Definition

coalition loyalty program

A coalition loyalty program is a loyalty card system that offers incentives to customers of two or more businesses in return for allowing those businesses to collect user data. Such a program packages customer benefits into a single customer loyalty program.

Coalition loyalty programs are often used by small and medium-sized businesses (SMBs) because it allows a cost-effective way to offer customers a variety of attractive benefits that they would not be able to provide without the support of other businesses.

From a business perspective, coalition programs offer a number of benefits:

  • Funding requirements (and risks) are split between multiple companies and don’t all fall on one organization.
  • Businesses can share customer data -- about preferences, lifestyle and demographics, for example.
  • The increased value of multiple incentives may attract new customers to businesses they wouldn't ordinarily patronize.
  • Partners can benefit from cross-promotion and combined deals.

From the customer perspective, a coalition loyalty program offers a wider range of incentives associated with a single card. Furthermore, because the costs are lower than for individual loyalty plans, businesses may be able to pass those savings on to the customer as more attractive incentives. 

 

 

 

 

This was last updated in December 2010
Posted by: Margaret Rouse

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