Forming effective partnerships in support of customer loyalty programs and efforts involves an alignment of objectives and clarity of the benefits of the partnership. Partnership success hinges on a planful approach and adherence to the steps a brand outlines in advance. If the right partners are engaged, loyalty and rewards program members will welcome them, finding and enjoying enhanced value.
In Loyalty360’s Brand Marketer Research: 2024 State of Customer Loyalty report, when marketers were asked what enhancements their brands were most interested in, 57% indicated brand-to-brand partnerships. Because of the “sea of sameness” that permeates the customer loyalty landscape, brands seek partners—as well as platforms and new strategies—that can increase member engagement. Forming the right partnerships(s) can help a brand differentiate.
Loyalty360 spoke with supplier members and loyalty strategy experts about some of the more pressing points around brand-to-brand partnerships, including establishing the criteria to use when forming them, what key elements should be in place, and the power of “unlikely partnerships.”
Article contributors:
• Jennifer Gibbs, SVP, Client Partnership, Ansira
• Patricia Colard, Senior Innovation & Strategy Director, Bond
• Gregg McMullen, Global Head of Partnerships, Capillary
• Chris Barnett, VP, Strategic Consulting, Kobie
Beginning the Process
Many brands recognize that meaningful brand-to-brand partnerships can enhance the customer experience for their loyalty program members. As brands start the discovery process—e.g., determining what type of partnership to form, goals of the partnership, possible brands to partner with, etc.—they need to consider established internal questions before starting a conversation with a possible partner. Furthermore, brands must determine what teams and stakeholders should be involved from the onset of the process.
Before connecting with potential partners, Capillary’s McMullen affirms that brands need to identify their own strategic goals and how partnering will enhance their loyalty program and customer experience. Brands should ask whether the partner aligns with the brand’s values and integrity.
“It can also be beneficial if the partner has an overlap with the brand’s customer base,” says McMullen.
Parkland is an international fuel distributor, convenience retailer, and fuel supply and refinery company operating in 23 countries. From a loyalty perspective, the Canadian market is the most established and mature for the brand. Parkland formed a partnership with Air Canada’s Aeroplan® at the end of 2023. Aeroplan is the most established airline program in Canada and one of the biggest programs in the country with the largest membership.
“The mutual benefit and the lack of one program pushing ahead of the other—which you see frequently in loyalty partnerships where one program overreaches the other—have added to the partnership’s success,” says Michael McDowell, Vice President of Loyalty and Partnerships at Parkland, when speaking about the partnership. “The synergies between our operations and the marketing muscles that both of us are flexing promote both of our programs equally.”
Another key area that should be considered is what success metrics will be planned, potential ROI, and the ability for data sharing between the brands. Ansira’s Gibbs offers the following list of questions for brands to consider when planning to form strategic partnerships:
• What are the key objectives of the partnership?
o Increase loyalty membership?
o Enhance the overall customer experience?
o Acquisition of consumer data?
o Diversify the brand in a crowded marketplace?
o Drive revenue or create a source of revenue?
• What is my budget to invest in the partnership?
• How are my existing partnerships (if applicable) performing?
• How flexible is my current tech stack?
To this list, Kobie’s Barnett adds:
• What specific value can we offer to a partner’s customers?
• How does this partnership align with our brand values and long-term strategy?
• What resources can we commit to this partnership?
• How will we measure success?
“Additionally, they should consider their target demographics, potential conflicts with existing partnerships, and how the collaboration might impact their program and brand perception,” says Barnett.
For Barnett, key stakeholders to involve from the beginning of the process should include representatives from marketing, CX, legal, finance, operations, and analytics. Engagement of the loyalty lead and executive stakeholders ensures alignment with overall business objectives and provides necessary approvals.
Gibbs also sees executive sponsors and loyalty/partnership managers as key stakeholders to engage in the process. Similar to the teams Barnett suggested, she lists members from strategy/customer experience, data science and insights, marketing technology, and marketing communications as people to be involved. McMullen recommends many of the same as the other experts and adds the product team to the list.
Determining Criteria
Once internal teams and strategies are aligned, organizations must establish criteria to adhere to when vetting potential partners and prior to engaging the other brand.
“When brands are vetting potential partners, focusing on an alignment of values, brand identity, and shared customer segments will help ensure a smoother integration of loyalty offerings,” says McMullen, noting that it’s also important to understand the partner’s technology to avoid any cost or timely integration issues.
He adds that both brands should work toward measurable value, whether through data sharing, expanded customer reach, or increased engagement. Brand reputation also plays a critical role, as partnering with a reputable brand helps maintain loyalty member confidence. McMullen believes that by addressing these early, brands can enter negotiations with a better strategy and plan.
“At Ansira, we approach partnership vetting with a data-driven methodology,” says Gibbs.
Ansira has developed a comprehensive scorecard—a strategic tool that provides a holistic evaluation of each potential partner. The scorecard considers multiple critical factors, ensuring that the Ansira team makes informed choices that align perfectly with a brand’s vision and objectives. The factors include audience alignment, partner brand health, brand pillar alignment, operational impacts, and technology integration efforts, as well as ease of deal conversion.
John Sellers is Head of Rewards at Bank of America and joined the “Maximizing Customer Loyalty through Brand Partnerships” brand panel at Loyalty360’s 2024 Loyalty Expo. Bank of America has a formal process in place for vetting partnership opportunities.
“Becoming a partner of Bank of America is not easy. There is a ton of onboarding, GIS, and privacy issues,” says Sellers, confirming that the process takes a long time.
Bank of America uses internal scorecards and looks at public, independently valid financial statements to understand the “health” of potential partners. This is something the brand does on an ongoing basis, as things can change.
Kobie also maintains a formal evaluation process that assesses potential partner brands across key categories to ensure clients get loyalty partnerships right.
Barnett lists these criteria. “During the vetting process, brands should consider topics like brand alignment and cultural fit, presence of complementary offerings, level of customer overlap, partner financial stability, tech capabilities, market presence, regulatory limitations, existing partnerships, and growth potential.”
Integrating Technologies Successfully
Technology plays a pivotal role in brand-to-brand partnerships, yet integrating technologies can be a real challenge, possibly halting the partnership before it gets past discussion. Loyalty360 asked its panel of experts how brands might approach and surmount integration challenges.
For McMullen, overcoming tech challenges in brand-to-brand partnerships requires brands to begin with a thorough understanding of the tech platforms and ecosystem. Leveraging platforms that are scalable, modular, and have strong integration capabilities can minimize risk to long-term program growth. It is also helpful to work with technology platforms and service organizations that can bring flexibility to adding new third-party features, data, and insights without the need for deep integrations.
“A loyalty technology platform that includes a strong API and integration network can help address these issues early in the process and set up long-term success,” says McMullen.
Barnett also emphasizes conducting comprehensive tech assessments. He also suggests embracing flexible solutions such as APIs and cloud platforms.
“A phased approach, coupled with ongoing IT team communication, is crucial,” says Barnett. “When deep integration isn’t viable, smart alternatives can still yield valuable insights.”
One effective method involves creating immersive or gamified experiences through loyalty or third-party platforms, generating zero-party data. Barnett points out that with numerous options available, the key is striking a balance between valuable data collection, technical constraints, and privacy considerations, paving the way for a smooth partnership progression.
Key Elements Foster Partnership Success
In successful brand partnerships, certain key elements are often in place—or implemented—to ensure a seamless experience for loyalty program members of both brands.
The team at Kobie knows that those successful brand partnerships in loyalty programs often hinge on seamless integration, clear communication, and enhanced value for members. Key elements typically include a unified redemption process, consistent branding, shared customer service, and data synchronization. Changes are usually communicated through multi-channel approaches, and satisfaction is commonly measured through embedded feedback loops and impact analysis.
“Notable examples are the partnerships between Delta SkyMiles and Starbucks or Amazon and Grubhub,” says Barnett. “These partnerships demonstrated how brands can extend their loyalty programs into complementary services, providing added value to members while expanding their reach.”
Cost and Potential ROI
The cost of new perks or enhanced benefits must be weighed against potential ROI (forecasting), and funding must be determined in advance. Additionally, both brands can benefit in scenarios where one partner is primarily funding the enhancement(s) or promotion(s).
In loyalty partnerships, Barnett believes asymmetrical funding can still yield mutual benefits, citing the Amazon-Grubhub collaboration as a prime example. “
“By offering Grubhub+ subscriptions to Prime members, Amazon enhanced its value proposition while Grubhub gained access to a vast customer base,” explains Barnett. This strategic alliance drove engagement and growth for both brands.”
Successful partnerships leverage each party’s unique strengths, creating synergies that exceed initial investments. Barnett reminds brands that the focus should be on long-term value creation, leading to improved customer acquisition, engagement, and retention for both entities.
Michael Peters, Director of Corporate Partnerships at Kampgrounds of America (KOA), advises brand marketers and loyalty professionals to get out of the office—out of the business side of things and look at it from a much more granular customer-centric perspective. He explains marketers would benefit from thinking about partnerships through the lens of a customer.
“When we think about a customer loyalty program and brand partnerships, how do we step back and see what customers want? What do they care about?” Peters asks. “What are their fears? What are their hangups, pain points, and stressors? Is it inflation and the economy? What’s going to make customers’ lives easier, more efficient, and better in the long run?”
Bond’s Colard also stresses that financial considerations, such as the cost of new loyalty benefits versus potential ROI, must be meticulously evaluated.
“In scenarios where one partner primarily funds enhancements, both brands can benefit through negotiated terms that offer equitable value, such as media exposure or customer acquisition rights,” says Colard.
Unlikely Brand Partnerships Can Generate Excitement
Certain brands/industries make attractive partners (banks, travel, hospitality, groceries, fuel, etc.). However, some brands may fall further outside a “natural fit” and must develop ways in which they might bring excitement and enhancement to a partnership and showcase those key points in the marketplace.
Companies can forge successful partnerships with unlikely brands and achieve success through many avenues, according to Gibbs, such as sharing values on a specific cause or creating a unique product or experience.
“While not a typical partnership, Target and Stanley’s collaboration is a successful example of how brands can work together to create unique and desirable products for consumers,” offers Gibbs. “Target has collaborated with Stanley to offer unique cups, including special colors, collections designed with specific designers, and limited-edition releases. These have been very popular, with some collections selling out quickly and creating buzz on social and traditional media channels.”
Indeed, the buzz has been massive, causing long lines outside of Target, as reported by TikTokers on days a new Stanley is released. Through this partnership, Target has been able to offer exclusive products that generate buzz, and Stanley has gained access to Target’s wide customer base.
Colard notes that brands outside traditional partnership categories can still create exciting collaborations by leveraging their unique value propositions. She nods to lululemon’s introduction of Partner Perks, which offers exclusive benefits from well-known brands like Oura and SweetGreen.
“By broadening the scope of its rewards program, lululemon positions itself as a central hub for a healthy, active lifestyle,” says Colard. “Similarly, Google’s partnership with Peloton allows Fitbit users to access Peloton’s workout classes through the Fitbit app, enhancing the fitness experience for both sets of users.”
In recent years, Kobie has seen some truly innovative loyalty partnerships that break the mold of traditional collaborations. A standout example might include the Marriott-NFL partnership.
“These kinds of partnerships demonstrate how brands from diverse industries can create compelling loyalty offerings by tapping into members’ broader interests and lifestyles,” finishes Barnett. “They show how programs can creatively extend far beyond their core services, offering unexpected and highly valued benefits to members.”
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