Coalition Loyalty heating up in the United States
There was a panel recently at the Direct Marketing Association’s annual meeting in San Diego comprised of some of the top people in Coalition Loyalty marketing. These company leaders from around the globe included representatives from AIR MILES, FlyBuys, Payback and Upromise. And one thing they all agreed on was that a true Coalition Loyalty program that has national reach and national appeal is destined for launch in the United States. The question in my mind is which of those companies, or one of their able competitors, will be the company to figure out how to make Coalition Loyalty work?
For those not familiar with Coalition Loyalty, the idea is to aggregate the purchasing power of a consumer across multiple categories of merchants such as groceries, gas, and department stores. These types of programs are very successful outside the U.S. but surprisingly they haven’t caught on to the same degree here. In Canada, AIR MILES reaches two-thirds of Canadian households. There are many reasons Loyalty experts give for why the phenomenon hasn’t caught on including unwillingness to share data across multiple other companies, unwillingness to implement technology necessary to track the data, desire to build their own programs vs. helping build a separate program and as always, the cost.
Eventually, I believe Coalition Loyalty will catch on here for one reason and one reason alone: consumer demand. I hear it all the time from people that they are tired of signing up for so many loyalty programs and the need to carry little plastic tags on their key chains or in their wallets for all the programs they belong to. The average U.S. adult belongs to over 13 different programs but is active in only a handful. With the launch of the right program and enough consumer demand, companies will have to come around.
So what will it take to create the right Coalition Loyalty program? We’ll take that up in our next post. Please feel free to send an email or post a comment with your thoughts which we’ll include in the article. Until next time…