How to Get Started With a Coalition Loyalty Program
For many people, their wallets and key chains are filled with loyalty cards and their phones stocked with loyalty apps. In fact, Americans are enrolled in about 18 different loyalty programs and participate in an average of eight.
One rewards system may have the ability to change this. Coalition loyalty allows brands to work together so members have variety when it comes to earning and redeeming rewards.
Danielle Brown, the VP of marketing at Points, a commerce platform for loyalty programs, says coalition systems don’t exactly translate into a points system. They create loyalty.
“It’s value — it gives them more ways of earning in their own currency or a currency they know and love. It helps to create exposure and it builds trust,” says Brown.
Plenti Points, for example, is a coalition program launched by American Express last year and includes brands like Macy’s, Rite Aid, Expedia and AT&T. A member can shop at Macy’s and Rite Aid, and then redeem their rewards at Expedia. Plenti members earn rewards quicker (without having to use a credit card) because they have more than one brand to earn rewards with.
“I think it’s successful because the depth of choice. It’s really important to give members what they want and give them value,” says Brown. “If a member in a program sees value in transacting, then he/she will engage more.”
And isn’t this exactly what marketers want? Happier, more engaged customers are more likely to advocate for and become repeat buyers of your brand. Before you get started with a loyalty program, consider Brown’s best practices for coalition success.
1. Know What You Want
As a company, Brown suggests thinking about what verticals you want to develop in. By doing this, you have a better understanding of what partners you want to work with. This is a very important first step because this is what will attract people to your program.
“If you’re doing a coalition program correctly, not only does it give members more options, but it also exposes members to different merchants or programs that they may not have thought about collecting in,” explains Brown. “Now, because they are part of that coalition, it expands their scope and allows them to perhaps try a brand they wouldn’t have tried before.”
This is beneficial to every company within the coalition.
2. Know What Your Potential Members Want
As you are thinking about what you want as a company, it’s crucial to collect information on what your potential members want out of a coalition program.
“Know your customer, look at how they shop, look at how they spend,” suggests Brown. “Figure out where they earn now, where do they want to earn and what are different brands that are important to them.”
3. Create Loyalty
After you figure out what your potential members are looking for, you can create loyalty.
“It benefits companies to be bolder and realize that even though they want to be sticky, they can’t be everything to everyone,” notes Brown. “Pivoting that point of view and realizing that having a customer that knows you are going to give them what they want is going to be more loyal to you, even if it’s not directly from you.”
When customers feel like you know their wants and needs, they will be loyal to your brand. When you partner with other brands that are important to your customers, you create a coalition.
However, Brown believes coalition programs are still one step removed from where reward systems need to be in the future.
“It’s still a little restrictive because you do have a bunch of generally non-competitive brands – you’ll have one brand in each category that someone can earn in. I think the future of loyalty has to be something that allows members to earn in, perhaps, more than one brand in a certain category,” explains Brown.