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Many loyalty vendors offer a shared rewards network where customers can shop at various retailers across the state/province, or even throughout the country. Customers earn and redeem points at participating merchants. The more retailers that join this type of program, the more attractive it looks to customers. This sounds great but there are some disadvantages to these shared loyalty programs across unlimited retailers where the customer is often loyal to the program, but not to each retailer.

You’re not getting a competitive advantage

You have no control over which merchants participate in the shared loyalty program. If you own a bakery in a small town and share a coalition rewards program with two other bakery shops down the street, what incentive do customers have to visit? They’re going to earn points no matter which bakery they choose so they may not perceive any added value at your location. If there’s no added value, does it make sense to offer a rewards program at all?   

Solution: Standalone loyalty programs allow you to incentivize customers for shopping with your business. You’re not paying for a program where your customers can earn discounts at your competitors. Implementing your own customer loyalty program allows you to customize exactly how you want to reward your customers, providing you with a greater degree of control.

You may be receiving limited customer data

One of the greatest benefits of having a rewards program is that you can collect valuable profile and purchase behavior data to better understand your customers and communicate effectively with them. With a third party shared rewards network program, the customer data typically belongs to them and you have little or no control over what data you can collect. The lack of customer data means you may not be able to send your customers interesting info or specials that they care about.

Solution: Managing your own customer loyalty system should allow you to collect any specific data you want for the customer profile and also their purchase/activity. You’ll be able to go beyond name, email, and phone number to grab essential details. For example, if you own a pet shop, it may be important to you to know what type of dog your customer has and even the dog’s name so you can suggest products that would be beneficial and even personalize the communication, “Hi Jane, we just received these warm doggie sweaters that we think Buster will love...” 

Can Coalition Programs Work?

Coalition programs across multiple merchants can be great such as a “Buy Local” program where you can work with local retailers to offer incentives to customers in your community. If you’re considering a coalition program, you may want to ensure that the list of participating retailers will not become over-saturated with competing businesses. A bakery, restaurant, pet shop, and clothing store will be able to provide many incentives for customers together without feeling like they’re competing with each other. Also ensure that you can customize your program to collect the data that you want in order to make the program effective for your business. 

Implementing your own standalone loyalty program

If you’re leaning towards owning your own customer loyalty program for your business, you may want to check out Loyalty Gator’s flexible loyalty programs to identify different ways you can reward your customers. The easy-to-use platform allows you to collect all the important customer data you need (such as their pet's name, diet preference, or favorite promotions) to learn more about your customers and communicate effectively. Plus, your customer data is always yours and you don't have to share with your competition.