The Magic Of Multi-Link
Everybody loves a loyalty scheme, but they love loyalty schemes that span multiple brands even more. These “multi-link” schemes are a growing phenomenon, underpinned by the notion that if you expand the opportunities to earn points or rewards, you expand your customers’ loyalty too.
According to Zandile Manana, Edcon divisional executive of loyalty and reward programmes, the benefits of having a multi-partner loyalty programme include gaining access to a wider base of potential customers, marketing across more channels, gaining a comprehensive understanding of your customers and being able to offer customers a variety of rewards to keep them happy and engaged.
“Customers benefit through increased flexibility in how points are earned and redeemed. Our research shows that customers want a rewards programme that allows them to shop at many stores versus a single branded store,” Manana says. “We believe that a more useful loyalty programme for the customer is one that offers them a loyalty currency they desire. That is why it’s prudent for brands to embrace a collaborative loyalty eco-system.”
The Edcon Thank U scheme allows members to earn points when swiping their cards at 21 different brand outlets, including Engen, Dream Nails, Intercape, Mango Airlines, Planet Fitness, Specsavers, Ticketpro and Torga Optical.
It’s important for companies to partner with the right brands to create synergies for customers. The Clicks ClubCard, although not a true multi-link loyalty scheme, does allow members to earn points at various partners and not just Clicks stores. Cardholders can earn points at Shell, Sorbet, Spec-Savers or Execuspecs, City Lodge, Courtyard or Town Lodge, Netflorist and Europcar. They can also earn additional points if they are Discovery Vitality Members.
“Clicks ClubCard members are able to earn points or benefits outside of Clicks and these points become cashback. Cashback can be used to pay for purchases at Clicks, Claire’s and The Body Shop,” says Susann Caminada, an official spokesperson for Clicks.
She adds that partners are carefully selected to provide additional benefits to Clicks’s customers and must fit within the company’s brand strategy.
The Sanlam Reality programme is open to members of Sanlam, Glacier, Santam, Bonitas, Fedhealth, Nedgroup Medical Aid Scheme and Barloworld. The scheme gives special offers on selected Sanlam products, allows members to save money on wellness, travel and entertainment, and be rewarded for financially responsible behaviour by earning tier points.
André Larisma, chief executive of Sanlam Reality, says its partners benefit from their association with the programme. “Ideal partners offer great stand-alone products and are willing to commit commercially and strategically. We in turn need to help them grow their business within our base,” he says.
Riding out the risks
Are there risks to a multi-link scheme? There’s little contemporary research on the effects on customer loyalty of multi-partner schemes compared with single-partner schemes. American Express published a report last year that suggested customers prefer the choice multi-partner schemes offer, but a paper published by the Academy of Marketing Science in 2011 found that customers differentiate between loyalty to a scheme and loyalty to a vendor. It raised concerns for partners who enter into multi-link schemes which also feature competitors – consumers might feel more loyalty to the reward card than the stores involved and spread their spending between partners.
Edcon’s Manana admits there can be challenges, but believes they can be overcome. “There may be some drawbacks to having a multi-partner loyalty scheme when there is no benefit from cross-promotion and combined deals and when the increased value of multiple incentives does not attract new customers,” he says.
According to Larisma, companies who have got it wrong have learnt costly lessons. “If you can get the mix right, whereby your members, benefit partners and business stakeholders all benefit through your platform, it can be very rewarding,” he says.