Failure of the Plenti coalition program in the USA - Tomasz Makaruk

Failure of the Plenti coalition program in the USA

The welcome text at sounds like the last farewell carved on a graveyard tombstone „The Plenti program has ended. At this time all participants’ accounts have been closed off and all unreedemed points have expired”[1]. The last day of the program’s activity was July 10, 2018. One can stop with class or without. Plenti decided to redeem all unused points by covering itself by statutary provisions. From the date of the announced planned closure of the program, April 16 2018, which was announced on Twitter in a thoroughly American way, less than 3 months before closure. The official American Express message about the closing of the program said that „A number of factors, including shifting among some partners, and also the dynamic competitive situation in their market categories, despite the increase in the scale of the Plenti program since its launch, led American Express to the decision that investments in coalition-related loyalty projects, are better adapted to the conditions prevailing on foreign markets, on which American Express runs a number of programs of increasing scale[2]. Actually in the section „Account Cancellation, Inactivity and Termination” of the regulations of the Plenti program we find records about the organizer’s right to terminate the program and redeeming points actually from day to day „We reserve the right to terminate your account at any time and to modify and restrict your ability to use points, immediately, without prior notification. (…) If we terminate your account in the Plenti program, any points accumulated on the account will immediately be voided and can not be used. (…) We may terminate or suspend the entire Plenti program at any time based on our own consideration.[3]Under Polish law, such provisions would certainly be considered as abusive clauses, but after all we are discussing the project from the US market and not from the Polish one.

Not so long ago, in April 2017 during the VIII. Poland&CEE Customer Loyalty Summit, Plenti was presented first place by the organizer among the group of inspirers and CEO Joshua Berwitz acted as keynote speaker with the presentation entitled „The evolving US loyalty market”, in which he focused on convincing the audience that the thesis „why the time was right for the first loyalty Coalition” is only right and thoroughly true (the speech took place in English, hence I leave the title and quotes in the original wording).

Why then, the project referred to as the first coalition loyalty solemnly launched by American Express in May 2015 ended with media headers about failure, with which the most prominent preaches „Plenti of Problems[4]”?

Implementation success. At the beginning it is impossible to ignore the fact that the acquisition of leading American retailers to cooperate in a coalition, such as Macy’s clothing chain, Chili’s restaurant, energy and gas suppliers,  Hulu streaming platform, Nationwide insurer, Enterprise Rent-A-Car rental, ExxonMobil petrol stations, pharmacies/drugstores Rite Aid and telecommunication giant AT&T, was a huge success. The very concept of the Plenti program, whose organizer was dependant on American Express U.S. Loyalty (consisting in collecting points for purchases, which could then be exchanged for discounts when shopping at other partners) was new on the US market, in which despite the universality of loyalty programs, especially assigned to credit cards and point exchange offices, there was no serious competitor on a national scale. The common idea in Europe of a coalition approach in the USA was described as a bonus program assigned to a credit card, working … without a credit card. So that the average customer understands the essence of a project. Despite the existence of programs with a similar strategy, no one in the USA has launched a loyalty program on a scale such as Plenti. Communication about the program had to be understood, as at the end of 2016, 36 million active participants were registered in Plenti[5]. At the same time, just as in the majority of multipartner programs in Europe, Plenti guaranteed industry exclusivity to partners.

Crisis snowball. However already in 2017 (in less than two years since the program launch)  AT&T left the program – this event dated on the last day of October 2017 triggered an avalanche of exodus. The next partners who followed in the footsteps of the telecommunication were the Chili’s network, and at the beginning of January 2018 also, among others, Entreprise Holdings, Direct Energy, Expedia, Hulu and others. Also in January 2018 Rite Aids network ceased issuing Plenti points – this is probably the only objective reason for the partner’s departure due to Walgreen’s takeover of the network. At that time rumors began to appear in the media that the reason for leaving was the lack of added value offered by Plenti both for participants and for partners. In the ultra competitive US market, the measure of success and the determinant of operations is the sales dynamics, and this apparently was missing. Representatives of the Enerprise Holdings rental network spoke anonymously in the media explaining that “Termination of the participant agreement [in the Plenti program – TM footnote] by Enterprise Holdings simply means that Plenti did not offer the company enough added value (read: additional income)[6]”. An in-depth analysis leads to the conclusion that a nationwide coalition on the US market under the umbrella of the joint program where there were brands directing their products and services to buyers with very different characteristics was doomed to failure. The decision by the Macy’s network was probably decisive to close the program, which took place in two steps:  points were calculated for purchases made until mid-March 2018 and the burning of points was possible until the beginning of May 2018. Interestingly, most of the former Plenti coalition partners launched or revitalized their own loyalty programs, including for instance Macy’s launched a rebate program called „The Star Rewards”, and ExxonMobil the program „Exxon Mobil Rewards+” which gave participants the balance of the unused Plenti points.

Loyalty to brands or to the loyalty program? At the same time, the popularity of loyalty programs on the US market caused loyalty to a specific brand participating in Plenti, which turned out to be superior to the loyalty to the coalition program as such. The key benefit in the form of cross-selling between buyers of individual Plenti partners, which lies at the base of each multipartner program, was not sufficiently efficiently implemented in everyday life or simply did not bring the expected results. Independent from this that Plenti did not have a clearly defined value for the participants (telecommunication customers participating in the program received points without any conditional changes in purchasing behavior), brands competing to the brands offered by the Plenti coalition partners conducted their own loyalty programs, which value turned out to be higher and prevented for taking over participants for the benefit of the Plenti partners. To fully understand the role of the described factor from the perspective of the Polish market you need to be aware of the level of maturity and competitiveness of the American market. Encouraging key national brands to participate is one thing (not undermining the huge success of American Express in implementing the program), and propose and constantly develop the offer of benefits for the coalition partners and program participants is a second thing. And this second factor seems to be missing. Every time I compare the realities of the Polish market with more mature markets I come to the conclusion that if the Polish market of loyalty programs should be moved overseas, within a few weeks American managers would close 100 of the120 programs operating in Poland. Mainly due to the lack of their impact on sales. Not for the fact that Polish managers “are bad”, but because in the American corporate culture a project, which effectiveness remains at a lower level than assumed, is immediately closed. And you can write a book about the effectiveness of coalition solutions for the alternative of running your own loyalty program…..

 Other factors. The analysis of the causes of aviation accidents often ends with the conclusion that a series of errors and omissions, which led to the tragedy, whereby each of them occured individually and was not critical, however their co-occurence caused the catastrophy. It was the same in the case of Plenti. With certainty, to the fall of the program, to some extent, contributed also the fact that in less than 3 years of the program’s operation, it was headed by three different leaders/presidents: Abeer Bhatia, Joshua Berwitz (the mentioned keynote speaker, whom I had the pleasure to introduce to the stage during the loyalty conference in Krakow,  at a time when I was leading the conference for 5 years consecutively and Jacob King. Moreover, the industry media more than once reported a level of redemption of points lower than expected – according to Matitz Motivation Solutions less than half of the participants ever used the collected points[7], what would be a good result according Polish conditions. This low result, as for the realities of the US market, was dictated, according to the participants, by the too complicated process of burning points[8]. At the same time, the diversity of the partners resulted in some of them becoming partners, who burned more net points than they emitted. This led directly to the erosion of the value of their brands, because it was translated into significant price reductions. The increase in the number of unique buyers is not the same as the increase of sales value, especially when new buyers „pay with points”, taking the advantage of rebates thanks to redeeming their points accumulated while shopping with other coalition partners. The American market, used to building a coalition among non-competitive ones, because flying on various airline routes, bravely tried to take advantage of the novelty effect of the Plenty concept, but quickly withdrew from it when it did not bring the expected results. There are many other reasons for not being successful or simply saying failure, however the above are in my view the main determinants of the event of April 2018. Well, maybe it’s worth mentioning again that some partners conducted their own loyalty programs in parallel to the participation in the Plenti coalition. As a result, the final buyers had to remember about the participation in two programs, and the obligation to have a physical Plenti card while shopping did not make life easier (it was possible to enter a phone number and …. a PIN, making it difficult to identify). It is impossible not to notice that the scenario of partners leaving form Plenti was very close to the exodus of Partners from Payback in Poland. Perhaps this is the natural turn of things, perhaps the effect of the American Express corporate culture.

The main reason for the fall. Regardless of the above described failure factors, it is impossible to resist the impression that the main reason for the fall of Plenti was a bad strategy. American Express experiences, articulated in the communiqué, which I quoted at the beginning of the text, shows that involvement „in coalition-based loyalty projects, is better adapted to the conditions prevailing on foreign markets, on which American Express operates a series of growing programs of a growing scale” raises questions about what are „the projects” and on which foreign markets they are conducted. It is primarily known from Payback from the Polish market which operates in Germany, India, Mexico and Italy. Experiences show that the attempt to transfer the concept from European markets to the US market has been unsucessful, especially at the incentivization level not exceeding 1%, as in the case of Plenti. Despite the popularity of coalition concepts in the process of building loyalty in Europe, the large-scale multipartner program has never ended with success in the US market (I wrote about the problems of Air Miles and Aeroplan from the Canadian market here: As Forbes summarized, „What went wrong? The Plenti program was created following the model of a similar project from Germany under the name Payback, also controlled by Amex. Perhaps something has been translated badly, but apparently shopping behavior is not so easy to transfer from one continent to another (…)[9]” At the same time, participation in a coaliton program, means de facto outsourcing of its organization to the organizer, for whom we remain one of many (even the most important one, is still one of many) partners. Consequently (and I hear this feedback often when talking to Payback’s ex-partners in Poland) the use of knowledge derived from data analysis is inadequate. The result is „loss of access to transactional data from participants. Even if Plenti had provided value to its members, this lack of in-depth analysis of own loyalty activities should have been enough to cause coalition partners to rethink the legitimacy of their participation”[10]. What was missing? An in-depth analysis of the user experience including all contact points of the participants with the offer of each of the coalition partners, a personalized offer prepared on the basis of purchasing behavior of each participant separately, satisfying the needs of buyers, emotional layer and that what Americans call „enhanced shopper experience”. The decision to participate in a partnership program, raises the consequences in terms of image, distinctions of participating brands, as well as communication to buyers on behalf of the program’s brand from the perspective of the need to reconcile the interest of all partners.

The described event raises a question about the future of the Polish Payback, where the American Express Company exercises control through a number of subsidiaries in various jurisdictions. If the topic is interesting for you, I encourage you to contact me directly or in the form of the below comments. Summarizing – the road that began with „Plenti of high hopes[11] led to „Plenti of problems[12],  and ended with „Plenti of learnings for the future”. It’s best to learn from other people’s mistakes.


[1]The Plenti program has ended. At this time, all Plenti accounts have been closed and all unredeemed Plenti points have expired”

[2]While Plenti has grown in scale since its launch, a number of factors, including shifting priorities among some partners and changing competitive conditions in their industries, led American Express to determine that its investments in coalition loyalty initiatives will be better suited to international markets where it manages several large and growing programs.

[3]„We reserve the right to terminate your Plenti account at any time, or to modify or restrict your ability to use Points, immediately and without notice. (…) If we terminate your Plenti account, any Points in your Plenti account will immediately be voided and cannot be used. (…)We may terminate or suspend the entire Plenti program at any time, in our sole discretion.”



[6]The termination of the participation agreement by Enterprise Holdings simply means that Plenti didn’t offer enough value (read, “incremental revenue”) to the company



[9]What went wrong? The Plenti program was supposedly modeled after a similar program in Germany called Payback that Amex also owns. Maybe something got lost in translation, but more likely is that shopping patterns don’t necessarily translate from continent to continent

[10]„(…) and lost any visibility into their customers’ data in the process. Even if Plenti hadn’t failed to deliver value to its members, this lack of insight into its own customers’ loyalty activity should have been enough to cause merchants to rethink their participation.




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