Collaboration not competition: Unlocking more power in loyalty

Loyalty’s programme’s popularity is on the rise. It offers more opportunities, including increased customer value, improved retention through personalised rewards and an easier way to access first-party data directly from customers’ shopping habits. 

However, loyalty programmes can sometimes get less traction in industries that have a low purchase frequency. Travel is a good example: infrequent travellers may not always make the most of loyalty programmes because they don’t travel enough to get the same value as frequent travellers.

What’s more, businesses such as hotel chains, car rental operators, airlines and restaurant chains often establish programmes of their own without considering how much more value they might add if they were part of something bigger.

At Nectar, we believe collaboration is the key to making loyalty work for everyone. Partnering with companies who sell regularly but perhaps not often, and putting them in a programme among brands that generate frequent everyday purchases, gives consumers the ability to collect at more locations on a more regular basis, offering greater value to both customers and brands.

The British Airways frequent flyer programme, Avios, is a prime example. In isolation, Avios points might be of particular interest to frequent travellers, who only represent a portion of the market. But through Avios’s collaboration with Nectar, travellers are able to use points from their spending with other Nectar partners to pay for their future travel with British Airways and vice versa, giving them more bang for their buck. 

This type of collaboration creates deeper opportunities for brands and can extend across industries beyond retail, broadening the reach, profile and redemption opportunities of all those involved.

1. Boosting customer value and engagement – By sharing a programme with businesses across a range of industries, you offer up more opportunities for customers to earn and redeem points. 
2. Customer retention – With a variety of opportunities for collection and redemption, customers’ points hold more value and maintain customer engagement. 
3. Filling the gaps: By combining several loyalty schemes together, the benefits of each can complement each other and further enhance the customer experience. 

In short, companies that operate a loyalty scheme should give serious thought to partnering with a broader loyalty programme to unlock even more value.