database versus blockchain. And the general UX should probably always be in the center of attention.

And so the discussions were more about, hey, having a secondary loyalty program in general and how the app should work and those kind of topics rather than Web3 and blockchain related.

I think key part was to, of course, from the beginning involve all the relevant stakeholders, like our loyalty colleagues from Miles & More, some people from marketing and legal and talking to the airline stakeholders, in our case, including the relevant people.

On the other side, secret ingredient is maybe also to not be too noisy about such a product.

I'm quite a fan of rather asking for forgiveness than for permission, especially if you wanna be quick and, and innovate on topics. So that probably also helped us to ship the project at the end.

Everything that was Web3 and blockchain related, I'd say people were pretty excited about doing a project in the space finally, rather than hearing about it and about NFTs with monkeys being traded for millions or whatever you see in the papers.

And it probably also helped that Uptrip is pretty tangible. If I pitch it, if I show the app, it's pretty easy to understand. It's not that complex.

Also, we have the trading cards as a printed out version, so I can literally put it in front of your desk, so you get a hang of collecting these cards and that their NFT is quite, or can be NFTs quite easily.

And I think this also probably helped a lot to get the project going.

What I think is very interesting is that you approach this, at least from my perspective, not with a ideological view, even though you were, like, early in crypto and, uh, you understand all that stuff.

You approach it with a quite pragmatic view that Web3 is nice to have, and it can be added if it adds value, but it's not a must-have, and it shouldn't be the center of the experience if it doesn't need to.

I'm very into making meaningful, useful Web3 applications, and I like that phrase, like, blockchain is a solution looking for a problem quite often, actually.

If you look at the projects out there and you do a deep dive, you quite often might wonder, "Hey, why is this using blockchain? Is this necessary? Is this useful?"

And I think it's a super fair and important question to ask, and every blockchain project should probably be able to justify towards that. And don't get me wrong, right?

It's totally fine to play around with new technology and try out stuff and, and experiment if that's the reason, or otherwise you need to explain why you use blockchain and why not another technology.

And this is super important because we, all of us in this industry, we aim for mass adoption at one point, right? And end users have a certain threshold of trying out new technology.

They won't do it again and again, so we need to present them a useful case where they see a real added benefit and, and not now my tokens or my NFTs are worth one-tenth because I only did it for speculation, and there needs to be that meaningful case if we wanna aim for mass adoption.

So yeah, I think we tried really hard to make this Web2 to Web3 bridge meaningful. Yeah, maybe it's not that as easy as possible, but I think this is what we should look out for in Web3 projects in general.

And looking back now on these last months that the program has run, do you think it was a success for the users, and was it also a success for you, or is that too early to tell? For us, it was probably success for sure.

As I said, we got really nice feedback. User numbers are still growing, high engagement. It's nice to talk about it with people like you.

Of course, there's a lot of exchange with other partners, airline companies that do Web3 projects in general, which is awesome. I think also users are heavily enjoying it, also experimenting with new technology.

But we're definitely still in the early stages. Our list of things we want to improve and build is, is fairly long, so I'd say we're just getting started, but it was already worth it for sure. Yeah, that's great to hear.

Definitely excited for that.

And now again, taking the perspective of a marketer brander who sits maybe in a, a corporation brand who wants to do a Web3 project, what are the KPIs that you look at when you do such a project and evaluate whether that's successful or not?

Is it in traditional marketing, or do you look at other things as well? I'd say it's actually quite in another traditional mobile app or whatever kind of application you would run, right?

So we look at user growth and engagement and retention. In our case specifically, we look how many flights do the users scan.

Like, best case, the second you start using Uptrip, every time you fly, you should use Uptrip, right? And you should even use it in between.

So those are just basic app retention numbers that you would probably always look at. How easy, how costly is it to grow users, right? Do they refer the app to their friends and talk about it or not?

Pretty generic stuff. And then as we talked about earlier, listening to your users, getting qualitative feedback from them. When it comes to Web3, then of course you have a bit of different KPIs.

You look at, uh, numbers of connected wallets, numbers of cards minted, numbers of transactions you had, volume, prices on your NFTs. All of those KPIs are, to be honest, still fairly low.

The NFT feature is not yet that present in the app. We didn't push it too hard because the user experience is not that polished as we would like it to be. You still need your own wallet. You need to pay for the gas fees.

So you need to be a bit of Web3 enthusiast to dig through that. Heavily working on improving that, and also I think the industry as a general is heavily working on that.

But probably the KPIs are quite as they would be usually as well. You just mentioned your colleagues in the industry.

When you talk to those colleagues, and when you think about what you've now achieved with Uptrip and what you've learned, where do you see this technology going, and where do you see the potential for Web3 in upgrading the travel experience of the future?

Good one. I think there's a big chance that Web3 will be embedded in many things that we do in our life in the future, in, in travel, but also everywhere else.

But there's probably also quite a chance that it could be vanished in a couple of years, at least from general public, and might be only used in specific solutions, logistics, or whatsoever.

So it depends a lot on how can we actually utilize this technology, this solution to our existing problems, and make these meaningful applications. And then, yeah, it can improve travel.

It can improve loyalty maybe in certain cases. But it should always cater to the question: Why is blockchain needed here, or what does it really improve or change? Yeah, and that, I think- For example, maybe- Yeah...

something that you hear pretty often in the travel industry is the use case of, hey, if your flight tickets would be NFTs on the blockchain, and then you could just trade them and sell them if you don't want to or cannot make the flight, right?

And yeah, in theory, that may be possible if your flight tickets are NFTs, but this could also already be possible at the moment. It's not a technological challenge that exists really.

It's a legal security strategical decision that the airlines maybe don't allow you to give your ticket to another person or allow you to change your name.

It's not something that can be just easily solved by, hey, instead of a centralized database, we use a blockchain now.

But there are for sure other use cases where it opens up possibilities that haven't been there before.

Like my favorite example maybe is always decentralized exchanges, DEX, where you can swap tokens, um, in an instance just one with another and without the need of any intermediary instance, right?

That's why it's called a decentralized exchange. And imagine we could do that in the future with currencies or stocks or whatever kind of asset instead of needing bank account or a depot at a broker.

I think this is a nice example where the technology really enables something, taking out that intermediary, that wouldn't be possible at all otherwise.

And those are the cases we need to look for in travel and loyalty everywhere to make blockchain last.

Yeah, that's a very good point, and I think that's why I like the Uptrip example so much because you not only have a very healthy approach to Web3, you implement it when it's needed.

You're really trying to use it only as it adds value, and at the same time, you also focus on a very, uh, niche use case. It's about loyalty.

It's about collecting, and that's where you start, and then you maybe grow the experience from there, but you're not trying to do it all and in different verticals at the same time.

That bridge and education for the user is, I think, pretty important.

And when there is something in it for you to gain, right, to try that new technology because you have an, an advantage then in the app, you can do more if you would not have a crypto wallet or whatever, then it becomes a nice meaningful use case.

Yeah. Cool. Also, we're almost at the end of our show, but before we end it, I would like to ask you some lightning questions. Short, interesting questions with short answers.

You can answer them in one word or in one sentence, whatever goes best, and I'll just start with the first one now. Coffee or tea on a long flight? Coffee. Window or aisle seat? Aisle seat.

In-flight movie or in-flight nap? Movie. [chuckles] Early bird or last minute boarding? Early bird. Jet lag cure: workout or sleep it off? Sleep it off, but at the right time, so when it's evening wherever you are. Okay.

Bitcoin or Ethereum? Ethereum. One word to describe the future of Web3 in travel. It's a difficult one. I go with promising, although I'm skeptical.

[chuckles] You're a gamer at heart. What's your favorite game? I probably sank most hours in World of Warcraft. My favorite one would probably be Dark Age of Camelot, which is a pretty old game no one will know.

[laughs] Okay. That's a PC game, or? Exactly, yeah. What's one book everyone in or outside of Web3 should read? I'd probably go with there's a book on... Or let's go with Hooked.

Hooked is a really good book for everyone building applications and products, how to make them interesting, sticky for your customer. Yeah, I think that's good for Web3 people as well. Cool.

I think that's quite a famous one, right? It was on the bestseller list for a long time. Three last questions. The first app you check in the morning? My calendar. [laughs] Okay.

The biggest myth about blockchain and Web3? Maybe that it's quick and easy money. [laughs] Okay. And the biggest opportunity of Web3? Building very good, meaningful products.

Yeah, that was nice in the end. Thanks for putting in the airline aviation questions. [laughs] It's interesting to know everyone has his, her own preferences. Was a nice fit.

All right, Steffen, we are at the end of our show. Thank you very much for joining us today. That was very, very interesting conversation.

I think there's a lot to learn from what you do at Lufthansa, from what you did with Uptrip. If you wanna learn more about Steffen and Uptrip, where should people find you? Check me out on LinkedIn.

Check out the Lufthansa Innovation Hub website. Check out the Uptrip website, or even better, download the app straight in the iOS or Android store.

And yeah, I guess we put a couple of links in the show notes, whatever comes up to mind. Exactly. So, uh, yeah, thanks a lot for joining us. It's great what you're doing. Let's continue building.

Thanks, Marc, for having me. Bye-bye. Bye. [upbeat music]