Multi Brand Loyalty – Corporate buyer Program

What is multi-brand loyalty program?

by Gaurav Laddha (guest blogger)
“Customer acquisition costs 7 times customer retention.” – KISSmetrics. Retail giants spend millions on loyalty programs for customer retention. It’s a proven marketing tool. Almost all top retail giants are using it. An individual loyalty program is perceived as forced model of shopping. Hence, the program is called as customer loyalty program and not brand loyalty program. It is intended to motivate customer behavior to do repeat purchase from the same brand.

Customer Loyalty


Case Study of Payback

Payback Company has successfully understood this buyer behavior and revolutionized the concept of multi –brand loyalty program by building a pool of online brand partners. Great example for the reader to showcase an effective program. American Express paid approximately €425 (US $585) million cash for the acquisition which signifies the importance of model.

 How does it work?

Payback India has over 50 partner brands on its network. We choose Payback business model as center as it has uniquely positioned itself in this segment for a long time. Payback offers its customer multiple -brand options and linked with corporate rewards. By doing this it has already created buyer pool with buying ability for its online partner and at the same time, a buyer gets freedom of shopping.
 Unique position of payback –
• Corporate Loyalty program (Corporate rewards awarded as points)
• Freedom of points redemption with multiple Payback brand Partners

What are the opportunities?

Payback has very comprehensive revenue model and is win-win for all stakeholders – Payback, Online Partners, Corporates and End Customers.
Following are 3 salient points on which business needs to focus while designing a business model for multiple – brand loyalty programs.
• User Interaction with Corporates – Source of reward points
• User Interaction with Online partner brands – Source of point redemption
• User experience –Redemption procedure, Earning procedure

Research Insights

We conducted private user research on a small group of payback users and identified opportunities for value ads in this model. User research included –

  • heuristic analysis and experiential study on payback website, other similar websites, and apps.
  • user interviews and questioner survey of a small group of payback users and behavioral study on buying pattern using payback card and its website.

Some key findings were

1. User Interaction with Corporate – Source of reward points

Corporate companies reward points to an employee as performance acknowledgment. This has added an advantage of tax savings along with a quick collection of reward points.
The key feature of this program is that it is a corporate loyalty program. Corporate is the major supplier of points or revenue to this model and in return, it motivates an employee for better performance. Our research on payback suggests there is no special importance on this feature as users from our user group were not aware of the value of payback points. This defeats the key USP of the service.
Insights –
Corporate companies’ contributors are the principal benefit of Payback card. Sources like corporate companies can be a major contributor to reward points. It helps in a quick build up reward points which employee spends on partner brands giving a sense of happiness and satisfaction. Business needs to work on how to emphasize on a value of this source of reward points in its business model.
Ideas to explore –
Business needs to think creative ideas of increasing sources of reward points for the end customer. For example – Can same strategy used in schools, universities, competitions to increase the source of reward points and customer base for online partner. It will also contribute to increased customer base.

2. User Interaction with Online partner brands – Source of point redemption
Business needs to create a pool of partner brands both online and offline stores from various segments – like travel, hotel, entertainment, flights, buses, daily purchase etc. A user can redeem points with one or more partner brands. This gives user flexibility to spend on immediate need while preserving it’s spending within the pool. This model makes sure a customer is loyal to the partner pool and returns value to all partner brands for their association.
The key feature of this loyalty program is freedom and pleasure of shopping for an end user. It also makes sure that user spends on partner brands only. Our research on payback user suggested that users tend to redeem points with or Big bazar at majority. This can make an uneven flow of points not by user choice but a result of inadequate user interaction with online partner brands.
Insights –
This buying behavior is a result of ease of interaction or positioning of particular partner brand. For example- while the user will spend points on for entertainment, it may not use it anytime for purchase on eBay because he is not aware of other options. This is not the intended model. User interaction and partner brands positioning in a mind of a user are key for this model to be successful.
Ideas to explore –
Selection of partner brand can have increase value on this model. Points collected on daily purchase item can help a user get a better discount of high-value purchase or vice versa. Service usage can go up if these interactions are effective.

3. User experience –Redemption procedure, earning procedure
Point’s redemption and earning procedures are a core of this model. Any sort of discontent in user experience during these processes is fatal for an overall business model.
We conducted experiential research on user journey on online partners of Payback. This is one area where there are many opportunities for improvement like improved information architecture seamless navigation, reduced cognitive load, data chunking. User interaction and feedback process can be improved across user journey during shopping online. Similar value ads can be done to points earning method procedure.
Recommendation based on user research suggests Payback has an excellent business model and has tremendous potential. Payback end users are very happy and satisfied customer. A study suggests there is huge leverage possible from user experience point of view. It also highlights the unexplored potential of this segment to Banks and other mobile e-commerce companies.
Ideas to explore – Can seamless user experience across multiple brands makes user value these points as ancillary currency?

Summing up:

A loyalty program is well-known customer retention strategy. Giants like Reliance and Tata can afford to have their own loyalty programs however, it has its own maintenance cost.

Therefore, companies partner with banks credit cards point system to avail this option. Credit cards are old players in multi-brand loyalty programs. One of the major and successful players in this segment with a large customer base is Payback. This study highlights opportunities and salient features on how Payback has made multi-brand loyalty program more effective and profitable. It also tinkles upon unexplored ideas in this space.

In digital evolution mCommerce is rapidly growing. Multi – brand loyalty program can be a potential segment to explore for banks and startups. Lets chat.

Disclaimer: All company names, trade names, trademarks, trade dress, designs/logos, copyrights, images, content and products referenced in this blog are the property of their respective owners. No company referenced sponsored this blog or the contents thereof. All opinion expressed is by the individual blogger.

Sources of inspiration:

Article by Rahul Rana, COO, Payback India

Article by Grahame Dowling

Article by Alex McEachern



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