Travel Buddy with Switchfly | What Makes a Travel Incentive Program Best-in-Class?

In this episode of Travel Buddy, Nowell Outlaw, CEO of Switchfly, unravels what truly makes a travel incentive program best in class. He discusses the complex realities behind building successful travel rewards, from strict regulations and vendor relationships to understanding consumer needs and delivering memorable experiences. Nowell draws on his years of expertise to share candid insights, surprising industry details, and actionable advice for creating loyalty programs that drive emotional engagement and brand value. Tune in for a behind-the-scenes look at the strategies and challenges shaping today’s top travel incentive programs.

Chapters
(00:00) Defining a Best-in-Class Travel Incentive Program
(01:00) Navigating Industry Complexities and Regulations
(04:00) Designing Within Constraints and Understanding Consumer Needs
(07:00) Leveraging Data and Personalization Tactics
(09:00) Integration and IT Challenges in Program Deployment
(12:00) Building Essential Vendor and Partner Relationships
(15:00) Delivering Emotional Impact and Brand Value through Travel Incentives

Connect with Switchfly
Website: https://www.switchfly.com/
LinkedIn: https://www.linkedin.com/company/switchfly/
X: https://twitter.com/switchfly
YouTube: https://www.youtube.com/@SwitchflyOfficial

Creators and Guests

Host

Nowell Outlaw

Chief Executive Officer of Switchfly

What is Travel Buddy with Switchfly?

See more at Switchfly.com

Welcome to Travel Buddy,
presented by Switchfly.

In this podcast, we talk about all
things travel, rewards, and loyalty.

Let's get to it.

Brandon Giella: Today we're talking
about what makes a travel incentive

program best in class, and today
we're featuring yet another episode

with Noel Outlaw, CEO of Switchfly.

Now, you have a, a, a guest
appearance on a panel coming

up at the IMA in later July.

So IMA is Incentive Marketing Association.

And so please, look forward to that.

there might be some content coming
around around there on Tuesday,

July twenty-first, talking about
designing a best-in-class incentive

and recognition program amongst
other experts on the panel.

And so, today you may hear a
little bit of construction.

We haveâ¦

We both have construction going
on in our places of business.

so if you don't hear that, great.

but what I wanted to talk to you
about really briefly, Noel, if

you could define for us how, how
you would classify, categorize, or

define a travel incentive program.

What do you mean by that?

Or what do those words mean to you?

Nowell: You know, it's really
kind of end-to-end travel

redemption engine, right?

So if I wanna go to Hawaii, if I wanna
stay in Hawaii, I wanna rent a car in

Hawaii, I wanna, you know, do scuba diving
in Hawaii, like it's, it's comprehensive

kind of end-to-end when you think about
everything that's connected to travel

that I wanna be able to plug all those
things into my incentive system to

incentivize people to redeem, for those

Brandon Giella: Okay.

Okay.

Now, to build a program like that, I'm
sure you get lots of people saying like,

"Oh, well Claude can do that," you know?

Or, "I could vibe code my way to
building a travel incentive program."

And Noel is

like, "Yes, sure, but maybeâ¦"

What would you say?

Nowell: you know, I think
people underestimate the

complexities of travel, right?

And Just from a, you know, travel is
actually legally regulated, right?

So you can't just go and
open up a travel shop, right?

I guess you can, but if you want to have,
you know, sell things in Hawaii, you

need to have a bank account in Hawaii.

If you wanna do things in
California, you gotta have a bank

account in California, right?

So there's specific state regulatory
rules just from being a travel agency.

If you do it in Europe, there's insurance
and there's all this other stuff.

So no amount of vibe coding is gonna get
you away from the regulatory frameworks

that have been in and around travel, which
has been this way for 25 years, right?

And then the second tier becomes, well,
who's gonna be your supply partner, right?

And how much are they gonna
want to, be your partner, right?

So pick up the phone, call Expedia.

They might not call you back, right?

And Expedia's one of our partners.

They're awesome, right?

But if you're a small, you know,
a smaller incentive program, they

don't necessarily have the resources
to bring you on board and, and, and

really be your partner the way you
want them to be your partner, right?

and then you start adding the complexities
of multiple hotels, flights, cars, all

these other things, and the accreditation
that's required and, legal stuff that's

required behind the scenes to do that.

it's a big lift to build travel

Brandon Giella: We have had a, a couple
of episodes talking about some of that

complexity, but I wanted to lead with that
because when, you know, you're thinking

about designing the best-in-class travel
program, I'm sure a lot of leaders that

are listening to this, this episode
or will be in attendance at IMA in

a couple of weeks are thinking like,
"Yeah, I've got all this great vision."

and then of course, there's these
new tech advancements in AI.

Maybe I could build some things.

But I wanted to lead with
that because best in class is

within certain constraints.

You know, within the technological
environment, within regulatory

environment, within budgets, within
what you can do with data and

privacy and analytics and so on.

So I'm glad you're, you're, you're on
the same page with, you know, just the,

the amount of just the grunt work that
you guys have put in for decades, you

know, building these kind of programs,
that this is, this is not easy to do.

So within that, when we're
thinking about designing a perfect

program, the best-in-class program,
what does that mean to you?

What does best in class actually look
like when you have a fixed budget

and it's not an ideal scenario?

But it's something that, you know,
you've, you're within the line item

within your business, and you're
trying to grow your business, of

course, but you got constraints.

What are the things that you would
recommend focusing on for that,

in that constrained environment
for some of these leaders?

Nowell: I, I think it's one-- I
think it's really understanding your

consumer and what you're trying to

Brandon Giella: Hmm

Nowell: done, right?

Because, not all programs
are equal, right?

And the construction's really going now.

you know, if you think about, someone
who has a Platinum Card with American

Express is much different than someone
who only has $10 in points from their gas

Brandon Giella: Mmhmm

Nowell: or from the coffee shop.

so, you know, once you understand
the dynamics of your program, then

you have to measure, what am I gonna
get the strongest ROI from, right?

And that's for points
redemption for those consumers.

Because, I can offer, as an example, air
as a program, right, in travel, but if

my consumers aren't really traveling and
they don't really fit that profile, I've

just offered something for nothing, right?

And, and it, it do- there, you know,
there, there is work that has to be

done to support that program, right?

Both marketing, you know, whoever you
use, you have to build the integration

and do this stuff, but where, where is
the value add for the consumer, right?

It could be, you know, that, for your
consumer profile, that just offering

activities or tickets or, you know,
things like that makes more sense for your

consumers, and that could be quick, right?

Because, you know, if you pushed out
a, "We're only gonna do five-star

hotels," your consumer base really is
three-star hotel people, it's gonna be a

Brandon Giella: Hmm Hmm

Nowell: And so, so that's
where I think I'm landing

Brandon Giella: Hmm, okay.

So may-maybe I'll, I'll skip ahead a
bit and talk about, the data that you

might have on some of these consumers.

So I, I know, you know, in
order to create a great program,

everything needs to be personalized.

But maybe you have limited
data resources or a data team.

How do you categorizeâ¦

How do you think about how to
find out what, you know, some

of the consumers might like?

Or, or I, I don't know, how do you
even go about finding that out?

Nowell: Well, that's hard.

I mean, a lot of people can
buy, you know, third-party

Brandon Giella: Yeah

Nowell: to understand more about
a consumer, and that does help.

I mean, you can, you can
understand what kind of car they

Brandon Giella: Hmm

Nowell: and where they live and, you know,
the zip code and those types of things.

And so you can very quickly aggregate
more data around a person, you

know, and that helps you drive
recommendations for the consumer, right?

And I think it's, you know,
if you don't have access to

tools like that, you are very

Brandon Giella: Hmm

Nowell: what you can do.

And so it, it comes down to, in some
cases, just a best guess, right?

So it's like, look, we're
running the loyalty program

and it's for, Foods, right?

Well, there's a certain consumer
profile that shops at Whole Foods,

Brandon Giella: Yep

Nowell: It's just a natural thing.

Most people, you know, who
are not pinching pennies

shop at Whole Foods, right?

If, you know, if I'm shopping
at, you know, the lower-end

chain grocery stores, that's a
different kind of consumer, right?

And so just understanding my, my
loyalty program that I'm actually

running might help me align with
what value I need to be offering

to the consumer themselves, right?

And, and in those markets, right?

So the Whole Foods shopper, you
know, doing price slash through and

discounting and all those things might
not be as important than, a consumer

who is more price sensitive, right?

A-and it just depends on
where you are in that spectrum

Brandon Giella: What data you have
access to and how you kind of, you

know, think about that persona.

Nowell: Correct

Brandon Giella: to that
is, you know, IT teams.

A lot of these teams have to work
with IT, procurement, whatever that

might look like, but you gotta get
inside the roadmap, which could

be i-if not the largest obstacle
or challenge, o-one of the big

challenges that somebody would face.

How do you think about, creating a best
in class program when you've got a best in

class idea, but you need to get in front
of IT, or you need to get on the roadmap,

or you need to integrate somehow with, you
know, some of the larger infrastructure

that they might have at an organization?

Nowell: well, one, that's kind
of why Switchfly exists as a

Brandon Giella: Fair

Nowell: that, you know, we basically
bring an easy-to-bolt-on complete

end-to-end travel solution for
someone so you can do it very quickly,

without a massive IT lift, right?

I think there-- I mean, I literally
have a call in 30 minutes with someone

who they wanna build it themselves,
and it's like, I'm not sure you

guys understand the complexity

Brandon Giella: Yeah

Nowell: right?

And if you really think aboutâ¦

Let's just forget everything else.

Let's just go deep on air the requirements
and compliance for air regulation.

And, and that's where you go, are, you
know, are you gonna hire someone who

is an air expert in all of the rules
that you have to maintain display to

the consumer, to, in order to be legal?

Because if you're not, you're
gonna have a big problem, right?

And just that makes you
realize there's the Aâ¦

there's the IT investment, but
there's these other supporting roles

that also become mandatory, right?

To make sure that you're staying
in legal compliance with market

trends and things like that.

So, you know, yeah, getting an API
and, and we got a great deal is

one way to go, but there's a whole
'nother layer that comes into play.

And I actually think that the, the
compliance layer, the fraud layer,

all of those things are much more
complicated than just the IT layer

Brandon Giella: So w-what I'm hearing
the emphasis is a, a marketing team

with Claude Code is not gonna build
a great, build a great program.

Nowell: I mean, you might
have a great looking

Brandon Giella: Yeah.

Nowell: right?

But, you know, when you think about,
you know, think about card processing.

I know it doesn't matter if it's
travel or, or not, there are mandatory

requirements in credit card processing
that you have to pay attention to.

So you better budget for hiring
someone who is your merchant processing

analyst who works for you, right?

Add $100,000, right?

If it's, if it's onshore,
just for that, right?

Or two people.

In travel, unfortunately, travel is in
the same category as selling drugs online.

It's crazy hard.

Merchant processors take a very
hard look at the risk profile of

who's selling the travel, right?

And just because youâ¦

Oh yeah, it's ridiculous.

and it's understood because of
COVID and all the cancellations

and all those things.

But, you know, if you think, you know,
oh, we're gonna build this API, the

first person I would call before I
lifted a finger in building something

would be to call my merchant processor
and say, "Hey, what is-- what's gonna

happen if I add travel to my merchant

processing ability?"

Right?

And, and understand the rules that
you have to follow because you now

are placed in a high-risk category,
and that can be, eye-opening

Brandon Giella: Okay.

We're, we're drawing on your years
of experience in, in this field.

Nowell: Correct.

Brandon Giella: okay.

Yeah, no

Nowell: where the mer, you
know, the merchant, the merchant

processor will say things like,
"Okay, we're gonna hold back 35%

Brandon Giella: Yeah

Nowell: your cart until
the booking's complete."

So if you're booking things and
they're 30, 60, 90, 120 days in the

future, your merchant processor is
gonna hold 35% of that spend until

the travel is actually completed.

Brandon Giella: Wow.

Nowell: No

Brandon Giella: So

Nowell: Like, you're not

Brandon Giella: is it,

is it kind

of related to what you were saying
earlier about like, you know, working

with some of these large vendors,
you've gotta be kind of trusted before

you can move into that network, before
they really g- maybe not m- move you

out of that high risk, but, but they
start to trust you to, to move ahead

with the transactions that you're doing?

Oh gosh.

Nowell: Correct.

Brandon Giella: Yeesh.

Okay

Nowell: you, you really, I mean,
it's, you have to have people that

that's all they do, is they monitor
and pay attention to, you know, what's

happening in your credit card ecosystem.

And, and, you know, it's like if you're
selling merchandise, it's one thing.

is itsâ¦

Again, it's, its whole different animal,
and most people don't understand it,

Brandon Giella: Hmm.

Okay, I wanna dive into that for a second.

talking about, you mentioned a, a con-
like a, an air consultant earlier.

You've got vendors, regarding
merchant processors.

You've got other kind of
vendors that might be involved.

How do you think about
relationships within a best-in-class

travel incentive program?

Nowell: you have to work with them.

I mean, the, the truth is, you
know, if you're a small redemption

partner, you know, you know, do you
even have an account rep, right?

I mean, it's really hard.

These companies are big.

They're great companies, but if
you're super small, sometimes

things are really hard to get

Brandon Giella: Hmm

Nowell: right?

And, and even, you know,
we're not massive, right?

And sometimes we struggle with
getting attention that we need.

But, you know, when you're, you
know, if you're a small, a small

program, I don't think you're gonna
get the help that you really need

in order to get this stuff done

Brandon Giella: Hmm.

Okay.

one thing I wanted to, to kind of zoom
out a little bit is thinking about best in

class travel incentive program end to end.

What in your mind isâ¦

Let's say all the constraints
are off, budget is off.

What are the things that you think
are really valuable to create that

kind of best in class program?

I know everybody listening has a budget.

They've got these constraints.

But if you were to design, like, the
ideal program based on your experience,

what does that look like for you?

Nowell: I think it's, one, don't
constrain the consumer, right?

So, you know, the, the best
programs that we run have b-

both, you know, the earn aspect.

So if I, if I redeem or if I do top
up, I can get more points, right?

Which is interesting.

But it's also one of, you know,
you're not gonna be able to

identify where the consumer wants
to go or what they want to do.

Brandon Giella: Mmhmm

Nowell: have to make sure you
show up with a complete solution,

Brandon Giella: Hmm

Nowell: If you show up with, "We just
do hotels," that might work, but it

might be frustrating for consumers
because on other program sites,

they've got the full spectrum of
products available to them, right?

And so, know, you need to think
about, we offer a car rental?

Should we offer events?

Should we offer activities?

Should we offer, you know,
insurance on travel, right?

Which is super simple until you understand
that most insurance for travel doesn't

want to redeem for points, right?

And so you have to figure out how to have
an insurance carrier redeem for points.

That took a year, by the way.

For those people playing at home,
that took a year to solve for us.

Brandon Giella: I I

Nowell: Just the one
thing about insurance and

Brandon Giella: I can imagine somebody
listening to this thinking, you know,

they're, they're a travel leader,
loyalty leader, incentive, wanting to

think about their incentive programs
and thinking, "Wow, Noel's making

this sound like it's really hard.

What do I do?"

What, what in- what advice or
encouragement would you have to people

thinking about designing these programs?

'Cause what I'm hearing is, you
know, this is really complex stuff.

You've gotta be big enough, and you've
gotta have enough, you know, relationships

and trust, and you've gotta have this
kind of expertise at almost every level

and build out, like, the full suite.

I mean, that'sâ¦

Nowell: Correct.

Brandon Giella: What do I do with that?

Nowell: really hard.

I mean, that's why programs
like, you know, American Express,

you know, they have whole

Brandon Giella: Yeah.

Nowell: that, that just

Brandon Giella: Yeah

Nowell: right?

At these enterprise like scales
of, you know, the Capital Ones of

the world and the banks that you

Brandon Giella: Yeah

Nowell: the, the credit cards.

but you know, in loyalty
programs directly, that's

why people use people like

Brandon Giella: Yeah

Nowell: because, you know, we
have whatever, 160 people and we

understand travel, and most loyalty
programs don't understand travel.

And they, they think they do until about
the third meeting, and then they realize

they don't understand travel, right?

Which is, which is good for us,
you know, not good for them, and

we end up doing a lot of education

Brandon Giella: Mmhmm

Nowell: you know, why this

Brandon Giella: Mm.

What encouragement would you, would
you have other than obviously,

like, call Noel and the team at
Switchfly and, like, talk about it?

But I mean, you know, what,

what, what would youâ¦

What do you hope to leave, you
know, the audience with to say,

like, "This stuff is really hard.

It's complicated, but if you're gonna
design a best-in-class program, I would

absolutely be going down this road"?

Nowell: I think travel is,
aspirational for people, right?

And it changes how people think of the

Brandon Giella: Mmhmm

Nowell: right?

So a lot of people we talk
to are like, "Well, we have

gift cards and merchandise."

And it's like, you know, that's great,
but people don't, blogs about their

Brandon Giella: Hmm.

Nowell: right?

And so if you wanna change that
relationship with the consumer into

more of a, a emotional one, travel
can definitely do that for you, right?

And that's, you know, people
remember their last trip.

We just had a management meeting here
internally, and I re- I basically

asked people like, "Hey, everyone
tell me about your last gift card."

And no one could remember
their last gift card, right?

"Hey, tell me about your last trip."

Boom, boom, boom, boom, boom, right?

And so, you know, that's why, right?

Because people remember, "I got
this trip from this," right?

And we have customer examples of
consumers basically posting on their sites

internally, on the loyalty program sites,
saying, "I saved my points for nine months

in order to take this trip to Disneyland,
and I had the best time possible,

and it was such an emotional thing.

Thank you, loyalty program,
for letting me take this trip."

Right?

You don't necessarily get that
stuff with those other program