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.
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.
Speaker 1:
Good afternoon and good morning. This is Mark Johnson from Loyalty360. Hope everyone's happy, safe and well. Want to welcome you to another edition of Loyalty Live and the series. We speak with leading agencies, technology partners and consultants in customer channel and brand loyalty about the technology trends and best practices that impact the brand's ability to drive unique experiences, enhance engagement but, most importantly, impact customer loyalty. Today we have the pleasure of speaking with Noel Outlaw, who's a Chief Executive Officer at SwitchFly. Welcome, Noel, how are you?
Speaker 2:
I'm good, how are?
Speaker 1:
you Doing well, thank you. Thank you for taking the time to speak with us today. Sure, looking forward to learning more about you and SwitchFly and, first off, when we start these, we like to get to know the individual we're speaking with a little bit more, so we'd love to know a little bit about yourself, your current role at SwitchFly and maybe your background that led up to SwitchFly.
Speaker 2:
Sure. So you know, what's interesting is I never thought I'd be in the travel industry, right? I am a serial entrepreneur at heart and have always started, run or turned around other businesses. My last company before AI was a big thing. I ran as a CEO of a Series C venture backed AI machine learning company in the Bay Area for five years and completely randomly, was called by our owners. We're owned by Golub Capital, who's a $65 billion private equity debt lender, debt credit company, who had this company called SwitchFly, and it was during COVID. After COVID and I started having a couple of conversations with them and I thought this is pretty interesting, also because SwitchFly was in Denver and I live in Boulder and I didn't want to be on an airplane commuting, and so one thing led to another and I ended up kind of at SwitchFly. It was a completely random thing. I was actually three days away from taking a completely other job in machine learning Interesting.
Speaker 1:
For those who may not be familiar with SwitchFly, can you discuss how SwitchFly supports brands' customer loyalty efforts? Can you give us a brief overview of what you do, how you do it and what industries you support?
Speaker 2:
Sure, so SwitchFly is a 20-year-old company and I jokingly tell people we're the silent, silent partner in a lot of major loyalty programs that you probably know. So American Airlines has their Advantage program, american Express has their Loyalty Points program, jetblue has their Points program, japan Airlines is a customer points program. Japan Airlines is a customer.
Speaker 2:
Switchfly has actually been behind the loyalty points programs in financial services and air for over a period of 20 years. Right, a lot of those customers have been customers for well over 10, if not 15 years as clients and they're using their loyalty points to essentially reward and engage for consumers with travel. And so if you are earning points on a credit card behind the scenes, you're actually using SwitchFly to buy your hotel, buy your flights, cash in your points. Same thing with airlines. So if you go to American Airlines vacations, for example, you can actually log in, use your Advantage number, get a package vacation. Everything that you're looking at is SwitchFly. You wouldn't know it, but that's what's happening. And the other brand or area that we started focusing in about 18 months ago was we started focusing on human resources and rewards and recognition for employees as a loyalty measure in and around corporate America.
Speaker 1:
Excellent. When you look at customer loyalty, it's obviously very germane and relevant to us, and it's a growing area of interest with brands, as you know.
Speaker 2:
But we always like.
Speaker 1:
To understand how different technology partners, agencies and brand marketers define customer loyalty. So how do you define customer loyalty and what does it mean to your organization?
Speaker 2:
So for me, it's the ability to both retain and attract customers, especially in travel. There's some interesting factoids around travel specifically, which is most consumers will go and look 26 or 28 different times for different websites to price compare. However, customers will actually buy from the place that they have points. So even though people are looking all over the place for the best deal, the way it works out is that in travel specifically is if you have points at that place, there's probably a 90% chance that you're actually going to redeem using those points right. So our perspective is how we can drive a better travel experience for those customers when they're engaged with travel specifically.
Speaker 2:
Does that make sense?
Speaker 1:
Absolutely yeah, okay, and that ancillary value add is very important to brands, right, because they're looking for ways to increase the value of the program, the perceived value of the program, to differentiate the program. Brands are really struggling right now with differentiation of the program. Do you feel a unique kind of void or opportunity in achieving that?
Speaker 2:
Yeah, I mean, I think in financial services specifically, travel's been a known thing for a long time. Everybody's got their Amex points, their Chase points. Travel has been inundated in financial services employees specifically is that a lot of employers and a lot of those programs were just servicing with gift cards or merchandise. So you know hi, you work for, you know Johnson and Johnson and you can get a headband and a t-shirt or a gift card right. And what we found is that employees specifically wanted you know experiences and travel as part of their benefit, if you will. And so we have unlocked kind of a new area, I think, and it is loyalty right, it's just not being portrayed as brand loyalty, but it is employers providing effectively loyalty programs for their employees. Yeah, Absolutely.
Speaker 1:
Yeah, that's very interesting as well. And also when you look at some of the fraud issues you have with gift cards right, and gift cards aren't going to differentiate the product offering, they're not creating a memorable experience that you can tie back to that brand value proposition. But there's also challenging issues right now with fraud too. Right, so much gift card fraud, and I mean so. If that happens to be a situation where it impacts that experience, it's going to be deleterious to that brand as well. Not say it's going to happen, but just with the rise in gift card fraud and it's know, challenged all the way around. When you look at the programs you run for your clients, what is working with your clients when it comes to building successful loyalty programs and strategies? Can you provide an example or two?
Speaker 2:
Sure, and specifically, a lot of the programs that we're talking to has never had travel Right, and so we are seeing tremendous success. Specifically, a lot of the programs that we're talking to has never had travel right, and so we are seeing tremendous success. I have charts that look. You know everyone talks about having hockey stick. You know charts and revenue, growth and customer growth and all that other stuff. We see that consistently with the brands that we help launch through employers. So I have hockey stick charts of growth and adoption from employees who are basically waiting for travel right, and what we're seeing is that one unlocking that channel, because we have a lot of people that are tired of the headbands and the shirt and they're tired of getting the gift cards and all of a sudden you have a new avenue to do this and we're not talking. We're selling a hundred thousand000. We're closing a million dollars a month in sales through one customer, and so a lot of this revenue.
Speaker 2:
I think there's a pent up demand for that. So what we're seeing is that it's unlocking new avenues where people thought there weren't opportunities before and that's been truly engaging for those customers. So now their customers are basically coming to them asking for more things, right? Can you do this? Can you add that? Can you add more experiences? What we see our traditional program providers, so like an airline company doing is they're adding more things to add more unique experiences to the mix, right? So if you're a points program holder for an airline, let's say, or a credit card company, they're going to offer you things that you can't get from other channels, and those are the things that we see that are being super successful. So, if you want to go and stay in a villa in Italy, there are ways you can get that through, let's say, american Express, that you can't get through anywhere else in the world, right? And those kinds of private kind of things, and they're all driving for consumer loyalty to stay on that brand or that card or that
Speaker 1:
airline that's awesome and when you look at employee engagement you talked about that a little bit it's definitely an area of interest, with our audience trying to drive that deeper emotional connection with the employee that can impact the brand experience as well. Can you talk about some of the tools that you offer brands that they can leverage to offer unique and valuable travel experiences to recognize and reward employees?
Speaker 2:
Sure, I think the interesting thing is that we've seen a couple of companies that, in this space, have tried to capture a single type of experience like swim with the dolphins or do things like that. They haven't necessarily been successful, because the consumers want choice, right, what? What you need to make sure that you have is the full breadth of choice, right, because there's a lot of people like, well, we're just going to offer, you know, just activities for people and it's not enough in the mix to encourage the consumer, ultimately the employee, to really engage. For that channel it's like, oh, you know, now you've opened up the world to me and so, you know, having the ability to offer flights, hotels, activities, car rentals, experiences, kind of the you know cradle to grave of things that you would want to do as a human in a I'm going to go take a trip, I'm going to take a vacation is what you, what you really have to be able to, um, to offer absolutely.
Speaker 1:
and when you look at uh kind of the state of customer loyalty, we did, uh, we do a yearly report on the state of customer loyalty, talking to brands about what they're seeing with regard to the program, where, where they're going, what have you the interest in redoing or enhancing or adding functionality to the program is top of mind right now for brands. What are you seeing around program relaunches or updates, and what are your clients looking for?
Speaker 2:
You know it's interesting. You know it's interesting. I have four different potential. A travel perspective Consumers have expectations now around the features and benefits and functions of a program and how it should work, and what we see is I see a trend of modernization of those tools.
Speaker 2:
There's a lot of tools in the travel ecosystem that are old right and the tools actually haven't been brought up to speed where, as an example, you know they don't have a good mobile user interface, right and now you'd think, wow, well, that's really something that we should have fixed 10 years ago. We have a lot of people looking for new, modern tools, and the way I talk about it with what we do is and the way I talk about it with what we do is if you think about Netflix, if you're an action junkie, the next movie that you see should be an action movie. If you're a rom-com person, you're going to see a bunch of suggested rom-com things. What we see in travel is that consumers want the power of the machines to suggest things for them. So if I'm doing a search, don't put me in a two-star hotel. If I know, I always stay in four-star hotel places.
Speaker 2:
And so there's this tech modernization to suggest things that are relevant for the consumer, that we're starting to see in the requirements from these programs.
Speaker 1:
When you look at the next generation of customer loyalty it's another area that's very germane and relevant to brands understanding where loyalty is going what do you look at or how do you define or what does next generation loyalty mean to you and to Switchfly?
Speaker 2:
I think that what we see a lot of is, unfortunately, loyalty programs are fragmented, and what I hear a lot of from people is how come I can't take points A and combine them with points B and spend them on point C?
Speaker 2:
And I think that in the future there needs to be more work between organizations to figure out how to share those points balances work between organizations to figure out how to share those points balances because I hear that on a regular basis, which is, you know, I've got my chase sapphire points or I've got my you know hilton honors points or I've got my whatever points. Is there a way for me to spend all this together on a single trip? Right, and I think that's um, that has to start happening for people so that they can exchange I. I know that the brands themselves don't want to let that happen, necessarily, because they want people to come back to them to be able to spend things there. But I think over the next five or 10 years you'll actually start to see that where things are more open and the flexibility to move points around, Okay, what's the next big thing that brands can expect from technology pertaining to customer military experience?
Speaker 1:
You know the switch fly. Have kind of any, any ideas or new technology they're looking to launch over the next year or so?
Speaker 2:
You know, I spent five years in the machine learning and artificial intelligence space and I think it's not without not without a lot of life lessons in doing that. But I would say that people, especially in travel, they want recommendations that are smart to them, and if you think about most of the way people engage with travel, it's you have to figure out what to do and you have to go to the engine to say, okay, I'm looking for a trip from New York, I want to go to Vegas, I want to go to San Diego or whatever it is, and there's so many amazing places in the world that if you have a good profile, if you have some good information, the machine could start to recommend things for you to do, right, if you go to ChatGPT, chatgpt will build you a complete itinerary of where to go on your trip, right, and I think that the travel piece will start to be more suggestive for people about neat things to do and fun places to go.
Speaker 1:
Okay, are there programs you admire that you're loyal to from a customer loyalty perspective? And if so, what do you like about their offerings?
Speaker 2:
Personally, I'm a big you know United fan. I use United for work travel, everywhere I go, and for personal travel. I think they're great with. You know their points programs, redemption programs, everything that they do you know. I also, you know, american Airlines points programs are phenomenal. They have, I think, over 100 million users in that program and the rewards and things that they're offering their program members are absolutely phenomenal. There's things you can get that you may or may not know you can get, but you know, if you want courtside seats to you know NCAA or things like that, you can actually get those things with your points, which is which is pretty amazing, absolutely.
Speaker 1:
Okay. Well, thank you very much for that Very interesting discussion with regard to what you're seeing in the industry and how travel and unique incentives can drive great engagement with brands, because brands are struggling with that. So great to hear your perspective. Now we have the fun quickfire question, where we have one word or short phrase answers, where I get in trouble with the content team and I don't like being in trouble anymore than I already am.
Speaker 2:
So, first off, what is your favorite word? My favorite world word is whimsy. Okay, what is your least favorite word?
Speaker 1:
Taxes.
Speaker 2:
What excites you?
Speaker 1:
You know, helping other people Okay.
Speaker 2:
What do you find tiresome?
Speaker 1:
Accounting. What book do you like to recommend to colleagues?
Speaker 2:
Love Does by Bob Goff. Okay, what profession other than the one you're currently in. Would you maybe like to attempt I?
Speaker 1:
would probably like to be a pastor of a church. Oh, wow, okay, what, uh, do you enjoy doing that? You don't often get time to do.
Speaker 2:
Uh sailing.
Speaker 1:
Okay, awesome, uh. Who inspired you to become the person you are today?
Speaker 2:
Uh, I had a great mentor in my life who actually passed away a year ago.
Speaker 1:
His name is jerry henderson um, and it was it that's awesome, okay, and what you typically think about at the end of the day I think about my kids, my family and you know all the things good that are good in life how many kids do you have? Two Perfect.
Speaker 2:
And how do you want to be remembered by your friends and family? You know usually generally doing the right thing for the world.
Speaker 1:
You know, having an impact, okay, perfect. Well, noel, thank you very much for taking the time to talk with us today. It was great getting to know you a little bit more and also getting to know Switchfly and how you're working within the customer loyalty industry Very impactful, and looking forward to hearing more from you and the team throughout the year. All right, thanks, mark. All right, Thank you, and thank you everyone for taking the time to join us today. Make sure you join us for another Distributed Wealthy Life soon and until then, have a wonderful day.
