Coalition loyalty programs have been around for decades, with limited success in the US. In Europe and Canada, they have had more success with programs such as Air Miles. So, when we saw the recent much anticipated launch of Plenti, I thought it made sense to address the concept in this blog. Plenti is the PAYBACK brand launched in the US this May; run by Loyalty Partner, a division of American Express. PAYBACK has been running in several countries outside the US for several years with over 600 partners.
Looking at the current web site for Plenti, it looks like they have secured a few national partners such as Macy’s, Exxon, Rite Aid, and the National Car Rental group. It’s a point-based program that requires you to carry a separate card with some locations offering the option to use your phone number as an alternative ID. In general, it looks like you earn about 1% of spend, with promotions at a higher rate. What does that mean? For example, for every $1,000 you spend, you earn about $10. This varies by partner, and product or service. They also offer this to several on-line partners. In most cases, it looks like points earned can be converted to awards in the form of dollars and used at the partners. Their web site gives you all the details.
So, what is my reaction?
The program looks great as far as easy to use for customers, other than it appears you need a separate card for many partners or need to know your account number. Though there are a very limited number of participating partners at this time, my guess is it will grow.
The award amount earned of 1% is low. Will this really engage customers to carry an extra card and all that is required to be engaged? Also, the awards you earn are not compelling, all you get are dollars to spend at the partners. Given the challenges of coalition programs in the US, I don’t see this as being a strong enough value proposition to get a lot of traction.
Most of the listed partners have their own loyalty programs. My guess is that they have no plans to end those programs. It may be that this is more interesting for the partners as a tool to capture new customers versus a loyalty program for their existing customers. Time will tell.
With the backing of American Express, this effort will sure to be a good test of the coalition program potential in the US. Historically, there have been many failures.
In summary, we at Tecmark feel loyalty programs are most effective when they are custom designed and delivered for each business with the ability for that business to adjust and build the program over time. They can give their customers the best value for engaging in the program and use that program to market to their customers. For now, I recommend businesses wait and see what Plenti becomes. Use your valuable marketing dollars to improve your existing program. For small to mid-sized businesses, that may be your only choice as the partners Plenti is targeting are the large national companies.
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Founder & CEO