Brands: Can you borrow loyalty?

Loyalty programs are growing in popularity across the retail spectrum. Whether online or offline consumers are looking for ways to earn points and save money. But, can a retailer who doesn't have a loyalty program of their own borrow the loyalty of other shoppers?

by Kristina Knight

Kristina: What is "leveraged loyalty"?

Christopher Barnard, president of Points: "Leveraged loyalty" is a strategy by which merchants reward their customers with loyalty currency from other well-known loyalty programs, rather than spending scarce resources developing their own. For example, with the Points Loyalty Wallet, merchants can purchase points and miles from globally recognized loyalty programs such as Southwest Airlines Rapid Rewards, Speedway Rewards and InterContinental Hotels Group Rewards Club and award them to customers, clients, prospects -- even to employees or donors -- as an incentive or reward for their patronage.

Kristina: How can brands leverage another brand's program and yet still create engaged and loyal customers?

Christopher: Just because a brand is "leveraging" loyalty from other programs, it doesn't mean they aren't offering discounts and rewards from their own brand as well. But for many businesses, loyalty programs are expensive and time-consuming, and it's difficult to compete with well-known loyalty programs that are already highly valued by consumers and generate a lot of activity. So while it may seem counterintuitive to offer rewards in other programs, this strategy gives existing customers even greater incentive to engage with a brand as they're able to collect rewards in programs they already collect in. In addition, partnering up with an existing loyalty program allows merchants to increase their loyalty distribution to new customers.

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Tags: leveraged loyalty, loyalty marketing, loyalty program tips, loyalty program trends, Points