A so-called multi-partner loyalty program is a platform solution in which several companies, usually from different sectors, participate. In these multi-partner loyalty programs, several partner companies are bundled together and the bonus program appears with its own independent brand (e.g. PAYBACK, jö, DeutschlandCard).
Customers then collect higher-level points on these platforms, which they can redeem for coupons and discounts - such as Payback points - with the respective partners of the platforms. Important to note: In such a solution, your company is just one of many. This has both advantages and disadvantages. You can find out what these are below.
A stand-alone customer loyalty solution differs from a multi-partner program in that it is individually created and tailored for the company. It appears in the name of your company and you can determine all the content yourself.
The company's "individual presence" strengthens the brand, as customers interact directly with the company. This results in a strong branding effect, which is not very pronounced with multi-partner bonus programs - for example, when you become a Payback partner.
Behind every successful customer loyalty program is a well thought-out strategy. This is the case with multi-partner solutions (such as PAYBACK, often cited as an example below, or the jö-Bonusclub) as well as with in-house solutions. But what are the significant differences that you should look out for when deciding between the two alternatives?
As a DeutschlandCard, jö or PAYBACK partner, you have an existing platform with an existing infrastructure. This means you can simply integrate your company into the existing structures. Implementation is relatively quick, which makes it easier to get started.
With an in-house solution, the company has two different options:
Implementation by a marketing agency or with internal resources (rarely the case) or
Cooperation with a specialized IT service provider.
While the first alternative of setting up a customer loyalty program with the in-house IT department or an agency, as a counterpart to the platform programs, is very time-consuming and resource-intensive, the latter can absolutely keep up with multi-partner solutions in terms of time and costs.
There are no limits to the individualization of features with a proprietary solution, whereas a platform solution specifies certain framework conditions in a previously defined area. There is therefore a clear advantage here for in-house loyalty solutions.
With PAYBACK, jö & Co, the platform itself can be used as a marketing channel. A customer base already exists in the platform program. This allows potential customers to be made aware of offers and possibly become new customers. However, this often requires additional advertising budget and creates competition for customer attention between the partners.
With an in-house solution, extra budget is required for marketing measures in the customer loyalty program. In the long term, these additional costs must also be taken into account when comparing the two alternatives (more on this below in the Costs section).
There are no limits to the advertising possibilities with individual solutions, especially with the very popular gamification elements. Another point in favor of an individual solution is that your company's corporate identity can be incorporated. Be it the app icon on the customer's home screen, which is seen almost every minute, or the naming of bonus points such as McDonald's Ms. If your company becomes a partner of PAYBACK & Co, you are "only" represented in the app with your logo - a much smaller branding effect.
With an individual solution, you can get in touch with your customers directly. This makes it possible to respond to individual needs, wishes and complaints. Loyal customers can be addressed through the collected contact data on various channels - whether via social media, email or newsletter, push messages or even SMS.
This option is only available to a limited extent with platform solutions. It is possible to use various communication options on the platform by purchasing additional services. This means you lose the flexibility you have with an individual solution. You are also heavily dependent on the platform and the other partners.
Customers are very sensitive, especially when it comes to particularly valuable push messages - if too many messages that are not relevant are sent, they are quickly deactivated. In the case of a platform, this deactivation affects all merchants equally. A clear disadvantage in terms of independence.
What is the main reason why you are interested in loyalty programs? Most companies want to collect valuable, high-quality customer data. This enables them to get to know their customers, understand them and provide them with individual support. Only if you know your customers can you adapt your offers, stores and product range to their purchasing and user behavior. Data is collected for both alternatives. The big difference is who manages this data and which data is available to whom.
With a proprietary solution, companies can decide for themselves which data is collected and how it is used. Multi-partner solutions such as PAYBACK, jö or DeutschlandCard do not pass on all data to their partners. For example, they have no influence on how and for what purpose data is collected. Data protection is a particularly important issue when dealing with customer data. When deciding between the two alternatives, you must therefore also consider whether you want to hand over this important issue.
It can be assumed that all platform operators handle customer data in compliance with the GDPR. However, it should not be forgotten that a negative perception of the platform can also have an impact on your own company.
The costs for the implementation and operation of a customer loyalty program vary greatly and depend on various factors. Here is a brief overview:
When introducing a loyalty program, you pay initial, one-off setup costs for both alternatives. With a platform solution, these include the integration of your company into the existing system. An individual solution that is implemented in-house requires the necessary internal resources. In the case of an individual solution in cooperation with a specialized IT service provider, a one-off amount is also charged for the implementation. In the latter two cases, these costs depend very much on the individual scope and functions of the planned loyalty program.
Ongoing fees (recurring):
Both with a platform solution and with individual development with an external partner, ongoing fees are due (e.g. monthly). The amount often depends on the number of customers (not the turnover!) who use the program. In the case of a customer loyalty program that is developed internally, ongoing costs for servers, maintenance and updates are included in the total costs.
Further developments (one-off):
An individual solution offers the opportunity to further develop your own app at any time. Innovations and trends such as gamification can be taken up to make a customer loyalty program attractive in the long term. One-off costs are incurred for these further developments, both internally and when implemented with an external partner.
Marketing activities (one-off/recurring):
The major advantage of an individual solution is that marketing activities such as push messages, automated emails or newsletters can be implemented at any time without additional costs. With a multi-partner program, additional costs are charged for this, which are due on an ongoing or one-off basis depending on the activity.
It is particularly important to consider ALL cost components over a longer period of time. Think about what you want to achieve with your customer loyalty program, how this can be implemented with the alternatives and their framework conditions and which cost components will therefore be particularly relevant.
The more you want to interact with your customers via the loyalty program, the higher the costs for marketing activities will be for a platform program. If you only want to offer customers the opportunity to collect points through purchases and do not otherwise link many marketing activities to the program, the initial setup costs and ongoing fees will be particularly relevant to the decision.
Which of the two alternatives is the right solution for your company depends on your individual needs. The biggest difference: as a partner of PAYBACK, jö, DeutschlandCard & others, the loyalty club is integrated into an existing program, whereas with an individual solution you build up your own community.
The differences mentioned above serve as a decision-making aid for companies that have recognized the relevance of the topic of customer loyalty. Some companies even rely on a mix of both alternatives. H&M is part of the multi-partner bonus program DeutschlandCard. A few years ago, the retail group also introduced its own extremely successful customer loyalty program. Having both may be the right solution for you too.