This past Wednesday, American Express made an historic U.S. customer loyalty announcement revealing that it is launching a coalition loyalty program called Plenti in the U.S. this coming May. Why was this announcement so historic? Well for one thing, coalition loyalty has thrived for decades in other parts of the world, including Germany, the UK, the Middle East, New Zealand, and just north of the U.S. boarder in Canada. Strangely enough, it has never really caught on here in the U.S.
The launch of a U.S. coalition loyalty program is decades behind other geographies — yet, it is certainly not for lack of effort. It stems from the primary differences between American corporate brands’ mindsets, U.S. geography, the entrenched saturation of proprietary standalone programs, and customer loyalty attitudes. Now, in 2015, we see loyalty is changing — and brands, CMOs, and their trusted partners need to be ready for that change.
Let’s examine what American Express had to do to get these brands to agree to partner with each other and join the Plenti coalition:
While the aforementioned challenges and shortcomings demonstrate some imperfections in the model, remember that Rome was not built in a day. Plenti is in its infancy and we know from the press release that it’s planning to welcome more partners in new categories. This coalition has the opportunity to evolve into successful models seen worldwide, but will have to address the unique needs of the customer and U.S. culture as a whole.
American Express and its new coalition partners should be commended for taking the leap and extending their confidence into this new frontier of American loyalty. Many eyes will be watching carefully to see if Plenti can deliver promised value to its members, partners and American Express shareholders. As well, the fate of coalition loyalty in the U.S. hinges on Plenti’s success. The decision by these brands to move in this direction was certainly taken after much strategic and financial deliberations, combined with bold leadership. Should Plenti prove to be successful for all stakeholders, it will quicken the pace at which loyalty is evolving. Brands, CMOs, and their trusted partners cannot afford to ignore the changing loyalty landscape.
There is no doubt that there will be room for at least two more competitive coalitions, and perhaps a number of regional coalition players. In a country where customers value convenience, it feels like coalition loyalty can deliver on this requirement, and it is long overdue. Coalition certainly has its place, but brands need to question if they want to build loyalty to their own brands or loyalty to a coalition brand?
This blog is the first in a series. Subscribe to recieve the latest blog posts from Bond Brand Loyalty.