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#475: Challenge of Partnerships | Loyalty360 Leaders in Customer Loyalty: The CEO's Desk

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In this episode of The CEO’s Desk, Loyalty360 CEO Mark Johnson shares insights on the evolving role of brand partnerships in customer loyalty. From high-profile collaborations like Ulta & Target to innovative programs from MGM, JetBlue, and Walmart, Mark unpacks what’s working, what’s not, and how brands can evaluate partnerships for true mutual value. Discover the biggest challenges—technology integration, co-marketing, ROI alignment—and hear predictions for how partnerships will shape loyalty strategies in 2025 and beyond.

Speaker 1:

Hi everyone. This is Ethan Perry from Loyalty360, welcoming you back to our next episode of the CEO's Desk, our podcast episode, where we hear about the latest and greatest insights in customer loyalty from the one man who hears it all Loyalty360 CEO, mark Johnson. Welcome, mark, glad you could be here again to give us your big picture view on everything loyalty. Looking forward to the discussion, thank you. So today we're going to, I guess, revisit or, you know, continue the conversation about partnerships. It seems like it's something that never really leaves the top concerns of loyalty marketers and and everyone in the space here. We've heard from many of our brand members, and even in our latest state of customer loyalty research, that their approach to brand partnerships has evolved over the past couple of years. From your perspective, how critical are external partnerships in helping brands evolve their loyalty strategies in 2025 and beyond?

Speaker 2:

Partnerships are an area that brands have pretty significant interest in, but it's definitely fallen a little bit in both a qualitative and quantitative perspective. We saw that in the 2025 State of Customer Loyalty paper, where we research and ask different brands about 100, 105 members primarily what are the top opportunities in customer loyalty and partnerships? It's a top five area of interest, but it's usually one or two. Now it's kind of fallen a little bit, both from the percentage of people who have an interest in partnerships but also just from kind of a net ranking. So, partnerships there's a big push right now on optimization of the partnerships. If you have one, two, three, four, are they working? Do they provide value to both of the brand's customers? So there's a big push right now on optimization. They're important, but they are a little bit more challenging than they have been in the past to get them approved, get them up and running but, most importantly, get them co-marketed within both organizations.

Speaker 1:

Yeah, and we know partnerships aren't always easy. We hear in member discussions there are challenges like integration, complexity, aligning, brand values, data sharing, even legal considerations that come up often, particularly in regulated industries like banking. What do you see as the biggest roadblocks that brands encounter when they're trying to forge these types of partnerships?

Speaker 2:

I think there are a few. Again, based on what we hear from the members of Voltea360 and what we see in the research is that making sure there's alignment between brands and the brand's customers that can be kind of a big challenge. It's foundational Making sure that the partnership is approved by both brands and we've seen many partnerships or a number of partnerships over the last couple of years where they're kind of terminated at the end. They were trial partnerships. They were in agreement to do co-marketing on both sides and that didn't actually come into fruition. But one of the biggest challenges now is getting the technology approved. So not only do you have to get the partnership approved within your organization, you have to make sure you have the technology that will allow you to kind of facilitate the partnership.

Speaker 2:

And that's a big challenge right now, just with the economic headwinds. So you're having to get two or three different things approved and, most simply, brands are. With this economic disruption we have each brand and everyone working in the brand customer loyalty team is busy. So how do you get in contact with other brands? How do you manage the meetings? How do you kind of look at the value discussion? How do you formulate that new ROI. That is needed when you facilitate or have an interest in running these more custom partnerships. So many partnerships are, you know, getting killed before they're even getting up and running.

Speaker 1:

Yeah, and you know, we've seen. You know some high profile alliances happening across industries recently, some successfully, some not. You know. The example of Ulta and Target unraveling their shop and shop agreement next year comes to mind. What can brands learn from these large, well-publicized partnerships to help shape their own strategies and stay ahead of evolving customer expectations?

Speaker 2:

Yeah, there are a number of different brands out there that are doing brand-to-brand partnerships quite well. You look at MGM. They're a member of the Multi360. They have a number of different program partnerships that they've launched with Royal Caribbean, celebrity, marriott and you think, ah, travel travel, that might be not a value add, not a benefit, but it actually is. They see those that are involved in both programs and how the co-marketing is significantly beneficial to both. You look at United and JetBlue with their Blue Sky program, another one, again another travel example. But why would United and JetBlue ever partner with each other? Obviously there's some value in alignment and those programs, although newer, are working quite well for both programs.

Speaker 2:

And you mentioned the Alta Target example. That is actually you got to ask me kind of winding down. But many in retail right now are focusing on the private label brands right and making sure that they're putting their private label brands out. And Target obviously is going through a number of changes right now within the organization, but they are focused on their private label beauty brands. So you know that creates that typical agency conflict we all learned about in business school. I'm not saying that's necessarily the issue, but I think Target is looking to put more and more of their own brands in front of their customers because they know that it's more profitable. And there's been some questions about profitability within that organization, so that may have led to some of that dissonance with regard to a reason why it may have kind of folded.

Speaker 1:

Yeah, and one of the other concerns we've heard from marketers is that partnerships sometimes risk becoming one-sided. It can morph into more of a promotional push than a true collaboration. How should brands go about evaluating their potential partners to ensure that there's a genuine mutual value for them both?

Speaker 2:

That's a big consideration for our members as well. We meet, we have peer groups for certain brand members of Volti360. They're seven to eight brands in non-competing industries and this is a pretty relevant and recent discussion with regard to the one-way hash we call them. You look at some of the cable industry. Right, I'm going to give you a discount for my program, but what is the cable company? They're getting the industry. Right, I'm going to give you a discount for my program, but what is the cable company? They're getting the value. Right, they're getting the value of that discount to offer their customers, but are they changing to whatever that gift card may have been?

Speaker 2:

So you look at some of the cable and telecoms. They've had to change their program because the customer at the end maybe wasn't necessarily getting that value. You've seen United Airlines again to bring them up. You know they are no longer selling their customer loyalty points into partnership programs, right, so they're kind of retrenching a little bit as well. So and it gets back to that whole idea of that reciprocal value and oftentimes that one-way hash.

Speaker 2:

The goal is for the the person offering the gift card and those respective opportunities is that eventually they'll flip and just work with me direct and that may or may not be the case. It's similar, like the OTA example In travel. If someone's using an Expedia loyalty program and you're booking your Wyndham, your Delta, your Marriott visits through that reward program, you know, at the end of the day Marriott, delta Enterprise, they want to get you as a direct customer and that is obviously the opportunity around partnerships. But oftentimes that doesn't happen and I think that's why those one-way pushes, or one-way hashes, as we like to call them, are not as prevalent as they once were.

Speaker 1:

Excellent. Well, one last question for you about partnerships. We know that brands are always on the lookout for some positive examples of great brands that are standing out in the marketplace. You mentioned a couple of interesting travel examples. Are there any other innovative loyalty partnerships you've seen this year that you think may help set that new standard for the industry?

Speaker 2:

Sure, I think, one that I have a good deal of respect for and I really didn't frequent them very often before is the Walmart loyalty program. They're starting to add a currency and value to that program currently, but it's in their partnerships the BK partnerships not that I go to Burger King that often but the Paramount partnerships. They have a number of partnerships that are very unique. I think it does a good job of keeping the Walmart name and brand in front of them oftentimes when they're not in the store and also the BP Earnify coalition or mini coalition. They're looking to pull together their partnership with Amazon and some of the others.

Speaker 2:

I think has the opportunity to do some very unique things as well to coalesce others around the brand, and I definitely think there is we're not Canada necessarily yet, but there is kind of an interesting push to have not two coalition programs but again finding kind of partners that can add some value when that customer is not engaging with one or more of the brands. So it'll be interesting to see if there's more partnering up and does that lead to exclusive partnerships where you have to kind of reconfigure your current bench of partnerships? So it's definitely an interesting time. There is interest, not as much movement, maybe not as much traction due to some of the challenges that exist, but it'll be interesting to see how partnerships evolve over the next year or two years.

Speaker 1:

Yeah, that's definitely right on. Those are both great examples and I know as an Amazon Prime user myself that Earnify one has come into my world, and I actually learned about that at Loyalty Expo. I was not aware of it until I saw the presentation by BP and I went immediately to my Prime account and connected those two things and then for my summer road trip this year I definitely was looking for those brands that were in that portfolio to fill up my gas tank. So I think it's working and it'll be interesting to see where those kind of mini coalitions or other programs go in the future.

Speaker 2:

Absolutely.

Speaker 1:

Cool. Well, thank you so much, Mark, for taking time out of all of the exciting loyalty work that you do every day to come and give some information to our audience. We always appreciate it. No one has insight into as many loyalty programs as you do and so you know we really, you know, appreciate you coming and bringing that to our audience and for everybody out there. Make sure that you are subscribed to Leaders and Customer Loyalty so you never miss an episode and you continue to get all the great interviews we have with brands, vendors and, of course, with Mark. Thanks again, Mark, Thank you everyone.