Are Coalition Loyalty Programs Still Relevant? (with Examples)

Introduction to Coalition Loyalty Programs

A coalition loyalty program is a type of loyalty initiative where multiple brands collaborate to create a shared rewards system. This concept isn't new, but the benefits it offers to customers and participating brands remain significant. 

In this post, we’ll explore the current relevance of coalition loyalty programs, their advantages, pitfalls, and successful examples in 2024.

What Are Coalition Loyalty Programs?

Definition and Structure
 

A coalition loyalty program involves several brands pooling resources to enhance customer retention. These brands unite to create a shared rewards program, utilizing a common promotional currency and collective data collection efforts.
 

By joining a coalition, consumers can earn and spend points across a wide network of partner brands, increasing their opportunities for rewards.
 

At White Label Loyalty, we often refer to these programs as "multi-tenanted" solutions, but for this article, we’ll use the term coalition loyalty programs for clarity.
 

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 about 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.

Another crucial pitfall to avoid is selecting appropriate partners. Brands included in a coalition loyalty program should be complementary, not competitive, to ensure mutual success…

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 is an 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 to provide an efficient and hassle-free experience for the customer. The shared marketing strength 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 today.

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?

What Does White Label Loyalty Offer for Coalition Solutions?

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.

Frequently Asked Questions (FAQs)

1. What are coalition loyalty programs?
Coalition loyalty programs involve multiple brands partnering to create a shared loyalty program. Customers can earn and redeem points across participating brands, enhancing their shopping experience and providing greater rewards.
 

2. How do coalition loyalty programs work?
Customers earn points by making purchases at any of the partner brands within the coalition. These points can be accumulated and redeemed for rewards, discounts, or special offers, creating an incentive for customers to shop with participating brands.
 

3. What are the benefits of coalition loyalty programs?
Some benefits include increased customer retention, cross-promotion opportunities, enhanced customer experience through shared rewards, and improved data insights for participating brands.
 

4. Can coalition loyalty programs fail?
Yes, coalition loyalty programs can fail if they lack focus, choose inappropriate partners, or do not provide sufficient value to customers. A notable example is Plenti, which ended due to misalignment and limited accessibility.
 

5. What are some successful coalition loyalty programs?
Examples of successful coalition loyalty programs include Nectar, Air Miles ME, and PAYBACK, which have demonstrated significant engagement and customer retention through their shared rewards systems.
 

6. How can White Label Loyalty help with coalition loyalty programs?
White Label Loyalty offers a Multi-Tenanted solution that provides a customizable platform, analytics, referral modules, and card-linking technology to help brands effectively implement and manage coalition loyalty programs.