How to Use Brand Partnerships to Boost Loyalty Program Engagement

The plethora of brand loyalty programs have led to an engagement challenge for marketers as many customers don’t stay as active members for long after sign-up. Gartner's 2024 Consumer Omnibus Survey found that 79 percent of consumers did not actively use all of the loyalty programs they joined.

In today's competitive market, brand partnerships have emerged as a powerful strategy for organizations aiming to elevate their loyalty program engagement and drive revenue growth. By collaborating with complementary brands, companies can create enriched loyalty experiences that resonate with their target customers.

Such partnerships offer brands a golden opportunity to deepen their connection with customers, leveraging shared data to deliver personalized experiences and foster enduring loyalty. There are three steps leaders should take to understand how to select and implement effective brand partnerships to enhance the loyalty program experience:

1. Scope out potential partnerships and select the right brand partners.

When evaluating potential loyalty program brand partners, the two main elements to consider are customer understanding and experience delivery. Brands must utilize customer understanding assets like personas and journey maps to identify complementary customer needs and expectations. Additionally, understanding the channels customers use to engage with each brand enhances campaign performance and connects customers to the program beyond purchases.

Brands must collaborate to address common customer challenges and position the loyalty program as a solution. Furthermore, the program platform must support partnership efforts, enabling rewards across brands and integrating with existing technologies for personalization and data management.

2. Identify the objectives of your brand partnership.

Investing in loyalty program management necessitates strategic consideration of the objectives that partner brands aim to achieve, as well as the type of partnership that will best fulfill those goals. While it isn't essential for all partner brands to have identical business objectives, it is crucial to ensure alignment on the desired outcomes for everyone involved. This step ensures that the partnership is structured in a way that meets the needs of all partner brands.

To guarantee the program is mutually beneficial, ensure alignment between partner brands regarding how to measure the program’s effectiveness.

Many brands rely solely on transactional metrics (e.g., purchase frequency, application downloads and repeat orders) to determine loyalty program success, rather than combining those transactional metrics with attitudinal metrics (e.g., customer satisfaction, customer referrals and customer preference). Brands should measure both transactional and attitudinal metrics to ensure program effectiveness.

3. Define overlapping experiences in the customer journey when interacting with the loyalty program.

Grasping how customers engage with individual loyalty programs throughout their journeys is vital for assessing the potential effectiveness of a brand partnership. By exploring overlapping interactions within the customer journey and evaluating how the loyalty program enhances the customer experience, brands can pinpoint engagement strategies to consider when crafting a joint program.

Consider how the loyalty program supports customers across their end-to-end journey and its role in facilitating journey progression. For example, in the “buy” stage of the customer journey, the loyalty program may be used to obtain net-new customers by providing a discount on their first purchase.

Line up all partner brands’ journey maps to evaluate if there are a sufficient number (three is an ideal minimum) of overlapping touchpoints for target customer groups to clearly identify potential synergies.

Brand partnerships can be a great way to enhance how customers engage with loyalty programs, however, these partnerships require careful planning. By following these steps, retail leaders can set up loyalty program brand partnerships for success.

Brad Jashinsky is a director analyst in the Gartner Marketing Practice.