Some of the brightest new frequent flyer ideas we’ve seen are coming out of Loylogic, a consulting and technology company in Zurich. We managed to catch Dominic Hoffer, CEO, in between new ideas for 60 seconds of his time.
There is a feature on the new Etihad Guest frequent flyer program which I’ve referred to as a “Slider.” It seems to give value to every single mile that a member has in their account. Since this has never been seen before in any program can you describe how you came up with the idea?
Well, the idea started a few years ago looking for ways to making non-flight awards available and attractive for frequent flyer program members. The challenge is that airlines worldwide assign a higher or lower redemption value to every mile issued, which is derived from the variable cost of a free seat provided to a program member. Applying the same redemption value to non-flight rewards leads to a chocolate box worth USD$50 costing a program member the same 25,000 miles as a flight from NYC to LA — quite unattractive, even if we are talking Swiss Chocolates. Loypay (i.e., the Slider) solves this challenge. It is a revolutionary payment mechanism, generating values of up to USD$100 per mile redeemed! Members can “slide” and combine cash and miles in any combination. In the background is a complex algorithm doing the math, but frequent flyers do not see any of that and the airline stays in full control and has no added cost per mile. Hence, a clear win for members and the frequent flyer program.
Is this a technology wonder for frequent flyer programs or do you think it could define how miles are valued in the future for other programs as well?
Loypay has the potential to make any loyalty currency more valuable and members happier. The slider is easy to use and gives the member not only incredible value, but a tremendous flexibility. In addition, I assume many loyalty program managers in the world would love to communicate that their miles or points can be worth lots more than that of their competitors, not even mentioning they could be worth up to USD$100 per mile. As such, we think that the Slider has the potential to become one of the strongest loyalty program differentiators in the loyalty industry.