Coalition loyalty. Why wadata marketplace is the solution?
Firstly, let’s explore what we mean by saying coalition loyalty scheme. The participation of multiple brands is critical for the success of such a strategy. Brands come together to agree to share sources to achieve their shared goal of customer acquisition and retention. These resources include a common promotional coin, data collection, and the costs to build and run such a program.
Combining remarkable brands’ marketing strengths to work together is an obvious advantage of a coalition loyalty program. By combining various brands’ communications, they can cut through the noise. This is especially evident in cross-promotion opportunities. Additionally, running a rewards program in a coalition can maximize cross-selling options and customer acquisition possibilities and strengthen your brand positioning. Finally, by using shared data for interests and preferences, customer experience can be improved.
A great example of a coalition loyalty program that has flourished is in aviation. Alliance programs such as Star Alliance or SkyTeam offer regular flyers the chance to adjust their loyalty miles with other airlines. This is to provide a practical and seamless customer experience. The commonly shared marketing strength that is garnered from coalition loyalty programs is therefore reflected in these alliances.
Other industries where such loyalty alliances can work constructively are the cases of malls and/or sports clubs and training clubs where a seamless user experience can be created. The common marketing power gathered by these programs is therefore reflected in these alliances.
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Marketplace loyalty programs or coalitions can also benefit vendors.
When marketing activities occur, there is always someone who has to foot the bill. Most of the time, offering discounts and gifts or any freebies through a loyalty program is done in a partnership with a vendor. The marketplace may have a contract with different vendors in which they agree to run a certain number of marketplace-specific promotions each year. Or the marketplace or coalition scheme itself may decide to cover the costs of promotions up to a specific value.
Sellers in such programs can also offer incentives as an add-on to their existing loyalty programs, doubling the benefits without increasing their investments.
Nowadays, marketplace loyalty programs are a game-changer when many payment institutions, retailers and banks, struggle to find new ways to re-establish customer trust and relationships. More banks and neo-banks build marketplace solutions to ‘plug in’ to services from other sectors. There is an enormous expanse to grow targeted loyalty programs that profit all participants of the transaction.
Of course, there is not a one-size-fits-all loyalty program, and marketplaces must try out a lot to find out what works the best. They also have to study and adjust to what motivates various consumers. Some will be forced by the emotional experience of a loyalty program and their affiliation to a brand. In contrast, others will only be motivated by the money-saving possibilities.
Coalition loyalty: What is it in for the customer?
There is a higher opportunity to earn rewards for consumers who participate in the coalition or marketplace loyalty program systematically. This happens as the benefits of using multiple partner brands across the network multiply.
It is vital to consider that in 2021, customer experience is more important than ever; 34% of customers will stop reacting with companies or brands after a bad experience. Coalition loyalty programs can provide the venue to create that exceptional customer experience.
It is clear that there are some advantages for brands to start a coalition loyalty program.
When loyalty programs are integrated into a marketplace solution offering, the benefits are all-embracing. The marketplace owner ultimately benefits by becoming the facilitator of a community that cares for its loyal customer and its sellers, encouraging their return business and providing access to richer customer data.