It goes without saying that well-managed loyalty programmes with relevant rewards offer tremendous benefits to businesses and their customers. But creating your own in-house loyalty scheme isn’t the only option for businesses that want to offer rewards.
Another option is becoming part of a coalition loyalty programme. Typically, businesses and brands will join one overarching loyalty scheme – such as the UK’s Nectar card programme. Customers can then earn points when, for example, doing their weekly supermarket shop, but put these points towards a flight to New York, rather than something from the deli aisle.
Coalition loyalty programmes have proven to be very successful. One study reported that, in mid-2015, 2.07 billion consumers worldwide were likely to be members of at least one coalition loyalty programme.
In the first of two posts on coalition loyalty schemes, we look at how three schemes work in action: one for a travel brand, one for a finance brand involved with travel brands, and a lifestyle loyalty scheme that includes travel brands in its portfolio.
Budget Latvian airline, Air Baltic, uses a loyalty currency called PINS, which programme members can collect and use for online shopping, travelling, eating out and even buying groceries. The programme also has an extensive online reward store, and allows members to combine their PINS with local currency to buy rewards.
American Express launched a coalition programme called PAYBACK in Germany in the year 2000. This was rolled out to Poland, India, Mexico and Italy before being launched as Plenti in the American market in 2015.
In Germany, PAYBACK’s partners include brands like Samsung, Hotel Formule, MakeMyTrip.com, TripAdvisor and Amazon.
Analysts have argued that the relatively late take-up of coalition loyalty schemes in America was due to American consumers being “brand buyers” first and foremost.
In addition, coalition loyalty schemes tend to require brands to have an open-minded attitude to working with other brands, and some businesses feel protective over their customer data.
Nectar is a UK-based coalition loyalty programme with around 400 partners that include all sorts of brands including Alton Towers theme park, American Express, Argos, BP, easyJet, Eurostar, Expedia, English Heritage, Sainsbury’s and VUE cinema.
According to the Financial Times, around 92% of UK adults have at least one loyalty card, and 19 million of them have a Nectar card in their wallets.
By collaborating with multiple brands, Nectar is arguably the most used coalition loyalty scheme in the UK, and building itself to be as big a brand as its partners.
All the brands above recognise that through coalition with other partners, they are ensuring that consumers think of them not just when they are interacting with the brand itself, but also with other partners.
In our next post, we’ll look at the top four benefits of running a coalition loyalty scheme if you’re a travel brand.
Business Development Manager