September 2, 2015
So how did Plenti fare? Well, it depends…
Through a special arrangement, presented here for discussion is a series of recent articles from Lenati’s blog.
Back in March, when the news that Plenti — a coalition loyalty program developed by American Express — would be launching in the US, we wondered if this country was finally ready to embrace this concept that has been wildly successful in both the U.K. and Canada. In the programs that have succeeded, three crucial elements were present (and were notably missing from the ones that did not):
• Nationwide consistency and relevancy;
• Utility;
• Both an online and offline presence.
Launched on May 4th and backed by a significant marketing effort on TV, the internet and in-store, Plenti included the requisite co-brand card to accelerate earnings (it’s American Express, after all) and some significant brands, including AT&T, Exxon, Macy’s, Mobil, Nationwide, Rite Aid, Direct Energy, Enterprise Rent-A-Car and Hulu.
Source: plenti.com
So how did Plenti fare? Well, it depends …
Relevancy: While securing some national brands, relevancy only happens when you have these brands in your area and already shop with them. The key question: Will this program entice you to shop at Macy’s or Rite Aid if you don’t currently shop there? Unlikely. And with twice as many stores as Rite Aid, you’re more likely to find a Walgreens nearby.
Utility: While telecom, gas, retail and pharmacy are all categories in which the majority of Americans spend money, the utility is lacking at this stage. Gas is the one partnership that involves a purchase more than once per month, but without grocery, mass retail (like Target or Walmart), and other major partners in the everyday spend category, the utility score of Plenti is pretty low.
Online and Offline Presence: Plenti made an effort to ensure both online and offline presence with an online marketplace and an app, but the marketplace is your standard set of participating businesses that are present on most online marketplaces, and the iPhone app has a lackluster 2-star rating.
On the rewards side, points can be secured with some of the nationwide partners, but not all, and a minimum of 200 points is needed to play. No rewards chart tells you what your points are worth, but they appear to be worth about a penny apiece: "For every 1000 points you earn, you can look forward to at least $10 of savings."
While only in phase one in the launch, our advice to American Express would still follow our pre-launch tenets: improve nationwide consistency and relevancy, utility, and both online and offline presence. Pay attention to early reviews. And finally, listen to your customers. Get your early adopters involved in the evolution of your program and they are more like to stay with you for the long haul.
Discussion Questions
What obstacles do you see around the expansion of loyalty coalition programs? What advice would you give American Express to jumpstart Plenti? What other types of retailers does Penti need to recruit to make the program a success?
Poll
BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Ryan Mathews
Founder, CEO, Black Monk Consulting
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This will be a niche program at best. Customers are insisting on convenience above all (that’s what’s driving mobile commerce) and it’s highly unlikely that they will adjust their behavior to win more points on a loyalty program. Had Plenti been launched ten years ago, the story might have been different.
I think choosing retailers who share customers is essential to success — and I am not sure that is being dealt with properly. Plenti also needs to partner with grocery and improve their app and web presence. Finally, they need to find ways to remind shoppers to use Plenti. I have signed up but simply don’t remember to use it and can’t be bothered to remember where I put my card.
A coalition is only as strong as its weakest member, so partner selection is critical. There is another factor at work as well — the collective brand position.
So let’s see … how many Americans love AT&T, trust oil companies, rent cars on a price basis and love “free” television programming? I think you see my point.
As to advice, it would simple be to craft a holistic offering targeted at a realistic customer base, not just toss a series of disparate brands together in a single offering.
The author is right. Theses strategies work best when there is at least one core utility (gas and/or electric) involved, so if I were adding partners I’d start there.
I’ve got an American Express card and they’ve been marketing this heavily to me. And I have to say, I still don’t see a compelling reason to dive in. It’s just another thing I have to keep track of. The only reason I use American Express points is because I don’t have to keep track of those. I’m just not sure the AMEX crowd is the right audience for this, and certainly they need to do a better job explaining why consumers should care — regardless of which brands they’ve managed to rope in.
The coalition rewards program could be a positive for the consumer but the loss of the individual retailer’s loyalty brand is a high price to pay. I think another challenge with the program is the good will in the consumers’ head goes to Plenti, “look at all these great deals I get with Plenti,” and not to the retailer who is shelling out the margin to cover the promo. I’d be curious to see if the Plenti consumer participants spend a greater share of wallet with Plenti retailers vs. their old habits.
As a Nationwide customer, Rite-Aid and Macy’s customer, I signed up. It’s not been advantageous. I was hoping my insurance payments would convert into points but thus far it has not happened. The entire program needs more work. Also, when you sign-up, as with any registration process, you have to provide a lot of personal information. Plenti should issue sign-on reward points just for that. Maybe they do, but again, it wasn’t made all that clear. I was signed up at Macy’s by an overeager sales clerk trying to sell the program. Don’t be fooled like I was. I regret it.
Do consumers think about the current grab bag of providers as a group? I think not? Are consumers loyal to the combined group of products currently available? Probably not. Will being part of Plenti be enough to change consumers’ preferences? Probably not. Do consumers already belong to loyalty/reward programs for the retailers or brands they use? Probably. Do they want another loyalty program to run alongside, in conjunction with, or instead of their current loyalty programs? No.
So my advice is, American Express needs a better, stronger value proposition. There is no compelling reason to add another loyalty program.