Lessons from Coalition Loyalty Programs

Coalition loyalty programs have been suffering lately. Since their beginning coalition programs set out to create a single loyalty program that connects multiple retailers and brands throughout various industries. The thought behind these programs was if one loyalty program could be used throughout multiple brands that would help the whole and get more customer loyalty across all participating brands.

But recently things do not look like they are working as intended and coalition programs, like the Plenti® program, have an uncertain future. With multiple brands deciding to branch out and create their own branded loyalty program, it looks like coalition programs are nearing the end of their days.

So, what lessons can be learned from the rise and fall of coalition loyalty programs?

1. Own the customer experience. Loyalty is a one-to-one connection between a customer and a brand. When there are too many brands in one program the messaging can be convoluted and irrelevant to each individual customer. It is important for brands today to be in control of each touchpoint throughout the customer journey and experience. Marketers are empowered to push levers within the customer journey to pull them into the loyalty “loop” where customer skip evaluating other brands and continue to come back to your brand and products time and time again.
2. Relevance is the key to success. It is important to always align your marketing strategies and messages with your customers. For customer interactions to be meaningful, they should be based on customer insights. What does the customer care about? Why should the customer care? Before pushing content out, marketers need to understand the customer and then build a strategy that aligns with their expectations. Customer insights allow retailers to employ the three R’s of marketing: relevance (making a one-to-one relationship), retention (limiting opt-outs and keeping customers engaged), revenue (capturing incremental spend).
3. Integrate loyalty into all operations. Programs succeed when they are integrated into every aspect possible starting with enrollment. That means that retailers have all the possibilities available to them to capture customers interest and get them to become a member of the program. This also goes beyond just having a card or a mobile app, employees need to buy into the program too so they can sell it when they are in front of the customer. Loyalty also extends to operations for messaging and providing a frictionless checkout experience, through a mobile payment or online ordering.

I will be discussing these lessons from coalition programs in an upcoming webinar and provide an in-depth analysis of each of these topics.