Top Features of a World-Class Travel Incentive Program

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.

[00:00:00] 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 Nowell 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 have... 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, Nowell, if you could define for us how, how you would [00:01:00] 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 Nowell is 

like, "Yes, sure, but maybe..." What would you say?

Nowell: you know, I think people underestimate the complexities of travel, right? [00:02:00] 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, [00:03:00] 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 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 [00:04:00] 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? [00:05:00] 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, [00:06:00] 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 categorize...

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 [00:07:00] 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 [00:08:00] 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: [00:09:00] 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 about... 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 A... there's the IT investment, but there's these other [00:10:00] 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 [00:11:00] $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 you... 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 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

Brandon Giella: Huh.

Nowell: 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 [00:12:00] 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, [00:13:00] 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 its... 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: yeah. I mean, 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, [00:14:00] 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. 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 is... 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 [00:15:00] 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.

So

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 [00:16:00] 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's...

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 [00:17:00] 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 Nowell and the team at Switchfly and, like, talk about it? But I mean, you know, what, 

what, what would you... 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 [00:18:00] 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." 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 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. [00:19:00] Thank you, loyalty program, for me take this trip." Right? You don't necessarily get that stuff with those other program

Brandon Giella: Yeah, that's a whole, you know, the brand experience and, and the brand equity that you build over time with cus-customers. So maybe the question is, and maybe I'm not phrasing this right, but it's kind of if you think going up the, the source of the idea, the leadership chain, the, the aspirations of the business, like it, it's kind of a...

You're kind of putting it in a different category of thinking about aspiration or thinking about loyalty in a, in a, in a different way, not so much the mechanics of the program really, but it's more like who do we want to be as a brand and how do we want our customers to think about us? Is that, is that a fair as-assumption?

Like, this is gonna take an investment. This is complex. This is hard work.

Nowell: Correct.

Brandon Giella: you can't just kinda... This isn't a crapshoot. You've gotta, you gotta think long and hard about this and who you want to be as a [00:20:00] brand. Is that fair to say?

Nowell: For sure. Yeah, for sure. And it's like, you know, what values do you wanna bring, to your

Brandon Giella: Yeah

Nowell: right? And, you know, do you want... You know, we have program partners that the hotels, as an example, are only four and five-star

Brandon Giella: Hmm 

Nowell: They don't even

Brandon Giella: Really?

Nowell: We typically don't offer one and two stars, but they're like, "We don't even wanna do three-star hotels," because they understand the profile of their

Brandon Giella: Hmm 

Nowell: right?

And those consumers are more focused on redeeming and lots of points for really, usually it's five-star hotels, right, in order to redeem. And so, you know, it becomes association with

Brandon Giella: Hmm.

Nowell: that you're bringing to the table for them, right? And, and mapping that too. And I think the other thing that is always important, especially when evaluating travel, is it's not necessarily, we've talked about this before, you know, there's the, there's the initial shopping, right? And let's say, you know, [00:21:00] you are focused on those four and five-star consumers, right? They're really focused on that. you don't want to end up is end up in a program that when something goes bump in the night and they pick up the phone and they try to call, that the answer is, "Please call back in forty-eight hours."

Brandon Giella: Yep, I've had that

Nowell: Because that is a brand

Brandon Giella: Yes

Nowell: right? And, and brands for loyalty in particular, they have to pay attention to the servicing side. They have to do it. And I, I think that most people miss that, and it's kinda like an afterthought. And you have to really understand that if you're selling to people who, you know, are driving Mercedes and BMWs and things like that, you know, when they go to the service center, they're taken care of. When they're taking a five-star vacation to, you know, wherever, you know, Turks and Caicos, and they're there and something goes wrong, they don't wanna wait for forty-eight hours to get a phone call [00:22:00] back. Like, they want something immediate, right? And so, you know, ensuring your travel program is set up to offer that is also critically important.

Brandon Giella: Maybe that's the takeaway with this is when you're thinking about a best-in-class travel incentive program, you're thinking about travel specifically, it has this other emotional value to consumers that other programs may not have, and it's important to pay attention to that. But it's hard to do. So you gotta think way upstream and think bigger about what you're doing as a brand and your, your loyalty and your experience overall, and then make sure that that support is there because these people care a lot while they're on on their trip, you know.

If I could tie it all together, yeah

Nowell: For sure. And make sure that, you know, whoever you're aligned with vendor-wise has that same

Brandon Giella: Hmm 

Nowell: you. If you don't have that, it's gonna be

Brandon Giella: Mm 

Nowell: right?

Brandon Giella: Mm. Okay. Okay. Very helpful. Anything else that, you want to leave, customers with, leaders with, people [00:23:00] listening on this show, maybe attending the IMA in a couple of weeks when you're on the panel? A- anything that comes to mind?

Nowell: we'll be there. Yeah, we'll be at the show and, you know, it'll be fun to meet people and, and see, you know, it's interesting time in travel and, you know, people-- At the beginning of the year, people were worried about, you know, are people traveling? Are people doing this? I can tell you, having been to the airport yesterday morning, travel is

Brandon Giella: Yes.

Nowell: It's absolutely crazy,

Brandon Giella: I just went to South Africa a couple of weeks ago, and everywhere I went, like four different airports, it was just packed, packed to the gills. Yeah, it's nuts. Yeah

Nowell: Correct. It's not, it's not, I don't think any of our loyalty customers are down

Brandon Giella: Really?

Nowell: They're all,

Brandon Giella: Wow, yeah.

Nowell: w- with points redemption and

Brandon Giella: amazing. Okay, so it's the golden age of travel still, despite oil prices.

Nowell: It is. Despite oil prices. Well, the thing about oil prices which is so interesting is that consumers, because the price of air tickets and things have [00:24:00] gone up, more inclined to use more of their points

Brandon Giella: That is so true. Actually, that's true for me. I'm planning a trip, just kind of spontaneous, and I'm like, "Maybe I should open up a new credit card." I mean, that's-- And I haven't thought that in years, you know, but yeah, it's, for, that's for sure on my mind. Yeah, yeah.

Nowell: Yep, for sure. Here's 90,000 free miles so that you can go to your... Okay, but,

Brandon Giella: Yeah.

Nowell: when the plane ticket is $900 to go round trip, you're like, "Man, I'll, I'll take the 90,000

Brandon Giella: literally almost exactly that to go to Rome, and my three-year-old, I have to pay for her now, unfortunately. She's no longer free. So yeah, I'm, I might open up a credit card.

Nowell: There it

Brandon Giella: Nowell, thank you so much. for those of you listening and want more resources like this, it's switchfly.com. The team has put together a lot more episodes, a lot more guides and blogs and resources to help your travel incentive program.

But as always, you can catch Nowell out and about, and he's gonna be at IMN in a couple of weeks on July 21st with a panel, and we'll have more content to follow after that. Nowell, [00:25:00] always a pleasure to talk with you, and hope you have a great day

Nowell: Great. Thanks, Brandon!