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Talking Points Episode 24: Best Of Lady Bosses

May 29, 2019
44 min read
Talking Points Episode 24: Best Of Lady Bosses
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Talking Points now drops on Wednesdays!

Toady we have another "Best Of" to highlight the women who are dominating the travel space. On this episode, you'll hear interviews with Caryn Seidman-Becker, the CEO and co-founder of CLEAR, Kristin Lemkau, the CMO of Chase, and Joanna Geraghty, JetBlue's president and COO.

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Full Transcript

Brian Kelly: Hey, hey, and welcome to Talking Points. It's your host, Brian Kelly, The Points Guy. Talking Points is a podcast that's all about travel. We talk to the people you need to hear about in the space, from executives of the top loyalty programs, influencers, TPG staffers and more. On this episode we've got another "Best of" for you. This time, it's a wrap up of conversations I've had with a few of the women who are absolutely dominating the travel space like Caryn Seidman-Becker, the CEO and co-founder of CLEAR.

Caryn Seidman-Becker: For me, it changed the way I felt my moral obligation to make this world a better place -- which is how I send my kids off to school every morning, right? -- with that sort of mantra. And CLEAR was the platform that absolutely fulfilled that need for me to leave the world better than I found it.

Brian Kelly: Kristin Lemkau, the CMO of Chase.

Kristin Lemkau: If you told me then that I would be in this role today, and this role would even exist, and the company would look like it does today I would've never believed it.

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Brian Kelly: And Joanna Geraghty, JetBlue's, president and COO.

Joanna Geraghty: I often think women sometimes are reluctant to put their hat in the ring, so to speak, because they don't have all the qualifications. And that's something a little unique to women, and you shouldn't shy away from doing that.

Brian Kelly: So get ready for some boss ladies and travel point-hers on Talking Points. Up first, Caryn Seidman-Becker, the CEO and co founder of CLEAR. She talks about how biometric technology is changing the way we travel. She explains how CLEAR is a safe and secure way to get through security and what a membership looks like. Karen also shares some super exciting expansion plans.

Brian Kelly: Let's just talk a little bit about the history of CLEAR. So I'm one of the... I don't know what, original CLEAR members back in the day before you owned it. So CLEAR was started by a company, a lot of people signed up and then went bankrupt. Right? What exactly happened there?

Caryn Seidman-Becker: Yeah. The bankruptcy word, never a good word. And so CLEAR was started as a response to 9/11 in partnership with the government by Steve Brill and a team of innovative folks who thought biometrics were a great solution to enhance security and delight travelers. And they were right, but they might have been early. The economic downturn ... biometrics were probably ahead of their time. And so they were levered. They had debt due, the world fell apart in 2009. The technology and cost structure wasn't where it should have been. And so they shut down very unceremoniously.

Brian Kelly: Yeah, I remember it was...

Caryn Seidman-Becker: June 22nd 2009, we still had some of the signs.

Brian Kelly: And they were Denver-based, right?

Caryn Seidman-Becker: They were New York City-based.

Brian Kelly: I remember so vividly going through the JFK, the old Delta terminal when I signed up, and there was all this debate, because biometrics and giving so much of that data back then was really controversial. So, the company went under?

Caryn Seidman-Becker: The company went under.

Brian Kelly: So before CLEAR, you were in the hedge fund biz?

Caryn Seidman-Becker: Sure, just like every good operator. Jeff Bezos, for the record, worked at a hedge fund. Just saying...

Brian Kelly: Do you feel like that has a bad connotation?

Caryn Seidman-Becker: I think it does, and yet I think it should have an excellent connotation because we were value-oriented investors, long-term investors looking across different businesses. And I had the fortunate position to have a front-row seat to companies like Priceline post-2002 that almost died and had a brilliant management team that turned it around. To see Jeff Bezos, who people thought was going to die in the dot-com blowup, turn Amazon into what it is. To see Steve Jobs return and turn Apple, which started with the candy colored computers upon his return, and build a platform. And what you see across those companies is management teams with not so much historical experience in their industries -- I mean, Steve, yes, but not at the beginning -- focus on the customer, build solutions for the customers, build the customer's trust and then build this platform where I can delight you on the Priceline brand. I can use this travel platform for bookings, and active, and all these different things. If I can delight you on my hardware desktop platform, we can take that to laptops, we can take that to iPods, and the iPod ultimately becomes a phone. And so you keep going. Amazon -- if I can delight you with books, I can sell you anything.

Brian Kelly: Yeah.

Caryn Seidman-Becker: And then continue to optimize it. And it's never good enough. And so I was fortunate to watch all that. They defied all the critics. We're sitting in the indefatigable room at CLEAR. That is our core mantra, right? Persistent and tireless. And to watch incredible people do incredible things. And as I like to say, I didn't want to die and have people say I picked good stocks. The opportunity to build a company that was member-centric -- and when I say member-centric, it's team members and customer member-centric -- that made our world safer and delighted customers. That was an awesome opportunity.

Brian Kelly: So you saw it even though it had this slow... well actually, quick car crash sort of end in there... You saw the opportunity in that. What was it? Did you know the original founder?

Caryn Seidman-Becker: No, I did not. And I wasn't a member. I looked at it once at the Grand Hyatt, going up to a conference, but did not join. But (I) was invested in one of the biometric solutions that helped build CLEAR. And that was L one. And so what I saw was ... ready for my McDonald's analogy? Long time ago, in 2002, we invested in McDonald's. And McDonald's had blown up the stock for a variety of different reasons. And everyone said, “Oh, McDonald's -- obesity lawsuits, it's the end.” And what you saw was a giant line of cars out the drive-thru and a company that investors no longer cared about. So I call that the dislocation between Main Street and Wall Street.

Caryn Seidman-Becker: At CLEAR, what we saw was the opportunity to build a biometric platform, a secure identity platform. So that's from a research perspective. But when I sat next to people at a dinner party or talked to people and said, "Hey, we're looking at CLEAR," they would literally whip out the card from their wallet. It was shut down. They hadn't gotten their money back. They didn't know where their data was. They were frustrated, they were mad. (But) they kept the card, and they said, "We love CLEAR, we miss CLEAR." The power of that brand, the power of that service and that experience -- that was it. And so to know that we had a vision of a secure identity platform... that biometrics were going to change the world -- they were doing it outside the US not yet inside the US -- and to see the passion that customers who had not been treated very well -- actually, they were treated terribly at the end -- the power of the brand...

Brian Kelly: That they still loved it after all that. That's pretty cool.

Caryn Seidman-Becker: That was the best focus group you could have had.

Brian Kelly: I always like to think whenever people say you're doing something crazy, you're probably onto something.

Caryn Seidman-Becker: Yeah.

Brian Kelly: I'm sure you had no shortage of people in your life that were like, “Stay away."

Caryn Seidman-Becker: I mean, I love my mom dearly, but the thought of her daughter leaving Wall Street to buy a bankrupt company was not good cocktail party conversation.

Brian Kelly: And how many members were there when it shut down originally?

Caryn Seidman-Becker: There were 190,000 members when it shut down originally after about five years, there were 18 airports, but the majority of customers came from six airports: Denver, Orlando, San Francisco, New York, Atlanta. And so, the stuff was in storage, the hardware... Ken and I were visiting warehouses to find kiosks and cartons of information in storage facilities. There were no employees, and we were the customer service, the telephone operator, the email writer, the marketing department, the operations team. And we went about building a team...

Brian Kelly: Who were your first couple hires?

Caryn Seidman-Becker: A treasurer, someone in accounting. A COO who came from the airport... airline industry at the time. So, some folks in operations. And then we had a lot of folks on the technology and innovation side, some of whom had experience with old CLEAR or the defense industry or biometrics. And then a customer service person.

Brian Kelly: So we... look, it's 2019 now and you've got 3 million members active. So congratulations on that. Pretty impressive growth.

Caryn Seidman-Becker: Thank you.

Brian Kelly: I guess my first question is do you consider CLEAR a travel company?

Caryn Seidman-Becker: No. So we consider CLEAR a secure identity platform which is using biometrics to make the world safer and easier to navigate. "Secure" and "frictionless" are so many different words that we bat around here. We're building this connected world. And travel connects the world, so I think it's an incredibly important vertical. It is the place where security and identity not converge but collide and where customer experience matters so deeply, and where security matters so deeply. And it's also where CLEAR died and where was the most obvious use case to bring it back. I will say that I've been in... I'm from DC, my parents worked for the government. My grandparents were immigrants. I care deeply about the state of our country, about security here. I'm also a paranoid neurotic New Yorker. And, you know, 9/11, was...

Brian Kelly: Were you in the city on 9/11?

Caryn Seidman-Becker: I was not. I actually took a plane on 9/10. I flew to LA on a 10pm flight on September 10th. And then the next morning... I fell asleep with CNBC on at the hotel, going to a Merrill Lynch media and telecommunications conference, and woke up to the voice of Mark Haines on CNBC a few hours after I landed. And there were people I knew in those towers. There were people that people at the conference knew. It was a surreal experience. We were stuck there, got back many days later. My parents worked in DC -- trying to find them. My husband was here in New York. And it changes the way you look at the world. And for me it changed the way I felt my moral obligation to make this world a better place -- which is how I send my kids off to school every morning, right? with that sort of mantra. And CLEAR was the platform that absolutely fulfilled that need for me to leave the world better than I found it.

Brian Kelly: I mean, because that is such an interesting challenge. Everyone sort of hates airport security, but everyone knows that 9/11 is not in the distant past and we all want to make sure flying is safer. But it's always so hard because... We've agreed today we're not going to put down the TSA. I mean, the TSA serves an important role. That's for another podcast episode. But as travelers, we don't want to be inconvenienced yet we want to be safe. For people who don't know CLEAR, explain the ecosystem in an airport. What information does CLEAR have and why does CLEAR make us safer?

Caryn Seidman-Becker: Yeah. So before we even get there, I think to your point on TSA, and it's worth putting forth -- TSA in 2001 put forth the concept of a registered traveler program and started, right? And so I want to say, and I think people don't recognize it enough, the power of public/private partnership. And CLEAR is here... I would argue TSA at the beginning incubated CLEAR. CLEAR is here because TSA thought that working with the private sector on innovation to make things safer and easier was a good idea. I'd like to think that we proved their concept right and are taking it further, faster in partnership with them. CLEAR is about, to your point, how do you make things more secure? How do you make them more frictionless? And I would say travelers beyond airports. You think about trains, you think about cruises, you've got to put that whole travel ecosystem together. And it's ensuring that you are who you say you are. You are you and we know something about you, whether it be that you have a boarding pass or, you know, from a PreCheck perspective, which is a TSA program, but there's also other opportunities to say you're a known traveler. And that can change your experience.

Caryn Seidman-Becker: And so CLEAR is about a customer-centric enrollment process. Enrollment in these programs is difficult and often not consumer friendly. And so CLEAR was about making it a less than five minute enrollment process where we are digitally authenticating your identity document. Like, every time you're taking out your driver's license. Why? We're going to say it's real once, it's absolutely real on a digital basis, not on a manual basis. And then you're going to get a trusted identity quiz to ensure you're the person on that document, right? So the document's real, you're the person on the document -- fingerprints, iris image and face become those documents. Your credit card, because you're paying, and your driver's license.

Caryn Seidman-Becker: And so it's almost like you're merging with your wallet when you enroll. And so every time you're putting your fingerprints down or your iris or your face, you are those documents. And you are the information on those documents, right? So that's about the enrollment process. That's the enrollment and then the verification process. Every time, your fingerprints or iris -- which is what we're using today at the airport -- reflect what you're constantly pulling out of your wallet in sub one second. And then on top of that, from that ecosystem perspective, we've then built through APIs into different things. So we've just launched in 20 different markets with Delta biometric boarding pass. If you go to LaGuardia today, your fingerprints are both your driver's license and your boarding pass, taking nothing out of your wallet. You go into the lounge --you use your biometrics to check in at 50 different lounges today. Again, taking not your boarding pass or your driver's license (out)...

Brian Kelly: I hate that. When you got your phone, your license... Yeah.

Caryn Seidman-Becker: But why? Why are you doing all these things? And then think about the power of facial as we continue to roll that out. It's another nonstop... So biometric bag drop, which we have rolled out in two markets. Biometric identity and biometric boarding pass, biometric lounge access. The biometric boarding we've also done outside of airports. Biometric payment and age validation for alcohol, because you are your drivers license and you are your credit card.

Brian Kelly: Right. There's no fake IDs.

Caryn Seidman-Becker: Why are you...

Brian Kelly: I'm glad I already went through college.

Caryn Seidman-Becker: I know. I am ruining that for everyone. We don't have ubiquity yet, but when we do... And so the fact of the matter is that you're whipping... Just like you're taking out your driver's license and your boarding pass, it'd be your driver's license and your credit card. You are you. So you could literally in that curb-to-gate experience, from the time you enter the airport to the time you board the plane, take nothing out of your wallet, have a better customer experience. And it's not just the lines. What kills me is when people thought well, CLEAR is a line skipping company. It's no more a line skipping company than going to an ATM versus a bank teller. You don't think, "Oh, you're in line for the bank teller and I'm at the ATM machine," so you're just saying you're using technology for an automated process and that automation scales -- you could put eight ATM machines.

Caryn Seidman-Becker: And so we continue to grow CLEAR pods in the verification lanes in the enrollment so that you can verify eight people every one, one and a half seconds. Then you think about adding E-gates to that. You think about... I mean we have so many ideas. Our view is to be the innovation partner to airports, to airlines, to the government.

Brian Kelly: Let's talk about data because, you know, we're on the heels of the biggest Marriott breach and you must have an incredible amount of data on where people travel, what people are now buying. So how do you protect that? And what do you say to people who say, "No way, that's too much CLEAR. I want to give you...."

Caryn Seidman-Becker: So number one, go back to how we started, which is we bought this company and it had destroyed trust. And so from the very beginning, from Day One, it was about rebuilding that trust, and trust and integrity and protecting data. Securing data, protecting privacy has been part of our DNA from the very first day. And so it is incorporated in every aspect of our business, from the architecture to the policies to the process. It's really important that people know we will not sell or share their data. We sell experiences by securing your data and protecting your privacy. We've been banging the drum on that now since 2010. And so with everything that's happened in the past 24, 36 months, magnified over the last eight to 10 months, with what's gone on Facebook and other places, we just keep saying it louder and louder that we are about protecting your data. We do not sell or share data. It's a complicated world and it is so important to build that trust.

Caryn Seidman-Becker: And it's also important that that's why we have ambassadors bringing technology to life. I believe in technology and automation, but I think interesting to biometrics is humanity, whether it be your fingerprints or your iris or the humanity of our folks talking to people, our ambassadors and sharing and answering questions because trust is everything.

Brian Kelly: Thanks to the CEO and Co founder of CLEAR, Caryn Seidman-Becker. You can find that full episode, everything you need to know about CLEAR, in the Talking Points feed. It's episode #11.

Brian Kelly: Kristin Lemkau is the CMO of Chase. In our next Boss Lady segment she explains the evolution of the Sapphire cards in the future of credit card marketing. Here's Kristin.

Brian Kelly: Kristin Lemkau, your products have enriched TPG readers with points so they can travel the world. Thanks for sitting down with us today...

Kristin Lemkau: Thanks for coming.

Brian Kelly: ... and talking all about credit cards and loyalty. So you've been with Chase for over 20 years now?

Kristin Lemkau: Yes. Indeed.

Brian Kelly: Do you want to talk about your experience and rise to chief marketing officer?

Kristin Lemkau: Sure. I think it was a journey of a lot of hard work and a lot of people who believed in me maybe even before I did. And then a few happy accidents along the way. So I started as a PR person in the investment bank going back to 1998. I took the job simply because I wanted to be able to walk to work. So if you told me then that I would be in this role today, and this role would even exist, and the company would look like it does today I would've never believed it. I'm reading Beth Comstock's book and one of the pieces of advice that she gives that I think I had adhered to in my career is to take the job that no one else wants. Instead of fighting for turf or infighting, just take the thing that no one else wants and run, run to work. And so I think that was a pattern for me. And then I just ended up doing well at whatever I did.

Brian Kelly: The travel bug had bit you before working here, right?

Kristin Lemkau: Right.

Brian Kelly: Because you've been stationed all around the world with your position.

Kristin Lemkau: I was. Yeah. Only in New York here. But in previous jobs, I lived in the Indonesian half of New Guinea for six months where I was traveling to villages where they still filed their teeth down to a point. You don't want to ask why. I lived in Jakarta for a year. I lived in Madrid for a year, so it was really exciting. I love to travel. I still travel a lot with my family.

Brian Kelly: So, specifically when it comes to credit cards... So, I started The Points Guy in 2010.

Kristin Lemkau: Yep.

Brian Kelly: How do you describe credit card marketing over the last 10 years and how it's changed?

Kristin Lemkau: It has changed fundamentally. I say to my team all the time, "Payments and banking are getting disrupted at a pace like we've never seen like most industries. But marketing and the craft of marketing is getting disrupted even faster." So I think what's changed is marketers are getting much further upstream in the product development funnel, instead of at the end where they're just given something to sell. This is the era of the consumer. The consumer is incredibly smart. They do their research. This is an era of search, an era of navigation. You've got to have a rock solid value proposition in product and it's more important to spend your dollars there than it is on a big mass marketing campaign where you're not going to fool anyone if your product isn't awesome. And influencers like you've been a big part of that.

Brian Kelly: So let's talk about Sapphire because arguably, Chase was behind Amex when it came to proprietary cards. So you've been along for the whole Sapphire journey, right? So what was the initial strategy with launching the Sapphire product and how have you seen that evolve over the years?

Kristin Lemkau: Yeah, there's a great Harvard Business Review Study on Sapphire. If you're like a wonky marketer, you'll really enjoy it. You have to go back to '09, which, by the way, was not a great time to launch a credit card. So in August of '09, Eileen Sarah, the former president of the card business, and Gordon Smith, my boss, really saw some white space in the market where millennials and younger people didn't have an affinity or real loyalty for any card out there. So the original no fee card launched where you could go direct to advisor. There was a great fee... Sorry, there was no fee, but there was a great points offering. And then there was the 1.25% accelerator on airline travel. And packaging mattered. The card itself was gorgeous. There was no number on the front. The number was on the back.

Brian Kelly: Was there blowback at first?

Kristin Lemkau: A little bit.

Brian Kelly: I remember actually when we...

Kristin Lemkau: We called it the other front.

Brian Kelly: Because people would say, “I'm in rural Indonesia and my taxi driver needs to do an etching.”

Kristin Lemkau: Yeah.

Brian Kelly: And I remember then you guys came out with the etching above on the back. So you could actually do that.

Kristin Lemkau: You could, you could. But it really caught on, and we saw that there was some insight that people felt like there wasn't a card out there for them.

Brian Kelly: Well clearly it caught on because everyone else is doing it now. It is.

Kristin Lemkau: It did. We had 90% [inaudible 00:20:27] rates. We had 85% of people say they would refer a friend for that card. So we really tapped into something.

Brian Kelly: So, then you launched Sapphire Preferred with the big points bonus and then transfer partners. So for me as an affiliate marketer, I remember when it was almost soft launched. I feel like in the insider travel sphere and then...

Kristin Lemkau: Preferred?

Brian Kelly: Yeah. And what the transfer partners... You guys didn't really market that you could transfer United at first. I don't know whether...

Kristin Lemkau: No, you did.

Brian Kelly: Yeah, well we did. And then...

Kristin Lemkau: People figured it out.

Brian Kelly: Yeah. So Preferred for years was the top dog. And actually it's kind of crazy Preferred is still huge. Some people thought that Reserve was going to come in and completely cut that business. Has that been the case?

Kristin Lemkau: No, it's segmented really well. People choose which one is right for them. There are different value propositions, there are different price points and people find the card that works well for them. I think one of the things that we've learned with the Sapphire brand, and I think the millennial audience in general, for all of the research that's been done about them, what they really want is value. They're incredibly smart -- and influencers, again, help that value proposition. So when Preferred... sorry, when Reserve came out at a $450 fee, they immediately did the math and said, "Well, wait a minute, there's a $300 travel credit. There's a $95 fee for Preferred. If I do the math this a really great..."

Brian Kelly: If you did the math, if you spend $8 a day in travel or dining, you're making it up.

Kristin Lemkau: Check.

Brian Kelly: But there's still a huge portion of people that fundamentally don't want to have a $450 annual fee no matter what. Right?

Kristin Lemkau: Right. We have a card for you.

Brian Kelly: Yeah. So it was an exciting time. So Chase, you guys chose The Points Guy to launch Reserve as a strategic partner. It was a wild summer behind the scenes working on our strategy and social media and to see it launch that first day was... It's funny -- over the years, in 2011 Chase allowed me to start The Points Guy full time and grow it to where we are today. And then Sapphire really took it to the next level. So what was it like for you as CMO at the time to see it, the excitement build up and then the actual acquisitions go through the roof upon the first day we launched?

Kristin Lemkau: It was awesome. We blew through our annual estimates of how many cards would be acquired within two weeks. And back to the point of the marketing playbook changing -- this was the first time we saw it really, really play out, which was we put most of the marketing in the product benefit. The value proposition spoke for itself: 100,000 points, three times on travel and dining, $300 travel credit, you know all this.

Brian Kelly: Yeah.

Kristin Lemkau: And it just caught on. We dropped it in the market, sort of Beyonce "Lemonade" style, like, didn't really make a big formal announcement, didn't do the traditional product launch, [crosstalk 00:23:07] paid media.

Brian Kelly: Do people internally think you were crazy by not doing that traditional launch with the billboards and TV and traditional...

Kristin Lemkau: A little bit. But remember it leaked.

Brian Kelly: Yeah.

Kristin Lemkau: So we said, "Well, let's just get it out there and see what happens." And all of a sudden it just took off and you had the unboxing videos and you had the just sort of craze over the whole product. We did do a campaign later on, as you know, with James Corden, but this was like three or four months into the campaign and it was still kind of digital and niche-y. It wasn't a big TV blowout. And it worked. The consumer found it on their own. The consumers are really smart.

Brian Kelly: So talk about Sapphire banking. When you created this product, who is it for? What do you think the most unique thing about it is?

Kristin Lemkau: So we learned so much from the Sapphire cards, as you know. We learned that millennials want value, they want experiences and they want quality. If you look at that, the behavior we're really trying to drive is top of wallet and primary bank. Primary bank relationship is the stickiest. It's the foundation of a financial relationship. But yet no one knows the name of their checking account. No one has any loyalty to their checking account. They may have loyalty to their bank, but not their product, which doesn't make a lot of sense when you see how loyal people are to their credit card. So we thought, "Why don't we take the same insights and benefits that drove the Sapphire card and launch a banking product?" So value. No ATM fees -- we know that's the number one thing that ticks off customers. Even though there's a whole ATM network that you've invested in and logically you could explain it people don't want to have to pay to get to their money.

Brian Kelly: Especially when traveling abroad.

Kristin Lemkau: Oh, totally. On your ATMs or anyone else's. No foreign transaction fees, no wire transfer fees, basically no fees on everyday banking at large. We want free commission-based trading with you, investor trading product, which didn't exist a few years ago. We just launched that product so you can sign up and you can trade for free on your phone.

Brian Kelly: Oh wow.

Kristin Lemkau: Which is great. And then you can get experiences. Nobody gets experiences with their bank account unless you are a CPC customer.

Brian Kelly: I know. With the US Open when I went into (a) branch they were like, "Oh Mr. Kelly, do you want US Open advance tickets?"

Kristin Lemkau: Right, right. But for banking, people don't typically get that. We've seen with either a Chase lounge or a Sapphire lounge, that's really catching on. People want a place to go. They don't want to have to wait in line. They want a refuge. And so how can we scale that?

Brian Kelly: So even Sapphire Banking... Well actually you have to have a card to get Banking. So any Sapphire card holder gets free access to Chase lounges?

Kristin Lemkau: They get free access to Chase lounges. And increasingly we're having Sapphire lounges. We know customers love the airport lounge, and we have access to Priority Pass, and that's great. We want to be the go-to lounge when you get off the plane to the place you are going.

Brian Kelly: So there is no future of a Chase lounge in the airport. But what you're saying is you want to create these experiences outside?

Kristin Lemkau: Correct.

Brian Kelly: So do you have any new announcements? I know you've done Sundance for a while.

Kristin Lemkau: Yup. We want to scale. So we've done Sundance, we've done the South Street Seaport, we've done Outside Lands. We want to have a Sapphire lounge, and a Chase lounge, sometimes one, sometimes both. People don't necessarily want to be in a club, they want to be in a place with people like them where it's kind of a VIP experience inside of a great experience.

Brian Kelly: And also exclusive entrance lines. Is that something you're planning...

Kristin Lemkau: Yeah. Yup.

Brian Kelly: I hate waiting in line.

Kristin Lemkau: The blue carpet.

Brian Kelly: Yeah. My readers will kill me if I don't ask. So the 5/24 rule is a rule where, if you have five credit cards from any issuer over the last 24 months, you can't get one of the premium Chase cards. Why do you guys have that? And is there any chance of it changing in the future?

Kristin Lemkau: No. We have that because we want to be top of wallet. We want you to be engaged with the card. We want to have a relationship with you, we want you to be invited to accept other Chase products. You see gaming behavior in the card business, where people kind of chase a premium and then they exit the card as soon as they can. We really want loyal customers. And so the 5/24 rule encourages that.

Brian Kelly: So your advice is if you get a card just...

Kristin Lemkau: Use it.

Brian Kelly: Yeah.

Kristin Lemkau: It's a great card.

Brian Kelly: So, in terms of new cards, we've seen a big push into the tweener category, right? Between the $150 and $300 range, that new Southwest card, Amex Gold just bumped it ... do you foresee a Sapphire product between Preferred and Reserve?

Kristin Lemkau: Yeah. That Southwest card is a great card if you fly Southwest. We always look at it and we always see if there's a gap in the market that we can fill. We feel like we've got two really strong cards that are performing very, very well with Preferred and with Reserve. And now with Sapphire Banking really taking off, we think that's a very good mix, but we're always looking at it.

Brian Kelly: So, we've talked about millennials -- and Sapphires are clearly a hit with millennials. What do you think about Gen Z and looking forward the next five years in credit card marketing and how you think about that?

Kristin Lemkau: Yeah. You know, it's interesting with the millennials, so much has been written about them and (that) they're sleeping on couches in their parents' basement. The oldest millennial is starting to turn 40. So we're seeing this transition from the, "I want experiences over stuff, I want to live an interesting life" to, "I just don't want to live a boring life now that I'm getting married and having kids, but I need to figure out how to accumulate houses and investment accounts more responsibly." The Gen Z thing is interesting. They do seem to have a lot of the same trends of millennials. I have two of them in my house. But it will be interesting to see how their financial behavior adopts. Everything I believe is going to be done in the phone. My kids don't know how to turn on the TV. I can't imagine they're going to want to pay for things that's not either on the phone or contact list or something, but I think we're really just learning.

Brian Kelly: Have you guys been... I know my nieces and nephews all are just glued to YouTube.

Kristin Lemkau: Yeah.

Brian Kelly: Are you shifting your advertising funds into video a lot more?

Kristin Lemkau: Well I think the trend for marketers is: How do you become your own media company and your own content company? Because any advertising supported model is under threat. And as I said, my kids still don't know how to turn on the TV. If you go into digital, however you have bad ad units, you've got preroll, you've got midroll, you have things that even if the numbers say they work, you know the consumer hates. How do you come up with content that goes direct to the consumer? How do you become much more of an e-commerce company when distribution has been democratized? Because just supporting somebody else's content with an experience the consumer doesn't like, I don't think is sustainable.

Brian Kelly: And now to the fun part, Kristin. Are you a points girl?

Kristin Lemkau: Of course.

Brian Kelly: How do you use your points?

Kristin Lemkau: I am a Reserve-only girl and I took my family to Paris and to Kenya this summer all on points.

Brian Kelly: That was Kristin Lemkau, the CMO of Chase. Chase Ultimate Rewards points are some of my favorite points to earn and redeem. I think most of the TPG office would agree. The other cool thing about that episode is that TPGs very own senior credit editor, Sarah Silbert, explains the best ways to maximize your Chase points. It's episode #2. All right. Before we move on to hear from Joanna Geraghty, our third and final "Best of: Boss Lady," let's take a quick break.

(Commercial break.)

Brian Kelly: Welcome back to Talking Points. I'm your host, Brian Kelly. We're wrapping up this best of episode with Joanna Geraghty. She's JetBlue's president and COO. JetBlue announced transatlantic flights back in April, so I caught up with Joanna to hear about their expansion plans. Joanna also shares advice for women in aviation and how she worked her way up the company. Here's Joanna.

Brian Kelly: You guys finally announced -- instead of teasing about -- flights to Europe and the announcement was you're going to be flying to London?

Joanna Geraghty: Correct. Probably the worst-kept secret out there.

Brian Kelly: Let's go over it for anyone who's been living under a rock and hasn't heard.

Joanna Geraghty: Yeah, sure. So we announced recently that we'd be commencing service to London in 2021. We're very excited about it. It's been a decision long in the making. It's part of our Boston and JFK strategy. It's the top market that JetBlue does not currently serve out of both of those locations. And we are very excited to announce it. And as I said, it's been the worst-kept secret out there. Actually, the day before the announcement, our London pin got tweeted out. We call that a teaser.

Brian Kelly: And so why London?

Joanna Geraghty: You know, as I said, it's the top market that we don't currently serve. It's a big O&D market. So we think there's plenty of opportunity for better service and great competition. JetBlue does very well when there's an opportunity to provide better service at a competitive fare. And if you look at the fares currently in those markets, it's ripe for JetBlue.

Brian Kelly: Amen. And just ... so for those listening, O&D, what does it actually mean?

Joanna Geraghty: Origin and destination. So a lot of people on both ends.

Brian Kelly: Yeah. Business travelers, meaning that the JFK to London is the round trip. Connecting traffic will be part of the strategy but the majority of the tickets you plan to sell will likely be Boston to London and vice versa.

Joanna Geraghty: Correct. Yeah. We built our business case just on orginating... on origin and destination traffic on JetBlue. So a partnership will still be a part of the strategy but it's not dependent on partnership.

Brian Kelly: This is a question I'm interested to ask you, because we're launching The Points Guy in the UK. It's our #2 market, still small compared to ... you know, we're pretty well known in the US. I mean, it's 2021 but are you going to start building the JetBlue name in the UK for those people on the other side of the pond?

Joanna Geraghty: Sure. So we have a pretty good reputation already. We do have more than 50 airline partners and we partner with carriers over in Europe. So, we will likely leverage our partner airlines.

Brian Kelly: And TAP is a big one, right?

Joanna Geraghty: TAP is a big one. Aer Lingus. But we definitely have opportunity to do more brand building on the European point of sale and we look forward to doing that in the coming months.

Brian Kelly: Now you haven't discussed fare pricing because we're still a couple of years away, but the strategy will be similar to what you did on the transcon market -- come in and...

Joanna Geraghty: And disrupt.

Brian Kelly: ...disrupt.

Joanna Geraghty: Yeah. I think if you look at what we accomplished in Mint, it's been simply remarkable. When we started, fares, walkup fares were well in excess of $5,000 and we have driven those prices down by significant numbers. We've also, with the service that we offered at Mint, introduced a level of service that just did not exist before Mint.

Brian Kelly: Yeah.

Joanna Geraghty: There was, I think, one market that had a lie flat seat when JetBlue launched -- now 10 markets at West have a lie flat seat. And that's because we came in with a better product, better service and a lower price and forced everybody to raise their games.

Brian Kelly: The food on Mint is truly tapas style. So you get to choose three smaller entrees, but it is freaking delicious.

Joanna Geraghty: I think you've flown Mint more than I have.

Brian Kelly: I always sit on Mint and I'm, like, moaning. I'm like, "Yeah," I'm, like, licking my fingers. Like, throw my hands up in the air. It's like actual food that you would, in a restaurant, be very satisfied with.

Brian Kelly: All right Joanna, I know we just jumped right into it, but let's learn a little bit about you because you know you've been at JetBlue now for 14 -- over 14 years.

Joanna Geraghty: Yeah. Over 14 years.

Brian Kelly: And before that you were a lawyer?

Joanna Geraghty: I was a lawyer. Yes. You were at Morgan Stanley though, so...

Brian Kelly: How does one girl...

Joanna Geraghty: [inaudible 00:33:36].

Brian Kelly: I know, I know. How big was JetBlue when you joined?

Joanna Geraghty: So JetBlue was 34 destinations, 9,000 crew members. And to put that into context, we are 22,000 members now and 103 destinations.

Brian Kelly: Wow. How does one go from being a partner at a high-powered New York law firm to now essentially running day-to-day operations at a top airline?

Joanna Geraghty: Yeah, I mean, I loved being lawyer. I always had a lot of fun -- very detail oriented, represented airlines and aircraft manufacturers. That was the space that I was in before I joined. I did litigation and regulatory work. And then I joined JetBlue in the legal department. I was actually outside counsel for JetBlue for several years.

Brian Kelly: So you know the airline, especially in senior management, is very male heavy. For women who want to get into aviation, a very male heavy industry, what advice could you give to someone who wants to get in and get into a position of power like you have?

Joanna Geraghty: Yeah. I think take risks. For me, I've had a lot of different jobs at JetBlue. I was head of our people department. I ran our customer experience department, so an operational role for four years. And all those things were new to me and some more exciting than others, but you learn something in all of these new opportunities. And I think taking risks is really important. And applying for jobs, even if you don't have the exact set of skills required, I think it makes sense to put your hand up because you never know what may happen. I often think women sometimes are reluctant to put their hat in the ring, so to speak, because they don't have all the qualifications. That's something a little unique to women and you shouldn't shy away from doing that.

Brian Kelly: Which of your roles were you most nervous about right before taking, when you got put in a whole different division?

Joanna Geraghty: I think taking the head of HR. Taking the head of our people team, I was chief people officer for a while. And I went from managing a team of about five to 300. And that was a big difference because all of a sudden you start really thinking about how you lead and how you rally that number of people around a common mission and vision. And all those leadership books that you read become very important and make a lot of sense in that context. Whereas before, I had a great team of lawyers that worked with me who are very, very much self-starters and individual contributors. And this change into the people role was a big step for me.

Brian Kelly: And as president and COO, what does a normal day look like?

Joanna Geraghty: A normal day. There's always a lot of emails, but yeah, I think everybody has that challenge. But a normal day, I spend my time looking at our operational performance. So a lot of dashboards, a lot of metrics, making sure that we're performing in the ways we need to perform. And then are there opportunities that I identify or my team identifies that we need to address. Taking a look at our revenue, obviously, and how our daily bookings are amounting to, then a series of meetings on different initiatives. I also spend quite a bit of time out in the field. JetBlue is a very hands-on airline. When we fly, we introduce ourselves to the crew. We raffle off free tickets. We help our inflight crew members...

Brian Kelly: Do you ever fly incognito?

Joanna Geraghty: No, absolutely not. You know, I think spying on people is not the culture at JetBlue.

Brian Kelly: Yeah.

Joanna Geraghty: It's important and I want our crew members to feel that they can talk with me on our flights and let us know what their problems and challenges are so we could look for ways to solve those. We have 103 cities, as I mentioned -- I've been to, I believe, 65 of them. For over two years Robin and I, our CEO, he and I kind of split the network and tried to hit all hundred cities.

Brian Kelly: Transitioning back a little bit -- the London news is so big for you guys, but it is also a risk. There's a lot of big competitors. I mean, are you still considered a low-cost carrier? Do you still consider JetBlue...

Joanna Geraghty: Absolutely, yeah. I mean, it's part of our DNA. Keeping our costs low was one of the ways that we are able to be competitive with the legacy carriers. When we go into new markets -- so the Detroits, the Atlantas, that are heavily dominated by legacy carriers -- they respond by reducing fares and try to [crosstalk 00:37:39].

Brian Kelly: And cursing you guys.

Joanna Geraghty: And cursing us. Yeah. And trying to wait us out. And one of the ways that we can last longer in those markets is by making sure we have low costs. Yeah.

Brian Kelly: You're not worried that this is taking on... biting off a little more than you can handle?

Joanna Geraghty: I think we're definitely confident that we'll succeed. As I mentioned, large O&D market here. We're not relying on partnerships to feed our network. The play is largely around the Mint product, and with our success in transcontinental Mint, we're confident that we can bring a reimagined experience here. We do have more than 50 airline partners and we can work with them and really enhance those relationships. But it a different... it's different. We'll be able to feed the network out of the United States.

Brian Kelly: A lot of our or my fans, every time I fly Mint, they're like, “When can I get it?” And JetBlue is very coastal. What's holding you back from really getting that cross-section in the middle of the country into the network? Is it slots in New York or just strategy?

Joanna Geraghty: I mean, we have six focus cities -- Boston and New York, Fort Lauderdale, Orlando, San Juan and Long Beach -- and our strategies have been largely about building relevance in those cities. We grow between 5 and 7% a year, it's important for us to maintain that level of growth, around sort of that area. And what that means is we aren't going to bring in 40 planes a year to just add cities. We have to be controlled with how we do it and make sure that we're building our margins at the same time. If we had all the planes in the world there would be a lot of cities that would be really exciting to fly to, but we need to be measured. We are the only airline since deregulation -- 1978 -- that has not gone bankrupt or merged or been acquired. And that's an absolutely remarkable feat when you think about 1978 and how many airlines have come and gone during those years. And part of the way you do that is by being very measured with your growth, running a smart, strong business. Costs are a huge component of that. Delivering a great customer experience and having a different unique culture.

Brian Kelly: Now I know JetBlue, in maintaining those costs, used to include a free checked bag several years ago -- that went away. Are there concerns that Wi-Fi will be charged for? And the ancillary fees is a huge way to bring in revenue. What's your take on the future of JetBlue changing that inflight model?

Joanna Geraghty: Yeah, I mean we have no plans to change the inflight model with inflight entertainment. Free televisions have been one of the marks of JetBlue since we were founded. We know customers fly Jet Blue because of our extra leg room. We have the most leg room in core of any carrier in the United States.

Brian Kelly: I will fly... My sister lives in Jacksonville. I fly JetBlue home even on an economy flight because their leg room is way bigger than even first class on the regional jets.

Joanna Geraghty: In some cases, yeah. Yeah, and then free entertainment has been a big component. I think by my most accounts the best Wi-Fi in the sky. And then our friendly service. So those are the three big things that differentiate JetBlue from the rest of the competition. I'll kind of emphasize the friendly service because that is really, we think, the secret sauce behind JetBlue. But yeah, it's been what's brought us this far and will carry us into the future.

Brian Kelly: That was JetBlue's president and COO Joanna Geraghty. The full episode is #18. That's it for our "Best of Lady Boss" episode. You can listen to the full versions and more at or wherever you get your podcasts. Please make sure to subscribe to Talking Points for free and share everywhere. Tell your friends, tweet the podcast, post it to your story, subscribe to it on your mom's phone for her. And check back each week for more episodes, dropping now on Wednesdays. I'm Brian Kelly. Safe travels.

Featured image by Photo by The Points Guy

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