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Two Cornerstones That Can Make or Break Coalition Programs

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By: Ivan Schwartz, BRewarded Group |

Posted on May 24, 2023

The role of the Cause and the Connection

Businesses, take note. At the heart of the always dynamic and evolving loyalty landscape lies the key to an enduring bond between customer and brand: a little thing called “coalitions.” Coalitions have the potential to re-shape how forward-thinking brands can engage customers, create experiences, and grow loyalty participation. The power of coalitions in brand loyalty is no trifle consideration; if well executed, it can be the driving force behind a thriving connection between companies and their patrons, offering a stronghold of stability amidst the turbulence of change.

This coalition concept is not new and has gained momentum in recent years, propelled by a growing awareness of the interconnectedness of our world. But the advantages of coalitions for brands have long been neglected, especially in the US. While the subject is complex, let’s take a moment to simplify things down into two important areas which can operate in tandem and help coalition programs find reliable footing: the “cause” and the “connection.”

The “Coalition” and the “Cause”

It might seem like an odd notion: connecting many different, often unrelated brands into one loyalty platform. Digging into the concept, however, reveals an unambiguous power behind these equity relationships. Merging the marketing prowess of numerous brands and sharing customer databases between them magnifies the acquisition funnel for all partners, while also unlocking potent cross-brand promotional possibilities. Looking holistically at coalition programs, one concern often revolves around the unrelated nature of participating brands. Won’t these alien identities dilute the final message and erode succinct impact? The truth is, it can…unless loyalty practitioners bring another factor to play alongside the “coalition” concept.

It’s called the “cause”.

To set the stage, let’s take a step back in time. In 2018, a program considered to be the savior of coalition loyalty ­– the Plenti loyalty program ­– came to end.

Coalition programs weren’t hugely popular in the US, but Plenti was meant to break through all obstacles. Plenti pulled all the stops: launched in 2015 by American Express, the Plenti program featured an impressive roster of participating brands, including retailers like Macy’s and Rite Aid, gas station chains like ExxonMobil, rental car companies like Alamo and Enterprise, restaurants like Chili’s, and more.

But just a few years later, the plug was pulled on Plenti. In truth, the program never really found its footing: one source estimated some 30 million people signed up for Plenti but fewer than half ever used their points to redeem anything—and even then, redemption metrics were ephemeral.

If this sounds like an indictment of coalition programs, it’s not. The ultimate lesson from Plenti's downfall emphasizes the critical role a unifying cause or focus must play in the success of coalition loyalty programs. Assembling a diverse array of brands under one loyalty umbrella is not enough; the key lies in crafting a clear, coherent narrative that resonates with consumers and brings together participating brands on a deeper level. Without a distinct cause or focus, the coalition risks diluting its message and confusing audiences, resulting in lackluster engagement and subpar outcomes.

There’s plenty (pun intended) of proof that this causal alignment can work wonders to support coalition programs. Just look at the (RED) initiative, which unites disparate brands like Apple, Nike, and Coca-Cola in the fight against HIV/AIDS. By rallying around a shared mission and leveraging their collective marketing prowess, these brands have managed to raise awareness and funds for a global cause, while simultaneously strengthening their connections with consumers who share their values.

And of course, up-and-coming platforms like Points4Purpose are changing the game for brands looking to connect customers social causes. P4P introduces sustainable fundraising streams that do not detract or divert from traditional charitable sources; rather, they offer businesses the opportunity to be a part of something bigger than just their brand. By linking their customers to social causes through purchase-based activities, customers can not only take advantage of special offers but donate money to their favorite charities with every dollar spent.

So consider Plenti’s failure as a cautionary tale, illustrating the importance of a distinct “cause” focus for coalition loyalty programs. By aligning themselves with a common mission, especially a socially oriented one, brands can inspire lasting connections with consumers and maximize the efficacy of their loyalty initiatives.

The “Coalition” and the “Connection”

We're not done with the Plenti program just yet. There’s another significant lesson that can be gleaned from its demise: the importance of inclusive access to programs. By excluding a large portion of potential participants, the Plenti program inadvertently hampered its own growth and impact.

How did this happen? One of the critical infractions Plenti committed was limiting its membership to American Express cardholders. Sure, it was an American Express program, but thinking more about this basic architecture and the inevitable outcome, the single-point-of-access effectively narrowed the reach of the program and reduced the ability of participating brands to fully leverage the power of coalition. With such a limited member base, Plenti was unable to achieve the scale and engagement necessary to create a thriving ecosystem.

There is a better way. Novel technologies such as cardlinking offer a more inclusive and accessible approach to coalition loyalty programs. Cardlinking enables customers to connect many existing payment cards to a loyalty program rather than relying on a niche property, allowing them to earn rewards and benefits from participating brands without the need for a specific card or additional registration. This technology effectively opens the door for anyone with a payment card to participate in a coalition loyalty program.

By embracing cardlinking and other inclusive technologies, coalition loyalty programs can break free from the constraints of limited access and tap into a broader customer base. This wider reach also allows participating brands to benefit from a more extensive network of engaged customers, driving increased sales and loyalty while fostering a more robust and resilient coalition.

The saga of the Plenti program serves as a valuable case study for understanding the critical factors that contribute to the success of coalition loyalty programs. By focusing on a distinct cause or mission, coalition programs can create a strong sense of unity and purpose among participating brands and consumers. Moreover, by ensuring unrestricted access to the program, coalition loyalty initiatives can reach a larger audience and maximize their potential impact.

So, as US brands continue to explore the potential of coalition loyalty programs, it is essential to keep the above lessons in mind. By aligning with a shared cause, fostering a sense of unity and commitment, and embracing technologies that promote accessibility, coalition loyalty programs can thrive and become powerful drivers of customer engagement and brand loyalty.

The modern consumer seeks authenticity, purpose, and connection – and by addressing these needs through a well-designed coalition program, brands can forge lasting bonds with their customers and pave the way for long-term success.

To register to participate in the US launch of Points4Purpose, click this link.