Can an Umbrella Loyalty Program Work For You? Q&A with Loyalty360

Describe an umbrella program and how it’s different from a traditional program and from a coalition program.

A coalition loyalty program many people were once familiar with was Plenti Rewards. Their idea of having one system for multiple merchants sounded wonderful. However, looks were deceiving. Their multi-merchant design allowed customers to redeem rewards at stores in which they did not make the purchase at, making it highly unfair for opposing merchants. This created an accounting nightmare regarding company liability and accountability. Almost like a game of Russian roulette. When was the merchant going to pay, and how much?

Loyal~n~Save is not like Plenti. We brand ourselves as an umbrella program instead of a coalition because while we have multiple merchants housed under our program. All points and rewards are kept completely separate. Umbrella programs have a similar feel as coalition programs (i.e., with all stores listed as participants), except each store has their own point bucket and options to create their own campaigns and offers. The campaigns available to merchants go way beyond points or virtual punch cards, and offer rich and dynamic options that can be customized in pretty much any way you choose. We also give merchants an online Swag Shop where they can customize their rewards for point redemption. This differs from coalition loyalty programs because in this case, your program is literally what you make it.

Coalition programs seem to attract enterprise brands.  Do umbrella programs focus more on enterprise, mid-tier or SMBs?

Umbrella programs, and specifically Loyal~n~Save, are available to whoever wants to participate in them. This could be enterprise brands, businesses with a few locations, or even small local shops. In our case, small to medium sized businesses (SMBs) are the merchants of our focus. Enterprise brands often already have their own single-branded loyalty program, which is fine, but excludes an entire population of smaller sized businesses whose participation could be beneficial for all parties involved. Not to mention, smaller sized businesses often overlook loyalty and marketing efforts in an attempt to maintain financial bearings. Many of these companies cannot afford their own branded loyalty program, but with Loyal~n~Save, loyalty, marketing, and brand awareness is all built into the program. We believe utilizing an umbrella loyalty program is an extremely effective and inexpensive way for SMBs to acquire new customers while keeping money in their bottom line.

What types of brands are best to partner under an umbrella?

Any brand that wants to foster loyalty, gain new customers, and increase brand awareness. Umbrella programs are a great way for businesses to expand their customer reach and build their brand. Enterprise companies have been developing their own proprietary loyalty programs and campaigns to work with their industry and creative marketing efforts, but SMBs have been left to create or join programs on their own. These large franchises and corporate owned national brands are spending big money on marketing to drive traffic to their brand, but many SMBs cannot afford outlets like TV or radio to make the presence needed to build visit frequency and brand equity. A lot of smaller companies might not leave themselves enough of a marketing budget to grow their business, which is why some don’t survive—but an umbrella loyalty program creates an all-inclusive community for everyone involved.

How do these brands get to the point of being brought together?

For each merchant that wants to sign up for the program, they’ll go through an integrative process that gathers sales data, customer information, and purchase history for input and metrics on loyalty campaigns. They are then brought together by being added under the same umbrella (Loyal~n~Save) and exclusively displayed to all users via the mobile app and web. We like to think of our program like a virtual shopping mall. All brands are housed under one roof but ultimately it’s up to the customer to choose where they want to shop.

How many brands are ideal for an umbrella program or is it the more the merrier?

The more merchants participating in Loyal~n~Save the merrier. Our goal is really to build out the program as far as we can. As stated earlier, we like to view ourselves as a virtual shopping mall. Consumers want to choose where they shop no matter where they are, and the more options there are the more likely they are to sign up and use the program. This hunt for savings displayed by the consumer is actually beneficial to participating merchants because in the process, it’s creating brand awareness for their store that the customer may not have discovered otherwise.

What types of results are you seeing with Umbrella programs?

In a case study of one of our participating merchants, Smokers Choice Tobacco Outlets, they saw a significant increase in their member sign-up rate in just a few short months. They’ve also seen members spend four times as much as non-members, increasing their overall engagement and surpassing original expectations.

We’ve also seen a steady increase in merchant inquiries, website visits, social media following, and mobile app downloads. People are curious about Loyal~n~Save, and we welcome any questions, concerns, or suggestions regarding the program.

Are there downsides that need to be considered?

When joining an umbrella loyalty program, all sides need to be considered. At first, business owners may be wary about having multiple brands under the same program. The first thing will be their in-depth look at their competition. Who is it? What are they doing that you’re not? A little competition has always been said to be healthy, but it doesn’t necessarily have to be thought of as a downfall. Your competition will always be competition, but the “umbrella” gives everyone a level playing field through the marketing initiatives of the program. Not to mention your business is displayed to thousands of program members.

Some SMBs may also consider the need to create custom loyalty campaigns. Analyzing consumer data and creating campaigns based off that information may be time consuming or challenging for companies who don’t have the manpower to create them. At Loyal~n~Save, we try and make that part as easy as possible with visualized charts and graphs, and personalized campaign suggestions based off that data. We also have a pretty amazing support staff.

What happens if one brand wants to leave the Umbrella program?

If a brand wants to leave the program, that’s up to them. Loyal~n~Save doesn’t require a contract and is paid on a monthly basis. We understand that an umbrella program isn’t for every business, but we’d also be concerned about a brand’s future loyalty retention after switching their customers to a different platform.

This Q&A was originally published in conjunction with Loyalty360, the association for customer loyalty. It is a follow up to the article, It’s Raining Customers: Why You Need an Umbrella Loyalty Program.