Loyalty marketplace- the next big thing
A long-lasting tradition is about to change. It's certainly no secret that loyalty programs are one of the best ways to build and maintain long-term relationships with customers and one of the key driving forces behind a business’ continuity and success.
Whilst on the forefront of customer retention, as well as a priceless source of customer insights, traditional loyalty programs, remain a solid business-to-customer communication of financial incentives for returning purchases, aiming at the same time to establish an emotional connection that drives sales and repeat business.
This seems to change, with tradition giving its place to evolution, as “third-party marketplaces” are coming into the equation, with marketplace loyalty programs integrating sellers or partners in the reward system, in addition to customers.
Why loyalty marketplaces?
Loyalty programs marketplace can take loyalty schemes to the next level, as they create a community for customers and unify the commerce experience for them.
Much more than a single platform selling a single range, marketplaces become the umbrella, taking a commission on every product, without carrying the risk and cost of producing each one. And when loyalty is added to the equation, the benefits are all-encompassing, turning marketplaces into the actual facilitator of a community that cares for its loyal customers, as well as its sellers, that can use this loyalty scheme as their own or even as an add-on to their existing in-house loyalty programs, encouraging their return business while providing access to richer customer data.
In an era when many institutions, from retailers to banks, are pressured to find new means to re-establish customer trust and relationships, the loyalty programs marketplace can be the real game-changer.
How does a loyalty marketplace work?
A loyalty program marketplace, or loyalty scheme coalition, as being introduced by wadata online marketplace, creates a separate reward system for both customers and sellers.
Uber, for example, offers Uber Rewards to customers as a four-tier loyalty program, while drivers benefit from Uber Pro, earning points to access bonuses like car maintenance discounts.
Alternatively, a marketplace can allow sellers to offer their own ‘mini rewards’, as Amazon and Etsy do, engaging sellers while giving them greater control in how they engage with customers on the platform.
Finally, a loyalty program can be targeted at sellers or partners only, where a brand can offer incentives or other benefits like sales training, to strengthen the bonds of those relationships and ensure the marketplace remains a preferred sales channel.
Why is a loyalty coalition the next big thing in the loyalty marketplace?
In a loyalty scheme coalition like wadata, brands come together to achieve their common goal of customer acquisition and retention, sharing resources as a common promotional coin, data collection, and the costs to build and run the program.
Synergising brands’ marketing strengths is an obvious advantage of a loyalty scheme coalition while, combining also brands’ communications assets, can help it cut through the noise, as is the case in cross-promotion opportunities.
Additionally, running a rewards program in a coalition can maximize cross-selling options and customer acquisition possibilities and strengthen brand positioning. Finally, by using shared data for interests and preferences, customer experience can be exponentially improved.
Of course, there is no one-size-fits-all loyalty program, and marketplaces must try out a lot to find out what works the best. They also have to study and adjust to what motivates various consumers i.e. the emotional experience of a loyalty program and their affiliation to a brand or the money-saving possibilities.
And what’s in it for the customer?
There is a higher opportunity to earn rewards for consumers who participate systematically in the loyalty program coalition or marketplace, as the benefits of using multiple partner brands across the network multiply.
With customer experience being more important than ever in 2021, as 34% of customers will stop interacting with companies or brands after a bad experience, loyalty programs coalition can provide the platform to build that exceptional customer experience.
When loyalty programs are integrated into a marketplace solution offering, the benefits are all-embracing. The marketplace owner ultimately benefits by becoming the facilitator of a community that cares for its loyal customer and its sellers, encouraging their return business and providing access to richer customer data.
Does the program have a plan for meeting the needs of the next generation of loyalty?
If most of the answers to these questions are either “no” or “we don’t know”, you might have to consider a plan to renew part or all of your loyalty programs.