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Plenti launched in mid-2015 as the first U.S.-based coalition loyalty program, which included several leading brands such as American Express, Macy’s, Rite Aid, AT&T, ExxonMobil, Macy’s, Nationwide, Hulu, Rite Aid, Enterprise Rent-A-Car, Expedia, and Direct Energy.
Plenti, which is run by U.S. Loyalty, a division of American Express, is the first loyalty program of its kind to ever feature such a significant list of widely known top brands in the U.S.
But, some recent developments have placed Plenti’s future in jeopardy: Macy’s launched its new Star Rewards loyalty program and, after Oct. 31, 2017, AT&T will no longer participate in the Plenti program.
Andrew R. Johnson, director of public affairs at American Express Co., sent Loyalty360 the following statement:
“American Express launched Plenti in 2015 in partnership with major brands in a variety of retail categories,” Johnson said. “While Plenti has grown in scale since its launch, a number of factors, including shifting priorities among some founding partners and changing competitive conditions in their industries, have led to recent public announcements from certain founding partners regarding their future loyalty plans. American Express is in confidential discussions with a few remaining Plenti sponsors regarding the future of the program.”
Aside from AT&T, which is exiting the program at the end of October, the remaining Plenti partners are Exxon Mobil, Macy’s, Nationwide, Rite Aid, Chili’s, Expedia, Direct Energy, Enterprise, Hulu, and Southeastern Grocers.
Stellar Loyalty CMO Narina Sippy told Loyalty360 that the concept behind Plenti, which offers a variety of rewards across a network of brands, is a solid one.
“But it runs at odds with modern loyalty and engagement principles,” Sippy explained. “The primary purpose of any brand loyalty program is to establish a personal connection to build lasting, profitable relationships with customers. This is nearly impossible to achieve through a coalition program like Plenti where the brands are part of an umbrella program. Modern programs look at personas, journeys, motivators, and create personalized offers and targeted campaigns to drive behaviors that lead to desired business outcomes.”
Sippy added that other potential barriers to success in a coalition program include technology complexity (e.g. POS integration), mobile app engagement, and customer data sharing.
“Without addressing these aspects, Plenti and other coalition programs face an uphill battle,” she said.
Loyalty360 CEO and CMO Mark Johnson recently weighed in on the news about Macy’s new Star Rewards loyalty program.
“The Plenti coalition loyalty program hasn’t really taken off in the U.S.,” Johnson said. “I don’t think Macy’s would be rolling out a new program if Plenti was that successful. The big challenge with coalition programs is the earn and burn piece. Do you have short-term, mid-term, or long-term redemption options, aspirational value? The biggest problem with coalition loyalty programs is the sharing of access to data. Is it advantageous to Plenti or truly to Macy’s and other entities in it? It may not be going as well as they hoped it would.”
Michela Baxter, senior director of loyalty at HelloWorld, offered her thoughts on the viability of the Plenti coalition loyalty program.
“As we’ve seen in European and Canadian programs, the longevity of coalition models is largely dependent upon frequency drivers like grocery and gas,” Baxter told Loyalty360. “The fragmented nature of both of these categories in the U.S. could be an obstacle to the success of any coalition model here.”
Evan Magliocca, brand marketing manager for Baseman Insights & Marketing, told Loyalty360 that as retail market conditions have shifted and increased urgency, many brands have been doing some internal searching, trying to identify what’s working, what’s important for them, and which programs they can terminate.
“Coalition programs are usually the first programs to go since they don’t have as much brand value as internal programs,” Magliocca said. “There’s also another issue coalition programs face. They’re often clunky or difficult for customers to use—requiring a separate card or to upload a receipt. It’s not much, but it’s just enough of a barrier to entry that customers are less likely to join or to trail off in engagement rather quickly.”
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