Many loyalty and rewards programs offer their members a range of benefits and rewards that can be earned and/or redeemed with external partners and their products and services.
Adding an external partner and relevant benefits can sometimes be seen to be an easy way to add value to members and often the revenue opportunity can be enticing.
However, just like all benefits in your program’s proposition have been carefully crafted, adding a partner needs even more consideration and planning. They are one-step away from within your direct influence and have their own set of goals and requirements.
(Points programs have a deeper set of requirements if points are sold or redeemed for, which will not be covered here).
Finding the balance
Whichever way you look at your program’s partnership strategy, you need to optimise the balance of:
- Partner benefits that are meaningful to your members and
- The partnership is profitable to your business.
Here are 11 criteria and questions to evaluate the value and viability of adding an external partner to your program’s member proposition.
Meaningful to your members
Start with your member in mind and their view of the value:
- Assess alignment: Assess the relevance and alignment of the partner and their products or services to your program’s current proposition and your members (your view).
- Determine distinctiveness: Is the partner creating or adding distinctiveness to your program’s proposition (your view)?
- Validate alignment and distinctiveness with your members: Is what you believe to be true, actually relevant and in alignment with what your members want or believe to be unique and of value (their view).
- Identify influence on behaviour: Will the partner’s benefits influence a behaviour (redeem or earn) by your members (their view). Identify the likelihood in research, to be validated in reality.
Profitable to your business
Is it a viable partnership? The following criteria focus on the perspective of a program seeking a partner, however they can also be switched to be assessed from your partner’s point of view (what’s in it for them):
- Net new member growth: Is the partner providing a source of new members to your program and if so assess the potential volume
- De-dupe your membership to their customer base (with privacy sensitivity) to identify the net new membership potential.
- Initial integration and ongoing management: What are the integration requirements (level of complexity) and ongoing operational and marketing management including teams to manage the partnership?
- Direct and indirect financial viability: Is there direct revenue gain eg pay to access the membership or pay per lead generated. Is it purely a service to your membership that generates more program engagement and consequently relevant revenue generating behaviours (purchase more, more often)?
- Deliverability at scale: Can the partner’s service/product deliver to the scale of your membership – now vs future?
- Measures of success: How will you measure the success of the partnership? What is the method and frequency of reporting?
- Trust and credibility: A subjective factor, however it needs to be asked. Do you trust your brand and program’s reputation with their brand and reputation?
- Gut-feel: Tap into some sense of intuition to assess whether there is a connection with the people and will your team be able to work with them closely in good times and challenging times?
A partnership for long term mutual benefit is not just set and forget.
Like any aspect of building your program to be a viable business asset, it needs care and commitment and a solid foundation that these 11 criteria will help set up.
Have a happy loyalty day!