Through a special arrangement, what follows is a summary of an article from COLLOQUY, provider of loyalty-marketing publishing, education and research since 1990.
Loyalty marketing in the U.S. just branched out into new territory with the planned launch by American Express of Plenti, a coalition loyalty program. Such multi-merchant plans are popular in other parts of the world but haven't gained a foothold in the U.S.
American Express spent the last couple years exploring the possibility of a coalition program and was stunned by the level of interest from consumer focus groups as well as companies that it spoke with while finding potential partners.
"The response was overwhelming to us," said Abeer Bhatia, CEO of U.S. Loyalty at American Express.
Plenti will launch in May with an initial roster of seven partners — AT&T, Exxon, Macy's, Nationwide, Rite Aid, Direct Energy and Hulu. Members of the free program will earn points when they shop or do business (say, paying their premium or getting an insurance quote at Nationwide) at any of the partner companies and can redeem them for rewards at the various places. Partners pay a one-time fee, along with ongoing performance-based fees.
While American Express will administer the program, members will not be tied to using its card for payment with the partner companies — in fact, any payment type is acceptable, including MasterCard, Visa and cash. The goal is to be as welcoming as possible, said Mr. Bhatia. There will also be no sharing of transactional data among program partners, he said. If a consumer buys a face cream at Rite Aid, that data is not passed on to other partners.
The program will have a mobile app and website-based platform, as well as traditional membership cards. Points earned will be valid for at least two years.
Mr. Bhatia said the time is ripe for coalition loyalty in the U.S.
"You need two components — the right operator to help put this together and administrate it and put the technology behind it, and the right partners," Mr. Bhatia said.
Unlike some others that have considered a foray into coalition marketing in the U.S., American Express has an understanding of the U.S. marketplace. It also has program operation experience gleaned from outside the U.S. through its 2011 acquisition of Loyalty Partner, which operates coalition programs in Germany, Mexico and Italy.
As for the right partners, Mr. Bhatia said it's critical to make sure they represent a variety of industries and, more importantly, that they have the right mindset of collaboration and relentless commitment to consumers.
Other companies are exploring potential partnership with Plenti, but they would have to fit the mindset and be in complementary, not competitive, businesses from existing program partners.