Loyalty Programs: Branded vs. Network

Loyalty Programs: Branded vs. Network

Loyalty Programs: Branded vs. Network

Customer loyalty programs, such as punchcards or rewards points, have made an almost universal transition from physical cards to digital applications. As such, they’ve seen a huge spike in popularity, giving rise to a large number of loyalty ‘networks’ like Flok, Five Stars, and Belly. These networks aren’t inherently bad, and can, in fact, increase loyalty. But there are some serious downsides you might want to consider before hitching your loyalty star to their wagon.

Comparison Shopping

In a network, your loyalty program is just one of many. Network members frequently compare programs to see which one is offering the highest discount on similar products. If a competitor advertises a lower price, you could lose customers to them.
Your loyalty program should be a way to encourage your customers’ loyalty. It shouldn’t be just another one-of-many-offers where they’ll jump ship as soon as a better offer shows up on their screen. And, when you’re promoting that network, you’re the one who’s directing them straight to all those other offers.

You’re Promoting Your Competition

Every time you tell a customer to participate in a network loyalty program, you’re also giving potential exposure to any competitors who are also participating in the network. You tell your customer to join, and they do… It’s only natural that they would browse the other offers in a network they just joined. Now they’re seeing ads for other businesses they might not have ever seen had you not suggested they join that network!

You’re Building Their Brand – Not Yours

Put simply, “Join our loyalty program on XYZ Network” does a whole lot of absolutely nothing to build recognition for any brand other than XYZ Network’s.
Loyalty programs are meant to build loyalty for your brand. Networks totally steal your thunder by placing their brand first and foremost. They foster loyalty for their brand, not yours. How else are they going to build their network?

Branded Loyalty Programs

By comparison, having your own stand-alone loyalty program builds your own brand exclusively. It promotes loyalty for your business rather than someone else’. And there’s no chance of your customers finding your competition inside your own loyalty app!

The only con to your own loyalty app is that you’re not going to expose yourself to any of the traffic the network might generate. You’re not seen by the members of their network who aren’t your customers. If you’re suffering from a fear of losing that minor potential, by all means, join that network for the slight bump in visibility. Use it to supplement your own program. But don’t list any offers that are better than the offers on your in-house, branded program. And don’t actively promote it to your existing customers. You’ll probably find that it’s not worth it compared to the ROI from your in-house programs.

Branded loyalty rewards programs can be stand alone punchcard apps, counter-top tablet apps, or integrated within your own full-featured smartphone app. They are surprisingly affordable – often costing less than the network programs. Contact us today to learn about the impressive ROI loyalty apps from ICBM Mobile and Web Solutions can provide your business.

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