#426: Virgin's Velocity - the loyalty program from Virgin Australia - Rewarding Customer Loyalty Super Fast!

Today’s episode features Velocity, the loyalty program from Virgin Australia.

As one of the world’s most famous challenger brands, Virgin enjoys a global portfolio of inspiring businesses that are dedicated to delighting customers around the world, and Virgin Australia’s Velocity programme does exactly that!

Our guest is Nick Rohrlach, CEO of Velocity, who shares with us the dramatic transformation of both the airline and its loyalty business in recent years.

Customer loyalty is at the heart of their propositions, with a laser focus on proving to Australian customers that they will be rewarded for their loyalty super fast.

Nick shares their latest campaigns, which are earning Velocity a reputation for bringing back some fun, even at a time of intense economic pressure for consumers.

These campaigns are proving to be incredibly powerful tools that drive impressive levels of engagement for the programme, as well as earning welcome publicity for the airline itself – truly remarkable in such a mature and competitive market.

Listen to enjoy my conversation with Nick Rohrlach, CEO of Velocity from Virgin Australia.

This episode is sponsored by ValueDynamx ( Part of Collinson Group)

Show Notes:

1) Nick Rohrlach⁠

2) Velocity Frequent Flyer

3) Virgin Australia⁠

Audio Transcript

Paula: Welcome to Let’s Talk Loyalty, an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas, and if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

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Hello and welcome to today’s episode with Velocity, the loyalty program from Virgin Australia. We all know Virgin as one of the world’s most famous challenger brands with a global portfolio of inspiring businesses that are dedicated to delighting customers around the world. 

My guest is Nick Rohrlach, CEO of Velocity, who shares with us the dramatic transformation of the airline and its loyalty business in recent years. As you’ll hear throughout the conversation, customer loyalty is at the heart of both the airline and its loyalty proposition, with a laser focus on proving to Australian customers that they will be rewarded for their loyalty and super fast. 

Nick shares their latest campaigns, which in true Virgin style are earning the Velocity program, a reputation for bringing back some fun, even at a time of intense economic pressure for consumers. Their campaigns are proving to be an incredibly powerful tool to drive intense levels of engagement for the program. As well as earning publicity for the airline itself, truly remarkable in such a mature and competitive market. 

I hope you enjoy my conversation with Nick Rohrlach, CEO of Velocity from Virgin Australia. So Nick, welcome to Let’s Talk Loyalty. 

Nick: Hi Paula. Thanks so much for having me. 

Paula: I know you’re a listener of the show, Nick, so I’m super excited and particularly because I’ve never had anyone from an Australian airline on the show. So this is gonna be absolutely incredible to hear all about Virgin Australia and Velocity.

So, as you know, we always start this show, literally kind of talking about what is your favorite loyalty program, because as industry professionals I think we really do need to get a sense of what you admire in the industry. So let’s kick us off. What is your favorite loyalty program, Nick? 

Nick: Sure. If you don’t mind, I want to answer a little bit differently. Cause to be honest, some of your past guests have taken my answers already, but I draw a lot of inspiration from the likes of, you know, YouTube or Instagram. They have a lot of great algorithms, and honestly, every time you log onto the YouTube app, it knows more about you than you know about yourself.

I find always recommending videos that you haven’t seen or videos like, like you ones you’ve seen before. And as loyalty people, at the end of the day, if we can help customize our experience of our members, the experience of our guests onboard our flights, if we can do that in the same way where, you know, the more they spend time with us, the more we know about them and the more we can therefore be customized and, and personalized that’s a pretty high, that’s a pretty high bar. So I think that’s the trend if you ask me. 

Paula: Amazing. Yeah, I think in the beginning when YouTube started, you know, it was just one of those things that we just didn’t realize was gonna become so gigantic. But you’re absolutely right. It’s the personalization that makes it incredibly relevant. And actually something we’ll be doing a lot more in the future with as well, Nick. So, sounds like you enjoy, I think, podcasts both in video and in audio. If I’m right.

Nick: Yes. I have to admit, even a lot of the podcasts now go into video format, so it’s, it’s become a better way to watch it I think.

Paula: It sure is. Exactly. And I think the per point about personalization is one that we make very often on the show, but honestly, it’s so poorly executed in most of my experience. Like I just bought some stuff on an e-commerce store out of the UK, for example. you know, a address for me as an adult woman. And my next email was about children’s wear, which I’ve never looked at, I’ve never been interested in. So I do think personalization has a long way to go. So, definitely one, as you said, that Instagram, YouTube are absolutely doing an amazing job. 

So with all of that said, thank you, first of all for coming up with something that’s different. Of course, we do get some, some loyalty programs that come up regularly on the show, so always nice to think about it from a different mindset. 

So listen, you are in an amazing role, you know, sharing incredible story Nick of Virgin Australia, and specifically Velocity. And of course we do have a global audience of people who mightn’t be familiar with, you know, I suppose the Australian airline itself and your own program. So just to kick us off, why don’t you introduce the airline. I love it because it’s so irreverent. And, tell us a bit about your whole business. 

Nick: Thank you. Well, look I hope the Virgin brand probably doesn’t need too much introduction, and I know a while back, a couple of years ago, you had some from Virgin Red on, but, but of course the Virgin brand itself is where this all starts.

So, 20 odd years ago, you know, Richard Branson, along with some Australians, Brett Godfrey and the like, launched Virgin Australia and it was hugely fast growing business under the Virgin Blue brand originally. And, did you know, a huge job coming into the market, taking a big significant stake.

And then over the last 10 years, there was a sort of a different strategy really to compete as a full service airline, and to take, you know, market share around there. And, they did a great job of boosting the program. And, part of that of course, was to then launch a loyalty program, which was Velocity, or Velocity Rewards originally, and then ultimately Velocity Frequent Flyer.

But that positioning, you know, the airline, did a lot of great things, but it was perhaps a better airline than it was a business. And then Virgin Australia, really struggled for a while in terms of profitability. And then, to be honest, was in a bit of trouble anyway, but then particularly when Covid hit, did not have the financial strength to get through and went into administration.

And so, you know, this great brand, this great affinity to this great brand was there, but, obviously the business ran outta cash and it went into administration, which, which is the Australian version of bankruptcy. 

Paula: Wow. Wow. I didn’t realize that had happened, Nick. I’m sure incredibly, distressing. Of course, we’re all concerned given that it’s been through such a tough time. I think Covid of course, just decimated so many businesses. How did you get to where you are today? 

Nick: Yeah, well it was a great story and you know, you could say it’s a bit of a phoenix rising from the ashes story. And I might go into that if you, if you don’t mind. But obviously we got some, you know, that I talked about that great brand and that great market positioning. And it attracted a lot of interest. There was actually a, you know, a series of different firms that looked into buying, the business out of administration, out of bankruptcy.

We were lucky that Bain Capital, which of course is a private equity fund out of the US, they have a big Australian presence as well. They, ultimately decided to buy this business. Bain Capital’s interesting also too, because they have not only a series of different consumer investments around the world, but they’ve also been, they’re involved in Virgin Voyages as well. So they’re not strangers to the Virgin brand. 

Paula: Beautiful. 

Nick:  And so, of course, they could really look in and see the true strengths of this business. There was a lot of things that needed to be fixed and reset.  But they could see that strong market position, that strong brand of course.

As the sort of the core to go around and our chairman talks about the story too. You know, there’s all those assets, but also one of the things that really attracted them to was, of course, the loyalty asset, you know, here at Velocity too. So I know that was really fundamental to their investment case.

Paula: Amazing. And I always think, of course, the whole world of private equity, Nick. I mean, I’ve never been involved in anything like you’ve just, explained for us. But, you know, for people like Bain Capital to really value the loyalty proposition, clearly Velocity had extraordinary, value in itself as a program.

And I know you’ve crossed some amazing milestones in the past couple of months and years in fact. So really excited to get into it. And a phoenix from the ashes, I think is something that we are all truly inspired by because a brand like Virgin does deserve to be successful. But to use, yeah, to use your words, I think brand strength. You know, there can be love and loyalty, but financial strength, of course the two have to go hand in hand. 

And I always actually feel that actually loyalty marketing is something that inherently has that commercial aptitude or attitude. Like I think we fundamentally connect the two. So I’ve often said on this show, actually, you might have heard me saying it, but you know, all of the beautiful brand advertising that so many marketers you know, spend their careers doing. I just don’t understand how they make those kind of marketing decisions. 

But when it comes to investing in loyalty, it’s just super fun. And as you said, a brand like Virgin, you know, being on the show before, but, amazing to hear the Australian story. So let’s get into all the good news.

First and foremost, the whole piece around the Velocity brand name is what I hadn’t thought through. But the simplicity of what you’re saying to Australian consumers is absolutely breathtaking, Nick. I think one of the issues that we face as loyalty professionals, is that our consumers sometimes feel like, will I ever get to enjoy the benefits of being a member of a loyalty program?

And I think you’re taking this to a whole other level. So tell us about Velocity as a brand name and what you, what you aspire to. 

Nick: Yeah, sure. We over the last few years then sort of the phoenix as the phoenix rose from the ashes, I guess. And as we rebirthed Virgin, we really stepped, stood, stood step back and say, what’s the core, sort of customers that we wanna build the airline back around.

And really, Virgin Australia’s core customers are small business customers. Their price conscious corporate customers, those who travel a lot for work, but but also need to keep an eye on the bottom line that the price of the ticket or premium leisure customers too. We are not an ultra low cost carrier. We have a service that is above that. And represents really good value because it’s a good service at a good price. 

And so with that, as the airline’s core customers, we said to ourselves, you know, and we really rebranded and relaunched the airline around that. And then the same thing for Velocity too, is how does it work in. The great thing is for us is that there’s a huge overlap there because if you look at what unites those three core, core heartland segments as we call them  Is what really matters to them is what we’ve called value and recognition or value and rewards.  So they want to have a great value experience. They want to, you know, pay a good price for that ticket, but also get a good level of service on board the aircraft.

But then also be recognized for that travel. They might be spending their own money as a small business traveler. But they also want to, be recognized and rewarded for that. And so that is ultimately the core of Velocity’s mission is to reward and recognize that travel and also reward and recognize for our other partners the non-air airline partners. And so that’s the core of our program.  

But then as we re relaunched the business, you know, as you said, how did we sort of relaunch the brand as well too? The other thing we said is, what does, where does Velocity sit? And here in Australia we are lucky, there are a number of very successful loyalty programs. Obviously two very strong airline programs, two very strong supermarket based programs. And then quite a few. So it’s quite a competitive loyalty market. But if we look across those core people who, who really love Velocity, who really love Virgin Australia, but then also engage with our other partners, a lot of the things that really appeal to them is and really matter to them is like, for example, speed to rewards.

You know, you a lot of people, you know, earn points in different ways, but you don’t wanna have to earn for, for, you know, save up for 10 years and stuff. People wanna see value quite quickly. As I said, value and recognition, they, they go hand in hand for our customer base. And so,you know, working with our brand agencies and stuff, at one point they, they came, turned to us and said, well, it’s in your name, Velocity.

Velocity means fast. It’s our new campaign. And it really spoke to that, you know, quite a timeless thing, but, but really it’s that core segments there of, you know, it’s about being rewarded for loyalty, but also seeing those rewards come, you know, fast and seeing the value come fast as well. And that’s the core of our campaign.

Now we do know that Velocity actually doesn’t mean fast. If you look it up in the dictionary, it means that change of speed and direction of momentum. But you know, Velocity means fast is the core of our, of our new campaign and positioning. 

Paula: And it is genius. And again, that’s where the marketing people absolutely. Hats off to them. Absolutely brilliant. Yeah, totally. And for me, of course, that whole insight, I think, and we talked about it last time, Nick, when we, when we had a conversation, you know, there is this unbelievable proof point that as loyalty professionals, we actually really need to keep the focus on because at the end of the day, of course, the earning is where we get all of the value and we see the behavior change, but the burning is where the member actually feels that brand love.

And, you know, making sure that we do close the loop to then of course drive them onwards to further earn, you know, more and more different, you know, points levels in lots of different ways. It sounds like you absolutely have a core belief on the power of burn to drive earn. Would that be fair to say?

Nick: Yeah, absolutely. And look, we study that as part of our sort of strategy work. And we can see that a member who earns, obviously that’s profitable to us. That’s how we do things. But someone who then redeems and then goes on to earn more is worth even more. And that’s the core of, you know, it’s great for the member to realize that value, but it’s also more, more, you know, even more successful for us as well too. So we want to get people to their next reward as quickly as possible. So that they then go, Hey, that’s great. Can I get onto my next reward? Can I get, you know? Get onto that, that flywheel that we talk so often about in loyalty. 

Paula: Absolutely. And again, I’m gonna make sure in the show notes, Nick that we link to the current brand campaign that you just told us about in terms of Velocity means fast. There’s a couple of things. Again, just really appeal, you know, so such a beautiful piece of creative, the fact that there’s a businessman literally on a lilo in a swimming pool, of course still with this briefcase. And then the woman on the sunbed, of course with the, the fuel pump, you know, from a recent partner in terms of 7-Eleven. So definitely, again, very creative, very compelling, and, and copywriting as well as something.

You know, I often think the words drive loyalty in a way that, again, perhaps is loyalty professionals. We don’t always give it sufficient attention, but I saw it on your website, Points to Paradise Fast.

I mean, It’s just so clear. And again, then the, the TV campaign comes through. So, I know you guys are crystal clear and this whole, I suppose, 24 month transformation feels like it’s gaining even more and more momentum with just an extraordinary number of initiatives. So you guys have been incredibly busy, recent months and years.

Nick: Yeah, we haven’t. And look, it’s been really exciting. We during Covid, of course, there was a bit of a pause on this, but we’ve seen coming out of that and as people get back to travel and people get back to you know, airline loyalty programs, we’ve seen this huge rush of new active members. A total membership base just hit a new, new high at 11.5 million, which is pretty high percentage of the Australian population. 

Paula: Amazing. Great. 

Nick: And, it’s just, it’s great to see that. Again, working closely with the brand agencies, as you say, with our own business, you can, we can really, you know, excite people around that vision.

Paula: Incredible. So you’ve had a couple of really big campaigns, Nick, and I think you broke the internet in Australia, certainly with the most recent one. So, you know, almost a victim of your own success. So tell us about some of the, I suppose, very innovative campaigns, because I think that’s what’s always super fun. We have so much creative license to do things as loyalty professionals. So what did you guys launch in the last couple of months? 

Nick: Yeah, and, and I mean, you, you touched it before, but of course the other great thing is the Virgin brand itself is an extra license to just have a bit of fun and things we’ve done.

The 1 Point Rewards is on part of that Velocity means fast campaign for us. So, so a couple of weeks ago we launched that with a popup store in one of Melbourne’s famous shopping streets. And you know, when you, when you come up with these things, it sounds really awesome, and then you’re like, oh, geez, will anyone, will anyone turn up?

So we had this popup store of a physical reward store, right. I mean, we’re such a it was such a digital experience. Sometimes it’s, you know, sometimes it’s, it’s easy to, to forget. But actually we just brought it back and actually set up a store with the rewards in there. And, and also in our business, you know, everyone has a million, a billion point giveaway, so we said, what if we just made it a one point?

Just ’cause the value of any amount of points can be worth something. And so this 1 Point Reward store and, and we literally had a queue down, down, Chapel Street, this, the shopping street in Melbourne. And, we had a, we had people camping out the night before. Wow. just to line up.

And, just a great way to just remind people, you know, especially the, I mean, there’s cost of living issues in a lot of parts of the world, including here in Australia. Suddenly this, this message of value and this message of a message of rewards just landed and we, we had, we had the, we had five, six blocks we had to call in extra security, just because there was, we, we also wanna, you know, we’re an airline, we wanna make sure things are very safe. So we, we didn’t wanna have any problems with cars driving across this queue. We actually had to space it out and have security help us.

But, it was, ’cause, you know, people just excited about this and, hugely, hugely awesome campaign. We were gonna follow that with an online drop, as well. We had tested for that. And the demand was much, much higher than we even we had tested for. So Taylor Swift broke a ticketing website recently, and we, and our members broke our, our website as well too. Not that we’re quite as big as her. But, it was, it was great to, great to see the level of demand, but unfortunately we didn’t quite, didn’t serve it. So, we, we’ll go again in a few weeks time. We’re upgrading, upgrading a couple of things on our website. 

Paula: I can imagine. 

Nick: But again, it’s just, it’s just testament, it’s just testament to just the level of interest in particularly, you know, airline rewards and just, you know this, this new potential around velocity, meaning fast. 

Paula: And what was your top objective of that, Nick? I can see so many rationale, for such a beautiful campaign. So, you know, driving, I suppose new member acquisition would be one. Building, I suppose, excitement about getting back, traveling again, you know, post pandemic, you know, building the trust in the fact that obviously, you know, closing the loop as we’ve already talked about. What, what would you say was the, the kind of core driver, what were you really hoping to achieve with that campaign?

Because you obviously invested hugely. And if I’m right in understanding the, the rewards available where domestic flights, international flights and obviously physical goods. So actually you guys put a huge amount of budget behind this. 

Nick: Yeah, we did. But, ultimately it was the most important thing was just to help people realize that actually you can make a, you can get a reward very easily and very quickly.

Right. This, this is a category, this is a, this is a, or this is a sort of a loyalty programs. Like sometimes in the past people always said, oh, I’ve gotta save up. It’s just not worth the effort. It’s like, well actually there’s value right now and, and look. That’s a particularly important message at the moment too, is everyone sort of battles with cost of living and the like as well too.

Like yeah, people want value. It’s, it’s, this is attainable value. This is not impossible value. So, so get involved, earn, it’s actually not, it’s not hard to earn. We have lots of different ways of course we have the airline, but we’re, we’re a broad coalition. We have our fuel partner, we have, we have a supermarkets partner, we have lots of banking partners.Lots of other ways to, to earn points. So reminding people and that actually you can get a reward very quickly and, and get onto that flywheel, of course. So that was the thing we wanted to send the clear message around. And you know, as I said, it was, it was, it was almost, too, too strong a reaction.

Paula: High quality problems. Absolutely. 

Nick: High quality problem. 

Paula: Yeah, Brilliant. No, and again, totally aligned with your brand campaigns, so I can see exactly everything you’ve said, whether it’s the airline itself, the brand of the airline, the brand of the loyalty program, and the proof points of the loyalty program.

I think what I’m kind of hearing is you know, a masterclass in loyalty. If you can be super clear in terms of what your value proposition is, people will literally, as you said, camp out overnight. They will ultimately change their behavior, and that is a long-term play because those people who camped out overnight, you know, whether they got the rewards immediately or hope to get it in the next round. Of course, now they’re super excited and the advocacy must be totally off the charts for you guys now. 

Nick: Absolutely. And we saw, like, for example, a number of people on our social media channels has uplifted. We’ve seen, you know, a number of people sign up to the program, but also existing members just re-engaging with the program over the last couple of months. So yeah, it, you know, it’s, that’s, that’s the benefit of just reawakening and refreshing that message. 

Paula: Amazing. Amazing. And tell us about the other one then, Nick. I know before that you had a campaign around what has been traditionally maybe a much less popular seat on the aircraft, just to kind of connect you guys back. So tell us about your Middle Seat campaign. 

Nick: Sure. Look, obviously this is particularly out of Australia, sorry, Virgin Australia. Our airline, our airline are part of the business, but it’s also got a key loyalty part of it as well. So Virgin Australia as part of its, you know, re rebirth and rebrand, repositioning as well.

You know, as I mentioned, really stands for good value. But also as part of that good travel experience, you shouldn’t have to choose between a great price ticket and a great travel experience. And of course that’s, that’s the Virgin Promise along, along so many industries and, and, and what we stand for here too.

And so as part of that, we wanted to demonstrate obviously that what we stand for is good travel experiences. In fact, the whole Virgin Australia campaign’s, actually one, it’s called wonderful. It’s to say it’s actually, it’s a wonderful travel experience and we aspire to that. But as part of that, you know, again, we worked through with our brand agency and one of the things that was always confronting is the Middle Seat.

And as you say, not traditionally the most popular seat, but, you know, why should, why should the wonderful travel experiences just be so, you know, for those who are on the aisle or the window? And of course we have, we have a Middle Seat on aircraft like most airlines do too. And so one thing we decided to do was to have what’s called a Middle Seat lottery.

And if you’re sitting in the Middle Seat on one of our aircraft, you can then enter for free  through our app.  And, and the key part is you do need to be a Velocity member, which, which of course is the loyalty connection. I’ll mention more later on, but to basically, while sitting in a seat, the crew will make an onboard announcement, allow people to log on and enter straight away.

And we had some amazing prizes as part of this, and it was great working not only with our own business, but also with our partners. So for example, Virgin Voyagers or Qatar Airways, helped us out with this United Airways, all our great international partners as well. We all worked together on this. And every week, someone won a prize. You know, our first, our first weeks winners were actually, I believe goat farmers from Outback. 

Paula: Oh my goodness. 

Nick: They were on their honeymoon. She entered the Middle Seat lottery, they won and they’d never been overseas. And suddenly they, they won a Virgin Voyagers cruise to the Caribbean. 

Paula: Oh my goodness. 

Nick: Which was just awesome. But also just reiterating that message that actually even the Middle Seat can be wonderful. And so it was a phenomenally successful for the airline and we’ve kept it going. Cause it’s just really, you know, awakened the imagination of so many. But also, as I said, It was great to be able to use that as an opportunity, to also reinforce the loyalty message, like be a member of Velocity. So we saw an increase in the loyalty program, signups. 

And it’s just a great reminder to, you know, for anyone out there when you, you know, when you’re the loyalty part of the business, working with the rest of the business, just, you know, there’s so many opportunities to work together to reinforce your messages and, and grow, grow both aspects. The core business and the loyalty at the same time. 

Paula: Totally. I wish every airline would have a Middle Seat lottery, Nick, because Totally. And I love the statistics. I saw your press release on it. From your Velocity members, it shared that 62% of people who do select a seat do choose the aisle. 35% choose the window, and then the, the balance of 3% say any. So there definitely is a perception problem around that Middle Seat, which I think you’ve successfully gamified. And I am a huge fan by the way of Virgin Voyages. I haven’t yet been on board, but my husband has been duly warned that as soon as we can possibly, organize ourselves, it’s just such an incredible proposition.

And randomly, I know it’s not connected with loyalty, but just the fact that they have a whole adult, you know, only proposition for that cruising experience as well really shows how I suppose virgin through everything it does really understands what people are concerned about and aspire to. So again, I’m, I’m hearing that coming through. So sounds like this gamified piece is going to continue for you guys as part of the airline. 

Nick: Look at, again, this comes back to that core mission of trying to make every, every part of our experience wonderful. We have, they have this amazing onboard experience, these wonderful crew that, that we have onboard our aircraft.

You know, we have a wonderful loyalty program. It’s just reminding everyone too about just these elements of our experience and, and we’ll keep investing in them, In, in these ways and, and hopefully in new ways to come. 

Paula: I’m sure you will. Yes. And I did see that your cabin crew won, won a big award recently, in terms of the Best Cabin Crew. So I can hear that that’s a core part of your proposition. As you said, you are a full service airline. So absolutely the onboard experience sounds absolutely incredible. 

And the other piece that you’ve reminded me as well, Nick, is. I think as an industry for airline loyalty professionals, there has been a lot of, thinking and I suppose sometimes even, you know, quite dramatic change in terms of where the loyalty program sits for the airline.

And a lot of debate around, you know, should it sit internally, should it sit externally? And I guess there’s pros and cons for each. So given how closely aligned, you know you are and, and obviously working so closely for Virgin Australia to drive their kind of agenda. Tell us your thoughts on the role of Velocity for the airline.

Nick: We’re a really interesting story around that because we’ve done all, all of the different parts of that spectrum. We started off as a part, you know, the Velocity Rewards was a small part of the airline for a while. And then actually, you know, sort of 10 years ago it was quite popular to spin off the loyalty programs and we actually sold a stake in Velocity.

Private equity came in and so it was partially, only partially owned by the airline. And they did an amazing job at growing the coalition. So we, we, we hugely increased our number of members. Hugely increased the number of partners. But as a result, we perhaps we’re a little bit less focused on, on the airline connection there as well.

And so hopefully now I describe it as the Goldilocks thing. Hopefully, you know, you can go too far one way or too far the other, hopefully we’re getting closer to just right now. And, and you know, as you said, we really believe, like obviously the attraction of a, of an airline redemption reward is the whole reason people still engage with an airline loyalty program as well.

So we don’t wanna lose too much focus on that even though we are trying to grow the non-air airline side of things as well. But really trying to Goldilocks our way through and making sure it’s, it’s both aspects of that. Because as I said too the core of the airline’s mission, those customers are looking for value and recognition or value and rewards.

It’s, they need us as part of the airline value proposition just as much as we need them. So together working, it’s so important. That’s why philosophies in every, in every conversation in the marketing team, in on the airline side and vice versa. Because it really is, it should work really well together.

Paula: And certainly what I’m hearing, Nick, from more and more airlines as we talk on this show, is actually there are simply not enough seats on, you know, available on the aircraft for all of the demand, on the redemption side. So whereas, you know initially, it isn’t necessarily people sign up with a view to redeeming for non-air airline benefits.

Actually, I think as soon as people start doing that, it becomes incredibly compelling. So it sounds like you do have some great propositions. I know our friends in Collinson work with you guys as well. So tell us a bit about your non-air airline side. You do have lots of options on that side. 

Nick: Yeah, we do, of course. And we work, we have a reward store, where you can redeem your points for anything from gift cards through to Apple products and the like as well. We also announced late last year one of Australia’s biggest department stores. Myer is now one of our redemption partners, and we really saw amazing, interesting for us was that was quite a different person in science.

So some of our members like to get gift cards. Others have gone for, for the my redemptions. And so it just showed that there was an, an extra segment we found of people who wanted to use their points in that way. And so what we found is that every one of these non-air partnerships, non-air redemption options, has added a new element to the program. and so it compliments, compliments, it makes, it, makes it even more exciting. And so we’ll keep books, we’ll certainly keep looking to do even more. Of course we’ll always be famous for the airline redemptions, but, but particularly we want to give people choice that, that being part of the Virgin Australia brand promise and, and certainly what we wanna do in the Velocity side as well too.

So we can give people, if they wanna save up their points for the, for the dream trip to New York, we have an option for that. If they want to get, you know, a few, few dollars off their, Christmas presents and Christmas present shopping, we can do that too. It’s just nice having that choice.

Paula: Wonderful. Wonderful. And then just, you touched on the numbers and congratulations of the 11 and a half million. That’s an incredible milestone in terms of members of Velocity. Give us a sense of the scale of the ecosystem, Nick, because I saw seven 11 joining. We’ve had them on the show, certainly from a US perspective. 

And I loved, again, the clarity of the partnership that I saw again on your homepage where the very first earning opportunity is a seven x multiple. Obviously leveraging the 7-Eleven piece in the second one as an 11 X multiple. So genius again coming through in that. So, so tell us a bit about the, the other partners in your ecosystem. It sounds like it is a core focus for you to continue to grow that. 

Nick: Absolutely. So, so we’ve, we’ve got obviously a wide range of, of partners across our coalition. I mentioned of course, some fantastic airline partners. You know, three of our, three of our airline partnerships. The top three airlines on SKYTRAX as awards too.

So we’ve got, you know, amazing partners in the likes of Singapore Airlines, Qatar, and United, and of course Virgin Atlantic. 

And then on the, on the non airline side, we have a lot of banking partners, of course, with, with our own credit cards, Velocity, earn points, earning credit cards. We also work with other financial services companies here in Australia to, you know, give their loyalty programs options to transfer points in. And then our other big one here, the, the Flybuys program is, Australia’s other top four loyalty programs alongside us. We have a great partnership with them where their members can transfer their five base points into Velocity as well. And that gives us access to not only one, one of Australia’s top supermarkets in Kohls. But also a series of Australia’s most, most famous shopping, for example, Bunnings, which is our hardware store by far Australia’s largest hardware option. And so you can, you can earn points at hardware shopping as well.

And then of course, as you mentioned, 7-Eleven is our fuel and convenience store partner. And, and of course they’ve got a, they, they’ve got a great series of petrol stations and convenience stores across Australia. So there’s a wide range of partners and I only talk about that. We have over 80 partners, so there’s a, we we love all of our other partners as well too. There’s a lot of others in, in other retail areas or in other financial services products as well. And that of course, just as I said, just gives the customer and gives our, gives our members so much choice. 

Paula: It’s, it’s great. Incredible. Incredible. Well, I can hear no shortage of ambition and aspiration, Nick, coming through in everything that you guys are doing in Velocity. I think we’ve covered off all the main ones that you’ve done in the last couple of months, in the last year or so. So what can you tell us about what’s coming up in the future? 

Nick: Yeah, well, hopefully more of the same. Obviously we, we’ve announced a couple of other partnerships that are coming, coming soon.  So we’re looking forward to bringing on luxury escapes, and ANA. ANA’s, leading airline in Japan as well.

So there’ll, there be some new partners coming in. And look, we’re looking to obviously across a number of different other areas where we don’t have an option yet. We’d love to keep adding to that. For example, some of the industries we don’t currently have membership options. 

But as I mentioned too, we know that we wanna bring a lot more value to our existing members as well. So we know that, for example, there’s additional products we can do with our banking partners. There’s additional products and additional options we can give within some of our existing partnerships too.

And then of course lastly too is even with the airline, you know, an airline loyalty, there’s topics like, for example, tiering, you know, different status levels and that sort of stuff. And, you know, we’ve certainly been studying that very hard and how working out now that we are a, we’re a new airline and a new new loyalty program. What, what does that mean for our tier, you know, options and stuff?

So we, you know, can’t talk too much specifics about that, but we’re, we’re very advanced in a review of that and, and look forward to finding ways to, to recognize those members even more, ’cause as I said, yeah, it’s a core, core, core segments, really, really value those, that recognition aspects as well.

Paula: A hundred percent. Nick, Yeah, I wish more airlines would think about other ways for me to keep my status because, you know, I can’t just lie for the sake of keeping the status. So the fact that you’re thinking about that means it’s very exciting and I’ll be dying to hear how things evolve, in the months set to come. So I think that’s all the questions I have for you today, Nick. Is there anything else that you wanted to mention before we wrap up?

Nick: No. Well, well great. Great to talk to you and, look, look forward to updating you on some of those things in the future. 

Paula: Amazing. We’ll definitely stay close in contact because, as I said, Velocity is super inspiring and everything the Virgin does around the world, really appeals to me on every level.

So thank you for joining us today. So Nick Rohrlach, CEO of Velocity. Thank you so much from Let’s Talk Loyalty. 

Nick: Thanks, Paula.

Paula: This show is sponsored by the Wise Marketer, the world’s most popular source of loyalty, marketing, news, insights, and research. The Wise Marketer also offers loyalty, marketing training through its Loyalty Academy, which is already certified, over 500 executives in 38 countries as certified loyalty marketing professionals.

For more information, check out thewisemarketer.com and loyalty academy.org.

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