Do Coalition Loyalty Programs Still Work in 2024?
A coalition loyalty program is just one among the many types of loyalty programs: the idea of multiple brands coming together to form a shared loyalty program isn’t new, and many benefits could come from this option.
Coalition loyalty programs are a way for customers to earn and spend points while shopping at a variety of companies, and for participating brands to see an increase in sales, touchpoints and user data.
Whether you’re planning to introduce a successful coalition loyalty program or you’re just interested in learning more about shared loyalty programs, this guide can help you understand everything from benefits to key features.
What are coalition loyalty programs?
A coalition loyalty program involves the collaboration of multiple brands across various market sectors, pooling their resources to enhance customer retention. These brands unite to create a shared program, utilizing a common promotional currency and data collection efforts.
By actively participating in the coalition, consumers gain increased opportunities to earn rewards, thanks to the wide network of partner brands available.
At White Label Loyalty we predominantly use the term ‘multi-tenanted’ when talking about coalition programs but for the purpose of this article, we’re going to use coalition loyalty programs.
The pitfalls of coalition loyalty programs
In the past, there have been a few times when coalition loyalty programs have not fully realised their potential. This has led to discussions that coalition loyalty programs are no longer relevant or effective.
Plenti is an example of a that had quite a short life span. American Express created the program in 2015 in order to reward customers for purchases at certain retailers and brands. Following the exit of a number of partners, the program ended in the summer of 2018. So why did this program only last three years?
The main criticism levelled at Plenti is that the program lacked focus: in all the best coalition loyalty programs, contextual relevance is key, and without alignment to an overarching cause, the message becomes diluted.
Another key issue was the fact that credit card access was limited to AmEx cardholders only, without an alternative like with other coalition programs. That’s a big limitation to have in a loyalty program, and many potential members were lost because of that.
That's why White Label Loyalty offered a user-friendly card-linking technology with both Visa & Mastercard to Dubai Holding, when creating the rewards program that allowed customers to shop and redeem points in over 1000 participating outlets across the UAE. If you want to know more, head over to our Tickit case study.
One other clear pitfall to avoid is choosing the right partners, that is not competitors. Brands and products included in a coalition loyalty program should be complementary rather than competitive in order for participating brands to see success.
Learn how to launch a successful loyalty program!
What are the benefits of successful coalition loyalty programs?
We've had a look at the possible pitfalls of coalition loyalty programs but let's now assess the positives. In 2024, customer experience is more important than ever, 34% of customers would stop doing business after a bad experience.
Coalition loyalty programs can provide the avenue to create that great customer experience. There are some clear advantages to brands starting a coalition loyalty program.
The combination of particular brands' marketing strength to work together is a very clear positive of a coalition loyalty program. By combining multiple brands' communications, they can cut through the noise. This is particularly visible with cross-promotion opportunities.
Additionally, by running a rewards program in coalition, you can maximise cross-sell and customer acquisition opportunities and strengthen your brand positioning. Finally, by using shared data, customer experience can be improved.
One industry where coalition loyalty programs have thrived is aviation. Alliance programs such as Star Alliance, SkyTeam and Oneworld offer customers the chance for their loyalty miles to be coordinated with other airlines.
This is for the purpose of providing an efficient and hassle-free experience for the customer. The shared marketing strength that is garnered from coalition loyalty programs is therefore reflected in these alliances.
Consumers, on the other hand, believe that with coalition loyalty they are getting a higher value proposition. Some data suggest that it is also easier to achieve valuable rewards faster in coalition loyalty programs, which contributes to higher engagement and redemption rates.
So overall, despite the pitfalls, there is still a case for coalition loyalty programs to be considered relevant in 2024.
Examples of successful coalition loyalty programs
We talked about a clear example of a coalition loyalty program that didn’t work, but what are some of the most successful, largest coalition loyalty programs in the world?
Nectar Loyalty Card
Nectar is one of the best coalition loyalty programs examples: it includes 16 core members such as eBay, DHL Express, and British Airways. The points can also be collected by purchasing from a number of online retailers.
Nectar reports some impressive numbers, with 18 million active members and an impressive partner portfolio that covers most segments of everyday spending.
Air Miles ME
This coalition loyalty program operates throughout the UAE, Qatar, and Bahrain, and has enrolled over a million members, delivering over 760,000 rewarding experiences to its members since launching in 2001.
Users can collect and redeem Air Miles with partner brands both in-store and online.
PAYBACK is another great multi-brand loyalty program example. It launched in Germany in 2000, and currently claims more than 600 online partners and 35 retail companies in Germany.
Using their mobile number or loyalty card number, it offers users omnichannel loyalty and targets them with personalised promotions to increase their points earnings. PAYBACK partners also benefit from an exclusivity agreement, which prevents their competitors from using it.
What does White Label Loyalty offer for a coalition solution?
Our Multi-Tenanted solution can offer a variety of components in order to provide you with the best possible coalition solution for your company. We have the capacity to allow you to administer an unlimited number of different business tenants allowing you to be flexible and efficient. These include the following core platform modules…
- Usage of our loyalty console: to give you complete control and visibility of your loyalty program.
- Usage of our loyalty engine: our events-based AI that drives the White Label Loyalty platform.
- Our analytics module provides you with meaningful insights at your fingertips including custom queries and charts.
- White Label Loyalty's referral module creates a frictionless experience for customers to refer friends and colleagues with ease. This is particularly powerful in coalition loyalty programs as cross-sell and customer acquisition are ever-present.
- The card linking data capture solution turns payment cards into loyalty cards. This allows for a smooth experience with whichever tenant that customer is purchasing from. Perfect for shopping centres, malls & more.
- Finally, our Mobile App provides the perfect place to house your loyalty solution.
Want more proof? Here’s our client Wotzon Rewards’ case study!
As you can see, there are several benefits of a coalition loyalty program, and both program owners and tenants can hugely benefit from this type of partnership.
Coalition loyalty programs are still definitely relevant in 2024, but the key is for brands to set clear goals for building long-term consumer loyalty and ensure there’s no brand erosion by participating in the program.
If you believe that our multi-tenanted solution is right for you, please get in touch!
If you enjoyed this article, check out these relevant posts below.
Share this Article
Jack was our Marketing Assistant. He helped with content creation including writing the blog posts you love to read!