For businesses, customer loyalty is the golden goose. But, the hyper-competitive industry makes it difficult for companies to keep their customers engaged for a long time.
A PwC report reveals that acquiring a new customer is five times more expensive than retaining an existing one. And, to engage and retain existing customers, you need a strong foundation of loyalty programs.
Say goodbye to scattered points and welcome coalition loyalty programs to earn rewards!
Coalition loyalty programs offer a win-win approach for businesses and their customers. Unlike traditional loyalty programs, these programs give liberty to their customers to accumulate rewards from different brands within the coalition.
A simple approach for enhancing customer engagement, creating an extensive network of participating ventures, and increasing brand loyalty. With this, businesses extend their collaboration to a large customer base, providing access to valuable insights into customer preferences and behavior.
Gartner predicts that 33% of companies without loyalty programs will establish their own by 2027. The strategic shift in how ventures retain their customer base, speaks volumes about the increased use of loyalty programs. The best part is that loyalty programs yield results. As stated in a global customer loyalty report, 80% of companies reported a positive ROI on average, which is 4.9 times more revenue than costs because of their loyalty programs.
So, here we are with a comprehensive guide to help you explore innovative strategies to boost your business and turn customers into loyal fans with different types of loyalty programs like coalition programs. Let’s dive into why coalition programs are the best!
Termed as a shared loyalty program, it involves a partnership between two or more non-competing businesses to offer a unified loyalty program where customers can earn and redeem rewards for all participating brands. Collinson, a leader in customer loyalty solutions states that 87% of program members are more likely to do business with a company offering a loyalty program.
A powerful solution for companies, these programs attract customers with a compelling range of rewards, from their favorite gas station to their preferred airline. That’s how customers actively participate with a sense of excitement and connection with the entire coalition.
Another reason why businesses benefit from coalition programs is improved customer retention. Incentivizing customers with a broader reward spectrum strengthens the bond between the customer and the company. Plus, it targets a larger customer base by capturing a wider audience.
With this approach, customers get a chance to explore new offerings from different brands, not just their favorite brands. And, the company gets to build an impactful loyalty program for themselves. For businesses, coalition loyalty programs fetch valuable insights into customer behavior and preferences. Shared data with partners leads to a comprehensive understanding of consumer habits leading to tailored marketing efforts and personalized customer experiences.
Technology, being the foundation of these programs, 53% of B2C marketing decision-makers increased investment in loyalty technology. In short, these loyalty programs set a customer-centric and business-forward platform for a seamless customer experience.
Note: Created by larger groups with multiple subsidiaries like PepsiCo., multi-brand loyalty programs are different from coalition programs. Under the coalition, there’s a single subsidiary that extends to several participants, for instance; mall loyalty programs.
Here’s how coalition programs are setting examples for brands all over the world:
The most noteworthy example of a successful coalition loyalty program is where the teams of Star Alliance, Oneworld, and SkyTeam bring together multiple airlines to let passengers earn and redeem frequent flyer miles globally.
Within this unified loyalty program, travelers enjoy benefits like shared lounges, seamless connectivity, etc. For example, a passenger flying with one brand within the airline alliance can easily accrue miles and enjoy status benefits with other member airlines as well, making it a rewarding and seamless customer experience for frequent flyers.
Another Example is Club Vistara, a frequent flyer program that partners with non-airline brands to offer a comprehensive rewards system including shopping, car rentals and more to enrich customer experience. India’s fastest rewarding Frequent Flyer Program (FFP) follows the tier model with 4 tiers – Base, Silver, Gold, and Platinum based on your score.
In the retail sector, loyalty programs help customers earn and redeem points across varied stores. For instance, in the U.S., Shop Your Way, a coalition loyalty program rewards members for shopping at a wide variety of stores in-store and online. Members can turn in reward points by availing of brand gift cards from Walmart, Lowes, Amazon, American Airlines, Dunkin Donuts, and others. The program also includes various categories for members to earn and redeem rewards.
The smarter way to shop is with more choices and more rewards.
Nectar, a popular coalition program in the UK with the majority of participation from banks, has partnered with a variety of retailers like homeware stores, gas stations, supermarkets, etc to help customers earn points in their everyday routine through everyday purchases.
Lloyds Bank and Sainsbury’s Bank offer co-branded credit cards to accelerate Nectar point accumulation on a few specific transactions. Redeem points for discounts with travel rewards, or at partner stores, and sometimes customers get cashback too. The success of such programs lies in diverse partnerships and customer retention.
TopCashback is a cashback site that collaborates with e-commerce merchants like eBay, Paytm, Flipkart, Mobikwik, and Myntra. Customers get a percentage of their spending as cashback when they shop via their website. Classic and Plus accounts offer different rewards, referral bonuses, standard cashback, bonus cashback, exclusive deals, and community features for customers.
A study reports that 72% of B2B companies trust that loyalty programs are effective in driving in-depth partner engagement. The following examples prove the same:
World Wide Technology Pathways (WWT) is a technology solutions provider that offers Pathways, a program rewarding resellers for selling bundled solutions to multiple vendors. To encourage partners to promote a broad range of products and services, the program fosters collaboration within the WWT ecosystem.
McKesson Connect is a healthcare distribution and services company that uses Connect to reward pharmacies for achieving performance goals or purchasing specific products. The coalition loyalty program involves rewarding pharmacies to stock and promote healthcare products to streamline the supply chain within the industry.
Scene+ was originally established as a joint venture between Cineplex and Scotiabank to target Millennial customers. Here members earn points by purchasing at Cineplex-owned cinemas in Canada and through their partners.
Under this program, you can spend using Scotiabank debit or credit card, shop at Sobeys grocery store, Home Hardware stores, the Expedia travel site, and many restaurants under the recipe brand and the Rakuten online shop. Further, these points can be used for participating at retailers, restaurants, or discounts at Cineplex locations.
Businesses recognize their unique strengths with industry-specific coalitions to cater to customer needs across different facets. For example, a coalition between health food stores and fitness centers or wellness services might create a holistic loyalty program motivating customers to adopt a healthier lifestyle. All the above cases exemplify the potential for collaborations to drive business growth and enhance customer retention.
Join the coalition with everyday purchases that add up to big rewards!
While loyalty programs are lucrative assets for a company, they also have some limitations:
On the whole, it is all about the power of shared loyalty.
To build a strong foundation of a coalition loyalty program, you need a well-framed thoughtful strategic implementation. Here’s how you can create and launch an effective coalition program:
With coalition programs, every purchase takes you closer to your favorite brand.
In the end, don’t forget to actively promote the loyalty program to existing customers and new ones through targeted marketing campaigns.
Coalition loyalty programs provide a simple and seamless customer experience. Deloitte’s Annual Survey on loyalty program preferences states that consumers rank ease of earning and redeeming rewards and easy sign-ups as the most critical attributes of loyalty programs. So, why not build a loyalty program that helps your business stand out in the ever-growing business dynamics?
Get in touch with the global leader in the consumer benefits marketplace i.e. Thriwe to launch an innovative loyalty coalition program for your business. Thriwe helps you build, curate, and implement a framework that customers are excited to use. To discover what else is possible with Thriwe, connect today!