Exploring the Rise of Ecosystem Loyalty Programs: A New Era in Customer Engagement

Businesses are constantly seeking innovative ways to engage and retain customers. One emerging trend that is gaining significant traction is the concept of ecosystem loyalty programs. Unlike traditional loyalty schemes, these programs offer a comprehensive approach by integrating multiple businesses to provide broader customer benefits. Understanding this trend is crucial for companies aiming to stay competitive and create long-term customer relationships.

Written by Karin Rise, Senior CRM & Loyalty Manager and Julia Stopner, Business Consultant Analyst, on March 5, 2025 | Reading time: 6 minutes

The Shift to Loyalty Ecosystems

Consumers today are digital surfers, quickly switching between different channels and devices. Traditional loyalty programs, with their static rewards and limited scope, struggle to capture their attention. Customers now seek experiences and services that create new touchpoints and enhance their overall journey. Moreover, as businesses increasingly rely on data for decision-making, it becomes critical to have access to a large amount of customer data, making companies reach for more data than that contained in their individual loyalty programs. This thirst for data, coupled with heightened customer expectations, gives rise to loyalty ecosystems, a program strategy that satisfies both of these current needs.

Karin Rise, CRM and loyalty Senior Manager at Curamando, elaborates on the trend of ecosystems: “Loyalty ecosystems provide customers with a more diverse set of benefits whilst simultaneously providing companies with a large set of customer data across several businesses. It is a win-win situation!”

Defining Loyalty Ecosystems

An ecosystem is a type of loyalty program where multiple companies join forces to create a unified platform, allowing customers to earn and redeem rewards across all participating businesses. Unlike traditional loyalty schemes that may offer limited partnership benefits, loyalty ecosystems provide a more integrated and cohesive experience, unbound by a single main brand.

Loyalty ecosystems can be categorized into several types: those within the same industry, those within the same corporate group and those that span across different industries. Each type offers unique advantages, but cross-industry ecosystems stand out for their ability to deliver the most diverse array of benefits to customers, and they are currently on the rise. Whilst being most prevalent in Asia today, cross-industry loyalty programs are emerging on a global level.

How Cross-Industry Ecosystems Work: Insights from the V Point Program

Cross-industry ecosystems operate through a structured business model and are typically initiated by one or two founding companies. These founders establish a separate company structure to manage the program and invite other businesses to join. These joining companies pay fees for each purchase that is made by a program member, as well as any additional services, viewing these expenses as marketing investments since the program attracts people to their stores. Expansion strategies for these programs can vary, with ecosystems either selecting a few key companies per industry or opening participation to all interested parties.

The Japanese V Point program serves as prominent example of a cross-industry ecosystem, boasting over 80 million users. It includes companies from a wide range of industries, such as food, wellness, entertainment and retail. Within this ecosystem, users can earn points through various activities, including making purchases at partner stores, participating in games or writing reviews. These points can then be redeemed in multiple ways, such as offsetting the costs of products at partner stores, discounting banking fees, or receiving cashback on credit card payments, thus offering a versatile and rewarding system for consumers.

Additionally, the financial structure of V Point is designed to benefit all parties involved. The program claims a fee when a member shops at a participating store which goes towards reimbursing any other store where the member later redeems points. Meanwhile, all stores where members shop or redeem points contribute with a marketing fee to V Point, enabling the program to generate profit. Additionally, V Point offers participating companies the option to purchase data insights. These insights are created by analyzing the vast amounts of customer data collected across the program. This data-driven approach enhances the value of the ecosystem for participating businesses, enabling them to tailor their offerings and marketing strategies effectively.

Pros and Cons of Cross-Industry Ecosystems: When to Consider Them

Participating in a loyalty ecosystem offers significant benefits. Not only increasing customer retention by introducing diverse rewards and a smooth customer experience, ecosystems also allow their participating companies to make use of the power of a vast pool of client data, harmonize their marketing efforts for maximum impact and share costs for program upkeeping.

However, companies must also evaluate the benefits of joining an ecosystem versus solely utilizing a self-created program. Participating in an ecosystem entails costs both through system modifications when initially joining and continuous fees. Companies must therefore be certain of having the financial means necessary as well as the expertise needed. Furthermore, brand image must be taken into consideration; Both the structure of the program and the other participants should resonate with the own customer base. For instance, luxury brand customers might resist a points-based system, as it may signal a lack of exclusivity. Lastly, joining an ecosystem entails giving up autonomous power over the program. Companies have to determine if the benefits outweigh the limitation of not being able to make future choices regarding program structure and new participants.

An alternative approach is instead to create a cross-industry program from scratch. Founding companies have control over program design, the possibility to set the strategic direction and can capitalize on program revenue. However, this must be evaluated against the increased risks this entails, such as management difficulties in handling a large number of partners, the cost for creating and developing the program as well as the possibility that a failure would reflect badly on the founders.

Ultimately, the choice to join or create a loyalty ecosystem depends on each company’s specific conditions, taking size, financial means and strategic objectives into consideration. Businesses must carefully weigh the potential benefits against the risks to determine the most suitable approach for their unique circumstances.

Conclusion

Ecosystem loyalty programs represent a shift in customer engagement strategies, offering a holistic approach to loyalty that aligns with the new consumer expectations. By strategically joining forces in the same loyalty program, companies can offer their customers a wider array of benefits and a more cohesive experience as well as leverage the benefit of accessing a greater pool of customer data. As the trend continues to gain momentum, businesses that are able to capitalize on ecosystem loyalty programs will be well-positioned to thrive in the increasingly competitive business climate.

How Curamando Assists in Loyalty Excellence

Curamando offers extensive solutions to help businesses navigate the complexities of modern loyalty programs. With an established process, we tailor loyalty programs to fit the specific needs of each of our clients. As a part of Eidra, our consultancy collective, we do this in collaboration with our partner companies, leveraging the expertise of professionals within business development, marketing and technology across the group. Our CRM and Loyalty team delivers comprehensive consulting services, encompassing the entire spectrum from crafting loyalty strategies and concepts to their full implementation and value realization. With Curamando’s expertise, businesses can effectively implement these trends, ensuring a competitive edge in the loyalty landscape.

Read more about our loyalty offering