Learn how to achieve success with your multi-brand loyalty program.
Ecommerce brands often struggle to keep customers engaged in their loyalty programs.
With hundreds of loyalty programs vying for customers’ attention, it’s easy for customers to get distracted, bored, or simply stop finding value in your program, because other loyalty programs may be better than yours.
But there’s one type of loyalty program that has a high potential for engagement — the multi-brand loyalty program.
In this guide, you can learn all about multi-brand loyalty programs, its benefits, and how you can succeed with it.
What is a multi-brand loyalty program?
As the name suggests, a multi-brand loyalty program spans multiple brands under one umbrella. Customers have the flexibility to utilize rewards and points across the entire ecosystem of participating brands. Members of multi-brand loyalty programs have the freedom to use their points according to their preferences. This system offers shoppers a broader range of redemption choices.
Some of the most common examples of multi-brand loyalty programs are from flights, hotel bookings, credit cards, etc. Here’s an example of a multi-brand loyalty program by a bank:
Multi-brand loyalty program and coalition loyalty — difference
Now that we know the definition of multi-brand loyalty, let’s understand what’s coalition loyalty program. Also called ‘shared loyalty program’, coalition loyalty programs refer to a collaborative program where many brands form a partnership.
The key characteristic of coalition loyalty programs is the higher level of freedom and broader spectrum of incentives offered to customers. Participants can accumulate points across all partnered brands and subsequently redeem these points at a different participating brand, providing a unique and flexible loyalty experience.
Many people mix up coalition and multi brand loyalty programs, but the two are different. Let’s look at the differences:
- To begin with, multi-brand loyalty programs have one umbrella company under which there are multiple other brands. But the coalition loyalty program does not have a parent company.
- In coalition loyalty programs, customers have the flexibility to make multiple purchases at a single brand. They can redeem rewards at another brand. This makes it challenging to accurately anticipate potential liabilities.
- In multi-brand loyalty programs, the parent company takes the combined risks associated with the subsidiary brands.
How do customers earn and redeem points in multi-brand loyalty programs?
When shoppers engage with partner brands, points are credited to their membership account by the central issuing entity. The points earned vary based on the brand and the purchase. If a customer uses earned points for a purchase, the partner brand doesn’t lose revenue.
The central issuing entity makes payment to the partner brand at the weighted average value per redeemed point, ensuring the brand is compensated whether through direct payment or a liability transfer for redeemed points.
Benefits of multi-brand loyalty programs
When set up well and managed efficiently, multi-brand programs offer many benefits to brands as well as customers. Here are some of the benefits:
1. Enhance your customer profile
Multi-brand loyalty programs can help enhance the depth of your current customer profiles by leveraging loyalty programs. Here’s how it can help:
- You can efficiently collect valuable customer data by offering perks and rewards
- You can collect data such as email and SMS sign-ups, demographic details, product preferences, and purchase history
- The multi-brand loyalty ecosystem facilitates the exchange of customer information across brands
- Cross-brand customer information provides comprehensive data on customers’ cross-vertical product consumption and purchasing patterns
- This cross-brand data can help you develop segmentation strategies to enhance marketing and promotions
2. Improved customer engagement
A multi-brand loyalty platform creates more opportunities for customers to interact with your brand. When you offer rewards for many actions across many brands, customers tend to engage more regularly. This heightened engagement can result in greater brand awareness, more engagement and enhanced customer loyalty.
3. Offer better experience to customers
Customers expect personalized and engaging experiences from brands. A loyalty program that involves multiple brands can help fulfill their expectations. Brands can collect more data from across the brands under their program and provide highly relevant product recommendations, discounts, rewards, and more.
All these can be personalized to cater to customers’ diverse interests. Moreover, a unified system for offering loyalty points and rewards makes participation more interesting and valuable to customers.
Pro tip: Before implementing a multi-brand loyalty program, brands must establish a solid system with automation across all brands.
4. A competitive advantage for brands
According to a KPMG study, 75% of consumers prefer brands that offer loyalty programs. A multi-brand loyalty program can provide your business with a competitive advantage over those offering traditional loyalty programs. Customers are increasingly inclined to favor brands that provide enhanced value, freedom, and flexibility in their reward programs, making your business a more attractive choice.
5. Distributed earning and redemption for customers
Multi-brand loyalty program models integrate earning and redemption opportunities across various brands, ensuring the sustainability of business and program objectives for all participating entities, including merchants and brands. Multi-brand loyalty programs are centered around the frequency of shopping and engagement, offering a collective value proposition to the participating members.
In addition, when strategically structured, multi-brand programs prove to be highly cost-effective, with the resultant cost savings extending to members in the form of benefits or increased loyalty.
6. Customers can be part of a community
One of the biggest advantages of Shopify customer loyalty programs is they build a sense of community for customers. Most often, brands create online communities, create exclusive in-person experiences for loyalty program members, creating a closer connection with the brand and within the community. With a multi-brand loyalty program, brands can create bigger communities and create more engagement opportunities.
Multi-brand loyalty program examples
Some of the best examples of multi brand loyalty programs are from banks, credit card companies, airlines, and movie theater brands. Owing to their large and diverse customer base across generational segments, these businesses have successfully launched and managed multi-brand loyalty and rewards programs. Let’s look at some examples here:
1. American Express
Most credit card companies offer multi-brand loyalty programs. The American Express rewards program is an excellent example, where customers can earn reward points for various actions and redeem points with many different brands, such as AirBnB, Apple, Amazon, among others.
2. Alaska Mileage Plan
Another example of a multi brand loyalty program is that of Alaska Airlines’ Mileage Plan. Customers can earn points by booking air tickets as well as while shopping from other partner brands under the loyalty program. Moreover, customers can also spend their points at these different brands.
Best practices for multi-brand loyalty programs
Multi-brand programs are definitely an effective way for brands to build strong connections with customers and improve loyalty. If you’re wondering how to build a Shopify customer loyalty program for your brand, you must ensure you follow some best practices. When done well, the success of these programs can bring multiple returns. Here are some best practices to follow:
Make it easy to earn and redeem points
With many different brands housed under one umbrella, multi-brand programs must offer many ways to earn and redeem points. More importantly, it should be easy for customers to earn and redeem points. Here are some ways to do so:
- Streamline the process of earning and redeeming points by automating different aspects of the multi-brand program
- Create straightforward and easy ways to earn points
- Make the points redemption process easy and clear
- Explain how to program works
Move beyond transactional experiences
Today, customers aren’t just looking to save money or earn points from loyalty programs. They expect engaging experiences that add value to them. For instance, better customer service, exclusive events, a community, etc. Hence, if you want your multi-brand loyalty program to succeed, create and offer unique incentives and benefits to customers.
How to build a multi-brand loyalty program for your Shopify store?
You can effortlessly launch a multi-brand loyalty program for your Shopify business with the help of the Appstle Loyalty and Rewards app. Designed specifically for Shopify and Shopify Plus sites, Appstle simplifies the process of launching multi-brand loyalty programs.
The app offers access to a range of features, including gamification capabilities, customization, easy migration from other apps, seamless integration of third-party app, excellent customer service, etc.