Multi-Brand Loyalty Programs Combine Existing Programs To Drive Business

Multi-Brand Loyalty Programs Combine Existing Programs To Drive Business

The emergence of multi-brand franchising conglomerates has created a wide range of economies of scale for companies that have found diversification a key to their growth strategy. Smart companies are leveraging those economies of scale with internal resources, corporate staff, better vendor buy rates, and so much more.

Although there are many opportunities to reduce costs, the nature of the business model also creates opportunities for increased sales and customer retention -- especially when the franchisor has a number of brands in compatible verticals. Multi-brand customer loyalty creates a great way for franchisees to cross-pollinate customers and grow revenues.

A multi-brand customer loyalty platform provides an incredible opportunity to enhance the value of your existing customer loyalty program and share the customers' love (and wallet) across non-competing brands. And whether your business is in the restaurant, service, salon, automotive, or other vertical, there likely is an opportunity to create a cross-branded loyalty program.

For example, say you're a flooring business franchisee of a multi-brand service franchisor - flooring, house painting, and window coverings - each with a significant database of happy customers. Wouldn't it be fantastic if you could gain referrals from your sister brands? And doesn't it make great sense to keep business "in the family," instead of letting it go to local competitors? If the three brands were part of a multi-brand loyalty program, customers, franchisees, and the franchisor would all win.

Implementing a multi-brand loyalty program provides a foundation for referrals that allow a customer to use the rewards earned from one or more of the sister brands to save money on your services. And from a business perspective, as long as that savings remains under or close to your average cost per new customer, why wouldn't you support such a loyalty program?

Structure and redemption

One of the biggest challenges with multi-brand loyalty is developing a rewards structure that franchisees of all the brands will accept, while also making the rewards valuable to the customer. As noted above, your new customer acquisition cost is one of the best starting points for determining how much in rewards a customer should receive, and what those rewards could be redeemed for from a sister brand.

Restaurant multi-brand franchisors (especially QSR) typically can develop a rewards structure that works well across all brands, while other verticals need to get a little more creative. Depending on variables such as average check and frequency, rewards may have to be structured uniquely to each brand.

Good for franchisees?

The notion of multi-brand loyalty is an attractive one for most multi-brand franchise conglomerates. However, is it good for the franchisees? In most cases the answer is yes, because it makes great sense to leverage the customer goodwill of one brand to generate business for another. Even if you are the franchisee of the flagship brand in the multi-unit franchisor's portfolio, multi-brand loyalty is a great long-term strategy and can generate some of your strongest referrals. Once the program is structured and operating, customers can be cross-marketed (in good taste) and new business will come your way.

Launching a multi-brand customer loyalty program takes commitment from the top down, where loyalty isn't just a strategy but part of the culture. As a franchisee, your success will come from your front line with their ability to register new members and provide an outstanding customer experience. Customer loyalty, especially multi-brand loyalty, allows you to give your customers more value from their relationship with you. Customers appreciate when you have their best interests at heart, even if it benefits you.

Invaluable data source

Loyalty platforms by nature provide great insight into customer performance. Most loyalty platforms have comprehensive dashboards and easy access to reports that provide metrics on customers, franchise units, and system-wide data. What's best about the metrics you'll gain through loyalty programs is the ability it provides your business to market more effectively, boost ROI, and drive real revenue growth. The customer data acquired will help you understand customer frequency, average spend, and more.

Multi-brand customer loyalty opens the door to cross-brand marketing like never before. Customer loyalty members have opted into your marketing and typically have a higher response rate than those who haven't. You've earned their trust and your communications are valued. Cross-promoting complementary brands to your most loyal customers makes great sense and can deliver new customers to each of the brands.

Where do you go from here?

The growth of multi-brand franchise conglomerates has opened the door to bigger and better loyalty programs. Sure there are complications when merging different brands into a single loyalty program, but the benefits can be huge for all those who participate. There are always integration and technical issues, but we can leave that up to the franchisor's CIO and the loyalty vendors to figure out.

There are always a handful of franchisees who resist change, but with the right people championing the program you can persevere and succeed. Lead the movement in your franchise organization to create better relationships with fellow franchisees and their customers. Share the "love" and see revenues climb.

Marty Greenbaum is president and senior strategist of FPN Loyalty, a marketing technology company serving the franchise community with customer loyalty solutions. Contact him at marty@fpnloyalty.com or 702-580-0663.

Published: March 26th, 2018

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