Look Beyond the Superficial - Find Your Perfect Loyalty Partner. Workshop Findings.

Now that the dust has long settled after Loyalty Expo 2010, it is time to take a look at the key findings from Comarch’s workshop “Look Beyond the Superficial – Find Your Perfect Loyalty Partner” led by Marcin Kosciak, Vice President at Comarch Inc. and the expert in loyalty partnerships.

Entering into loyalty partnership has long been an attractive way of building stable and loyal group of profitable customers and, more importantly, improving the profitability of the program. Those partnerships exist in various markets; however a large number never bring the expected results. Why? Let us explain it by rightly comparing loyalty partnerships to simple, real life example of coupling.

Definition of a Partner

What’s a partner? According to Wikipedia, a partner is someone “who shares a common interest or participates in achieving a common goal”. Two or more partners (in case of polygamy) agree to enter a partnership hoping to meet their goals. However, often enough expectations are not met and the partnership ends. What’s the best method to prevent this? Our answer: make the right choice of who to partner with!

Choosing the Right Partner

Consider this: two people, male and female, decide to go out on a date. They speak different language, have no common interests and one of them is about to relocate. What’s the chance of the two becoming a couple? The chance is slight. So if you are looking for a steady partnership chose wisely. Find the right match and don’t count on changing your partner later on. Go on a few dates as is common during courtship. Then, when you get to know each other you can decide about the future. Keep in mind that having a common set of goals is the most important aspect of any relationship. Without common goals, a relationship is weak and destined for failure. So try to picture a perfect partner. What are his/her qualities? Do they match yours? Do you and your partner have a similar idea of how to reach your goals? Would you prefer to marry up or down? Those are things to consider when making a long term partnership decisions.

“Shopping” for a right partner for your loyalty program is a lot like dating. You need to look for 1) affinity with the business that you are considering partnering with; 2) existence of a common set of goals and 3) a similar customer base. However, keep in mind that there is no perfect partner, just an ideal based upon the situation provided. So when making a decision of what company to choose as a partner for your loyalty program, try to weigh all pros and cons and set up clear goals of the partnership (i.e. potential revenue generation, ROI, etc.). Make sure that the partnership is not shallow and just based upon a strong brand or other less important factors.

Securing the partnership

What often happens when two people decide to enter into marriage? They prepare by attending premarital counseling.

The situation is the same with business partnerships. Thus, make appropriate steps to insure a harmonious relationship but prepare a similar pre-partnership analysis before entering into a loyalty partnership. After all you don’t have any guarantee that the “marriage” will go smoothly. We know better that marriages can be rocky and planning ahead will help you be ready for any circumstances.

Exit Strategy

It is important to make backup plans and agreements in case the relationship fails; similar to a prenuptial agreement in a marriage. Reasons for unsuccessful loyalty programs resemble the ones of a real marriage – unmet/wrongly set goals and expectations, miscommunication, unexpected changes in the environment, or diminished relevance of the relationship. For business this can not only mean loss of revenue, but also potentially the full collapse of the entire program if a major player abandons it. This can not only hurt your short term loyalty program stability but also long term as any problems could make future partners more reluctant to join it. Preparing a thorough severance agreement can help insure as many of the risks involved with partnerships can be mitigated without hurting the program.

To summarize, regardless of the type of loyalty program, there must be a right fit between partners in terms of positioning, brand, customers, the offering and most importantly, in setting common goals. Finding this proper fit and taking the proper steps to insure the future wellbeing of the loyalty program can lead to many fruitful partnerships for all parties involved.