Switchfly was founded in 2003 as a travel technology startup. Today, Switchfly is a travel experience platform that allows brands to create memorable moments for employees. As a concept, the company is the silent partner in many of the major loyalty programs that consumers recognize. For the last 20 years, the company has been behind many of the loyalty points programs in financial services and the airline industry, which reward and engage consumers with travel. When consumers take points earned through a credit card to pay for travel, Switchfly works behind the scenes, applying those points to hotels and flights. The company also services car rentals and activities globally.
About 18 months prior to sitting down with Loyalty360, Switchfly began to focus on Human Resources and Rewards and Recognition for Employee Engagement in corporate America. Internal customers—employees—have many of the same expectations and wants in a loyalty program as a brand’s external customers.
Mark Johnson, CEO of Loyalty360, spoke with Nowell Outlaw, CEO at Switchfly, about effectively engaging employees with loyalty program benefits, modernizing tools in the travel ecosystem, and leveraging technology to make “smart” recommendations for customers.
Defining Customer Loyalty
For Outlaw, customer loyalty is the ability to attract and retain customers. He cites the travel industry as an interesting example of how loyalty can play out when a customer is considering a purchase.
“Most consumers interested in traveling will look at many different websites to compare prices,” begins Outlaw. “However, customers will typically buy from the place where they have earned points. Even though people look in other places for the best deal, in travel, there’s a significant chance that they’re going to redeem using those points.”
Switchfly considers how it can drive a better experience for customers who are specifically engaged with travel. Ancillary value add is of importance to brands as they seek ways to increase the perceived value of their programs and differentiate them from others. Brands often struggle to make their programs stand out, and Switchfly enables them to achieve that differentiation.
Outlaw notes that, specifically in financial services, travel has been a part of many rewards programs for a long time (e.g., American Express or Chase points). Switchfly has also determined that within companies, employers are incentivizing employees with novel rewards, including travel and experiences. The vast majority of employers offered gift cards or swag, with few exceptions.
“For example, an employee might receive a headband, a tee shirt, or a gift card, but what they want is memorable experiences and travel as part of their employee benefits,” explains Outlaw. “We have unlocked a new area in loyalty. It’s not just brand loyalty. It’s employers providing effective loyalty programs for their employees.”
Gift cards do not necessarily differentiate product offerings, and they don’t create a memorable experience that can be tied back to the brand. Gift cards are seen as table stakes in modern offerings, making it difficult for brands to differentiate their unique value proposition. A rise in gift card fraud is also an issue, and impacts loyalty efforts.
Employee Engagement
Switchfly offers tools that brands can leverage to offer unique and valuable travel experiences to recognize and reward employees. Many of these brands have never offered travel as a benefit in their programs.
“We’re seeing tremendous success, charting both revenue and customer growth,” says Outlaw.
“We consistently see this with the brands we help. Employees are waiting for travel. They’re tired of the headbands, tee shirts, and gift cards.”
Unlocking the travel channel makes a difference, and new avenues where people thought there weren’t opportunities before are now available. This has been truly engaging for Switchfly’s clients, and their customers are coming to them and asking for more.
“In a traditional program provider, like an airline company, more perks are being added, such as unique experiences,” shares Outlaw. “If you’re a points program holder for an airline—for example, a credit card company—you will be offered things you can’t get from other channels.”
Switchfly sees these additions as contributing to program success and creating truly amazing opportunities—for example, staying in an Italian villa, an experience that might be earned through American Express that a member couldn’t earn elsewhere. Opportunities like this drive consumer loyalty and encourage members to stay with the brand, card, or airline.
While Switchfly has witnessed a couple of brands executing a single type of experience for employees—like swimming with dolphins—they haven’t necessarily been successful. Employees, like external consumers, want choice. It’s not enough to only offer activities.
“It’s not enough in the mix to encourage the consumer—ultimately, the employee—to really engage for that channel,” says Outlaw. “Having the ability to offer flights, hotels, activities, car rentals, experiences—the cradle-to-grave sort of things that you would want to do in life—is critical.”
The State of Customer Loyalty
Loyalty360 recently completed its State of Customer Loyalty, in which brands were asked about their programs—whether they were planning to add enhancements or functionalities.
“There’s definitely a need to be more modern, and I’m talking from a travel perspective,” says Outlaw. “Consumers have expectations around the features, benefits, and functions of a program and how it should work.”
Switchfly has noted a trend toward a modernization of tools in the travel ecosystem. Many existing tools have fallen behind in capabilities and presentation. Outlaw cites mobile interfaces as one area that’s lagged behind even though it’s something that should have been fixed 10 years prior.
Switchfly’s clients are also seeking new ways to enhance the customer experience. Modernization in tech should include making suggestions that are relevant to the consumer.
“If you think about Netflix, and you’re an action junkie, the next movie that’s recommended should be an action movie,” says Outlaw. “If you’re a rom-com person, you’re going to see a bunch of suggested rom-com choices. In travel, consumers want the power of the machine to suggest things for them. In other words, if I’m searching online, don’t offer me a two-star hotel if you know I always stay in four-star hotels.”
From Fragmented to Flexible
According to Outlaw, Switchfly sees many fragmented customer loyalty programs. Consumers become frustrated when they can’t combine points from Organization A with points from Organization B and then apply them to something they want.
“In the future, organizations need to work harder to figure out how to share points balances,” asserts Outlaw. “Some brands don’t necessarily want to let that happen because they want people to come back and spend with them.”
Outlaw believes that over the next 5–10 years, programs will be more open, and people will have the flexibility to move points around.
Smart Recommendations
Outlaw spent five years in the machine learning (ML) and
artificial intelligence (AI) space and believes that people, especially in travel, want “smart” recommendations. Most people, when engaging with travel, need to figure out how to navigate search—for example, searching for the right trip between New York and Las Vegas.
“If you have a good profile, if you’ve provided good information, the machine can start to recommend things for you to do,” says Outlaw, noting that ChatGPT will build a complete itinerary of where to go on a trip.
The Future
The team at Switchfly predicts that the travel space will start to be more suggestive for people about things they can do and places to go. From a more personal perspective, Outlaw nods to United Airlines for travel, which he sees as doing a great job with its points and redemption program. He also cites American Airlines as having a “phenomenal” points program.
“They have over 100 million users in that program, and the rewards and things that they’ve offered members are absolutely phenomenal,” finishes Outlaw. “There are things you can get that you may or may not know about—like courtside seats to NCAA games. You can ‘buy’ those experiences with your points, which is pretty amazing.”
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Quick-fire Questions
What is your favorite word?
Whimsy.
What is your least favorite word?
Taxes.
What excites you?
Helping other people.
What do you find tiresome?
Accounting.
What book do you like to recommend to colleagues?
Love Does, by Bob Goff.
What profession other than your own would you like to attempt?
I would probably like to be a pastor of a church.
What do you enjoy doing that you don’t get to do often?
Sailing.
Who inspired you to become the person you are today?
I had a great mentor in my life who passed away a year ago. His name was Gerald Henderson.
What do you typically think about at the end of the day?
I think about my kids and my family. All the things that are good in life.
How do you want to be remembered by your friends and family?
Generally, doing the right thing for the world. Having an impact.