In mid-2015, the Plenti coalition loyalty program launched amid considerable fanfare as it marked the first endeavor of its kind in the U.S., harboring hopes of increased customer engagement and customer experience for participating brands.
Plenti launched with nine companies and, by the end of 2016, spanned 13 partners, with 16 brands, placing 71 percent of all U.S. households within five miles of at least two of the 30,000 retail locations participating in the program. The hope of Plenti coalesced in the promise that consumers would be able to earn points through a variety of purchases across numerous industries.
Since that point in Plenti’s brief history in the U.S., several participating brands have opted to leave the coalition:
In October, Macy’s launched its new Star Rewards loyalty program and announced this week it plans to end its participation in the Plenti coalition loyalty program.
Chili’s also announced this week it will exit Plenti; AT&T left Plenti at the end of October.
As of Jan. 1, Direct Energy, Hulu, Nationwide, Enterprise, and Expedia left the Plenti program. Plenti memberships remain active and members can use unexpired points at remaining partners, including Rite Aid, participating Exxon and Mobil gas stations, and Winn Dixie, Bi-Lo, and Harvey’s supermarkets.
Plenti is run by U.S. Loyalty, a division of American Express. Andrew R. Johnson, Director of Public Affairs at American Express Co., told Loyalty360 that “we are in confidential discussions with the remaining Plenti partners about the future of the program.”
So what went wrong with a program full of promise nearly three years ago?
Kyle Davies, VP Global Insights for Bond Brand Loyalty, offered some illuminating thoughts about the demise of the Plenti coalition loyalty program in the U.S.
“The idea of coalition programs—being able to earn and redeem the same currency across multiple merchants—is fantastic, however, consumers have consistently told us that the reality has not lived up to the promise,” Davies explained. “When we look specifically at Aeroplan, Air Miles, and Plenti data from Bond Brand Loyalty’s annual The Loyalty Report, these programs have consistently under-performed versus other programs on a variety of metrics measuring satisfaction, engagement, and stickiness (in many cases generating customer satisfaction levels of less than one-half of the average loyalty program). Customers expect a lot from their loyalty programs; they often expect the kind of earn and burn functionality that coalitions have, but they also expect programs to make it easier to do business, to provide added value as a recognized customer, and to be aligned with their expectations of the brand. It is in these areas related to the member experience that coalitions have struggled immensely, as they can only integrate into a brand experience at the very surface level.”
Brands that run proprietary programs place an emphasis on using the program to learn about their customers and enhance their customer relationships, Davies noted.
“While coalitions remain focused on simply increasing the number of earn occasions—customers tell us this feels way too transactional, and not worth their time,” Davies said. “As long as the coalition business model is focused on only the transaction, we think it will be very difficult for them to compete with programs that are making significant strides to understand their customers, and provide them with personalized, enhanced member and brand experiences.”
Scott Robinson, VP of Design and Strategy for Bond Brand Loyalty, told Loyalty360 that coalition loyalty has not evolved to stay relevant in a landscape of very innovative, very relevant, and highly successful proprietary program formats, nor has it evolved to keep pace with highly complex and ever-changing consumer expectations and needs.
“In 1992 when AirMiles launched in Canada, the coalition loyalty model was somewhat novel and addressed the needs of its partners in a way that partners couldn’t readily address on their own at the time,” Robinson explained. “Fast forward 25 years, today’s coalition programs, including Plenti, still for the most part mimic their predecessors.”
Coalition loyalty’s further demise was recently exacerbated in Canada by AirMiles’ handling of its own points expiry terms and conditions, as well as by Air Canada’s announcement to terminate its agreement with coalition loyalty program Aeroplan in 2020, Robinson noted.
“A loyalty program is an extension of the brand, and in this regard, the role of a loyalty program is to support its brand in delivering on its promise to customers,” Robinson explained. “A successful program is one which drives loyalty to its brand, and not [just] to the program itself. And herein lies coalition loyalty’s inevitable demise: Coalition programs, like Plenti, engender loyalty, not to its partner brands, but rather only to the coalition program itself. A coalition program, because it is structured to serve many brands, is ill-equipped to be differentiating for any one brand. And a successful program must be not only differentiated, it must be differentiating for the brand it serves.”
When customers engage with a brand, Robinson noted, they do so with the intent of fulfilling their own personal needs—which range from product needs, to status needs, to sense of community needs.
“Fulfilling the varied needs of its members is how a loyalty program fulfills its duty of engendering loyalty to the brand,” Robinson added. “And meanwhile, today’s ambitious brands seek a loyalty model that enables them to create engaging, meaningful, brand-aligned, benefits and experiences for their members—with a degree of control not afforded through a coalition model, nor achieved with a unidimensional points-for-purchase coalition value proposition.”