Why Coalition Loyalty Works—For Both Consumers And Brands

In May 2015, American Express launched Plenti, a new kind of rewards program that enables users to earn points at one retailer and spend them at other participating retailers. While this concept has been around for some time in Europe, this is one of the first times a coalition style program has been successful in the U.S.

Similar programs, such as Spring and ShopYourWay, are also seeing substantial growth, which begs the question: What is it about coalition loyalty programs that make them so successful?  

Here are three primary reasons this style of program has been so successful as well as a look at the future of loyalty currency.  

Coalition Programs Make Loyalty Currencies More Valuable
The more flexible a loyalty program is—meaning the more ways you can use or redeem that program’s currency—the more valuable it is. One of the key benefits of coalition programs is that they give members more choice in where they redeem the points they’ve earned. For example, Plenti users can spend the rewards they’ve earned from regular trips to the gas pump on a new pair of shoes at Macy’s.

There’s great power in giving program members the ability to choose how they earn and redeem loyalty rewards. Most loyalty program members aren’t just racking up points for the sake of it. More often than not, they have a specific redemption goal they’re working toward, whether that aforementioned pair of new shoes or a dream getaway. The more ways a loyalty program allows a member to earn and burn their points, the more valuable it is.

Coalition Loyalty Thrives In A Mobile World
The rise of online and mobile shopping has laid fertile ground for coalition loyalty to thrive. Shoppers want to access their loyalty programs in whatever way is most convenient for them—and for many of us, that’s through our mobile devices.

In fact, 57% of American smartphone users are interested in having access to loyalty programs on their mobile devices. At its core, loyalty is about engagement and deepening a customer’s relationship with a brand, and to be successful, it’s critical that loyalty programs engage members on the platforms most accessible and relevant to them.

In addition, mobile also opens the door for better targeting and rewards delivery. No other channel can use information (like a customer’s exact location) to deliver highly relevant, real-time offers and rewards that can be seen and acted on quickly.

Coalition Loyalty Increases Exposure And Builds Trust
One key benefit of being part of a multiretailer program is the exposure your brand receives. Coalition programs enable retailers to extend their reach and get in front of a wider range of prospective customers.

Plus, consumers are more likely to choose your brand instead of a competing retailer they have no loyalty ties to. And in addition to getting more eyes on your brand, coalition loyalty programs offer value in brand association. Your brand earns credibility when it’s placed alongside other reputable companies.

The Future: Currency Ubiquity
The rapid adoption and acceptance of coalition loyalty programs is evidence that consumers value flexibility and accessibility. Yet while multi-company loyalty programs are a clear step in the right direction to delivering on consumer demands, some progress still needs to be made.

With coalition programs, points are more accessible and flexible than we’ve previously experienced, but the programs themselves are still somewhat restrictive. Members are limited to earning and spending their points among the program’s partners. The ideal that we’re working toward is currency ubiquity—being able to earn and burn your loyalty points with purchases at any retailer.

While we have progress to make before this becomes reality, expect to see more cross-industry partnerships and coalitions continue to make loyalty rewards more ubiquitous in the coming years.

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