Sleek CX and big advertising budgets don’t trump everyday coverage for consumers
By Bill Hanifin
Based on the accumulated body of news and announcements about the Plenti loyalty program, there is shared opinion in the loyalty marketing industry that the program is destined to close sometime during 2018. This may or may not be true, but as is easy to observe these days, a groundswell of opinion on a certain subject can hasten an outcome that otherwise might linger into the future.
The groundswell of negative opinion about Plenti is not without foundation. ATT withdrew from the program during 2017, while Macy’s seems to be focusing more on its Star Rewards program. As the Plenti website informs its members, effective January 1, 2018, Nationwide, Enterprise, Alamo and National, Direct Energy, Expedia, Hulu, and Local Dining no longer participate in Plenti.
Despite the defections, there remains a strong set of core partners including Exxon Mobil, Rite Aid, and Chili’s. During 2017, Plenti had a big win when it added Southeastern grocer brands Winn Dixie and BI-LO supermarkets. And yes, Macy’s remains an important player despite its relaunch of Star Rewards.
The “shared opinion” I refer to is very much the amalgamated scuttlebutt of industry insiders. People active in various aspects of the loyalty industry connect the dots from a multitude of anecdotal stories and “shared opinion” evolves. But industry insiders are missing out on one key point: that at least two multi-partner “coalition” programs are operating successfully in the US today.
- KickBack Points supports over 800 retailers and more than 12 million members as a multi-merchant program focused on convenience and fuel retailers
- Fuel Rewards®, also focused on the convenience and fuel retail sector, has been a big success, reaching 12 million members in just 5 years.
The success of these two programs stands as solid evidence that coalition loyalty can succeed in the US. What then is the real reason behind the struggle at Plenti?
To find the answer, I had to remove my loyalty practitioner’s hat and look at Plenti from the member’s point of view. I normally join and participate in every loyalty program I can find in order to learn what works and what doesn’t. When I received an email from Plenti in late 2017 informing me that the points I had earned were expiring soon, I realized that I had not paid much attention to Plenti.
The reason was easy to identify. In the Southeastern US, Florida specifically, Macy’s are prevalent, Rite Aid has few stores, and unfortunately the Exxon Mobil stations in the area do not compete well with the new installations from Cumberland Farms, RaceTrac, and WAWA. The principal way I had earned points in the Plenti was through my existing ATT wireless account. That interaction resulted in no behavior change with ATT nor interest in companion brands in Plenti, as points were earned for my existing account. To earn those Plenti points, I had to do exactly ……. nothing.
In the course of some travel during the final months of 2017, I made purchases at Rite Aid stores in California and New York. In both cases, the cashiers advised that I had Plenti points available for redemption and asked me if I wanted to redeem them at the point-of-sale. Had I been able to remember my PIN, I would have happily redeemed those points. These experiences were bittersweet as the customer experience with the cashier and the effective implementation of the underlying point-of-sale technology permitting me to use points like cash was impressive. My lack of engagement with the program was the root cause of not remembering my PIN, so upon return home, I made the necessary phone calls to recover that essential bit of information.
With PIN in hand (or in my head) I set out for the “ultimate” experiment. I attempted to redeem Plenti points for free gas at the one Mobil station I could find in my area. My first experience was smooth as silk and after entering my phone number and PIN at the pump, I was able to redeem points for $25 of free gas. One week later I made a follow up visit to get more free fuel, but the pump did not cooperate, and the cashier inside could only help me redeem if I had my plastic membership card.
My recent interactions with Plenti helped me crystallize the challenges the program faces:
It is nearly impossible to assemble a group of notable brands with nationwide coverage in the US. Gas, Pharmacy, and Grocery are all highly regional. Airlines have geographic concentrations as do retailers. Plenti is fighting to overcome a natural obstacle that it cannot solve by itself.
Consistency of experience among partners is a must for the program to succeed. The Loyalty Academy teaches a tenet of loyalty best practice that a program cannot overcome fundamental business flaws. When I redeemed my points for free gas at Mobil in my area, there was nothing else about that experience that made me want to return to that station. The footprint was outdated, and gas prices were $.20 or more higher than competitors in the area. My $25 of free gas was worth about $19 as I paid a much higher price for fuel than I would have at my normal outlet.
The Coalition loyalty model can succeed in the US, but only on a “main street” level. KickBack and Fuel Rewards have been successful due to their industry focus and ability to deliver a consistent experience across participating retailers. It could be that the Loyalty Revolution in coalition loyalty marketing will be heard at the grass roots level. Stay tuned.
Bill Hanifin is COO at The Wise Marketer and is a Certified Loyalty Marketing Professional (CLMP).
ABOUT KICKBACK POINTS
KickBack Points, LLC was formed in 1999 as a means to help retailers compete against larger, more aggressive competitors. It was determined that through loyalty marketing, they would be able to recognize and reward their best consumers and protect their market share from attrition. KickBack’s innovative solutions and unique approach to loyalty marketing quickly provided results for these retailers which included higher customer frequency, higher ticket averages, and a mitigating of consumer defection. Today, KickBack Points provides programs to more than 2,000 companies and is the largest coalition loyalty program in the United States as well as companies in Canada. KickBack Points holds religiously to its prime mission, and that is to “make good customers better” for their clients.