Coalition loyalty programs
The more closely we look at coalition loyalty programs the less attractive they appear for member companies. It often looks like the brand of the program operator is advertised much more then the business of participating company. Besides, business offers of any company are getting lost in the long list of various offers from other coalition members and a customer will not associate the company brand with the bonus offer.
If some things are hard to explain it is easier to declare them an axiom. One of such axioms sounds like: “Small companies can only take part in coalition loyalty programs”. The main reason for this is a high cost of rolling out their own loyalty solutions. In our opinion the costs of launching a company own loyalty program is often overestimated.
We don’t want to say then any coalition loyalty program is a mistake. If you can consciously choose a small number of partners then you can gain significant benefits from cooperation, but if the program unites any firm of any kind of business then it makes no sense to join such program.
Here are a list of drawbacks of coalition programs getting any partner without selection:
- focus on coalition program brand, not the partner
- linking of reward program to partner brand is lost in customer mind
- bad or unclear organization of rewards
Such programs aim more to somewhat reckless people, not the loyal customers, but because of usually small rewards even this passion quickly disappears. Don’t forget the saying: “if you want something done right do it yourself”.
We are not arguing for hiring an army of programmers, marketing people, etc. It is sometimes enough to understand whether the coalition is really needed and what partners you want to cooperate and why. Please also consider that creating your own loyalty program is not that expensive nowadays.