PROPOSAL: A-One is an idea for a new business that acts as a platform for other companies to host their loyalty programs. This will allow them to engage their customers intelligently, gather first-party data, and circumvent transaction fees by rewarding ACH payments. For consumers, A-One gives access to hundreds of loyalty programs within a single account to counteract the fatigue often associated with traditional loyalty program onboarding.

In this paper, I will explore the context of loyalty programs in today’s economy, current consumer trends, the ethical issues associated with this product, competitors, and potential go-to-market strategies. 

With financial discomfort becoming more prevalent in American households, and consumer expectations of businesses heightening, businesses are noticing a shift in traditional customer loyalty–incumbent enterprises are no longer able to rely on the long-standing relationships they have held with their consumers, as their cost-awareness is leading them to switch to other brands (Stambor 2025). Instead, these businesses are forced to engage with their customers through loyalty programs that aim to offer a highly personalized shopping experience; however, most have been unable to reach this level of engagement. McKinsey categorized loyalty programs into 3 stages, each providing more value than the previous: bronze, silver, and gold. Bronze was the least effective, offering only price-based benefits, while gold was the most valuable, integrating loyalty through personalized offers (McKinsey 2024). Most businesses these days are at the bronze stage; meanwhile, A-One can bridge the gap to gold. With a wide set of data, A-One is in a powerful position to change how consumers currently engage with their favorite brands and can empower businesses to drive higher margins through heavily engaging exclusive offers, discounts, and product collaborations.

One of the businesses that has managed to accomplish this is Target, via the Target Circle program–specifically, through the Target Redcard. After signing up, customers receive a 5% discount on target purchases. They justify this discount for two main reasons: it allows Target to gain valuable insights into consumers' habits and to circumvent transaction fees, which take roughly 2-3% of the purchase price. This means that if Target brought in $107.6 billion in revenue, it would pay approximately $2.2 billion in credit card transaction fees alone (Rampell 2023). Even though they are essentially offering 5% off to offset a 2.5% transaction fee, they can justify the remainder because the discounts increase customer engagement and share important purchasing information, which may be used to save costs in other operational duties. Initially, it would seem unrealistic for Target to onboard its entire consumer base onto these ACH payments, due to its long and difficult onboarding process. However, by wrapping it into an outward-facing loyalty program, Target can use personalization and loyalty discounts to generate much more value for its customers. In fact, in 2022, 20% of Target’s revenue was generated through the Target Redcard. Target has perfected the integration of loyalty programs into its business model, while others struggle to do the same. A-One could potentially fill this gap: If onboarding fatigue and lack of proper data analysis tools are what're preventing these companies from scaling their business and connecting with their audience, Target’s success could hypothetically be replicated as a service to other businesses. That is what A-One aims to accomplish.

According to an EY report, an omni-channel platform would be the most effective way to onboard customers and businesses onto A-One, with 58% of retailers preferring that amount of availability for their customers. And as for the customers themselves, 60% said they are either generally likely or very likely to download a mobile app to track rewards. Among those, the most important features were exclusive offers and discounts, real-time loyalty progress tracking, and a clean user experience (EY 2025). A-One is well-positioned to meet all these key consumer and business needs. The program will offer incentives for ACH payments, which cost much less to process than credit card transactions. This means businesses will feel enabled to provide higher discounts than those available elsewhere, preventing switching. Additionally, every loyalty program will be integrated into a single cohesive mobile app, allowing customers to easily track and manage their rewards across all of their favorite businesses. And finally, when customers are onboarded to the app, they are essentially onboarding to every program accessible through the A-One app–saving them from the traditionally long and fragmented onboarding processes to each of their frequently visited brands. 

Above all else, A-One will be in the best position out of anyone to provide businesses with actionable data analytics and insights–even for small businesses. The issue with current loyalty programs is that to be useful, they need to be highly personalized, which requires both a large amount of customer data and the tools to develop actionable insights from each dataset. Most companies need to hire entire teams to make use of the data they collect; however, many businesses lack the scale and the knowledge to execute a properly functioning loyalty program–that’s where A-One can help. Because A-One collects first-party data and purchasing data from its users, it will have the proper infrastructure to analyze and also communicate useful data to it’s partnered businesses. Because most businesses don’t have the aforementioned teams dedicated to customer service engagement, A-One will make suggestions to increase engagement and automatically send offers in an amount set by the owner to customers who appear to be slipping away. For example, a customer who has not interacted with a business for 30 days may receive a 10% discount on selected products to encourage repurchase. Another problem that A-One could solve is customer acquisition. According to Salesforce, customer acquisition is roughly 6 times more expensive than customer retention (Leder 2025). To cut costs, A-One may offer discounts at one store to a customer at another to get new customers, and encourage the support of local businesses–this would be especially powerful in close-knit communities where cross-business spending is traditionally encouraged, and competition is low.

Businesses around the country are integrating various loyalty programs into their operations, as these programs now have a significant impact on consumer purchasing decisions and satisfaction. In fact, almost three-quarters of consumers in the US consider loyalty programs to be a significant factor when they return for further purchases, and 48% stated that discounts are the key value presented in these loyalty programs (Canaves 2024). This detrimental shift is largely an effect of financial insecurity in target consumers: Gen Z. A report stated that 1 in 3 Gen Zers reported financial stress in 2025, and 36% of those said they didn’t have enough to meet basic needs. Furthermore, unemployment rates for 20-24-year-olds remain at a high of 9.2%, causing even more financial burdens on the next generation of spenders (Stambor 2025). As younger consumers are unable to find jobs, methods of saving money have become increasingly popular. The current standing for saving money–loyalty programs. Today, US consumers hold on average 17.9 loyalty programs, with about a 50% participation rate (Canaves 2024). Companies like Chipotle and Shake Shack have noticed this economic shift and continue to rethink how they keep their audience repurchasing. Their current strategy leans on loyalty rewards and promotional discounts to “re-energize” their audience; however, it takes much more than lower prices to get audience members coming back. 

Modern-day products and experiences are driven by personalization. Artificial intelligence and other analytics tools have made it easier than ever to construct extremely engaging experiences, and now the need to spark further innovation has come in the form of loyalty programs. Because most consumers nowadays are willing to exchange their first-party data for discounts and a better shopping experience, it is now much easier for businesses to use this data without the risk of being unethical. 89% of survey respondents stated that they would be willing to share information in exchange for better rewards (Canaves 2024). What further suggests this is that Antavo reported that customers who receive personalized rewards spend 4.3 times as much compared to those who redeem non-personalized rewards. As long as customers are willing and knowledgeable of this data usage, businesses such as A-One will have no trouble following users at critical purchasing triggers, in order to predict or even alter consumer behavior in the future.  

If A-One were to pursue all the features mentioned in this paper, including ACH payments, it would be competing in two different industries: banking and loyalty services. Banking is an archaic and slow-moving industry. Since banks are so big, they have strong defensibility, and they even offer their own rewards programs to help retain customers. Nowadays, that doesn’t seem to be enough. A study was conducted where participants were told to either pay with a credit card or redeem loyalty points to buy coffee. Then, at random, contestants were offered a cookie as an extra reward. After all was done, they rated their likelihood of returning to the theoretical coffee shop, and the results were very interesting: Those who had redeemed the loyalty points and didn’t receive a reward afterwards had the highest rate of return, while paying with a credit card and receiving a reward afterward had a lower rate (Boman 2025). This suggests that there is potentially a cheaper option, assuming ACH payments are used to gather these loyalty points, which would generate more customer satisfaction regardless. While banks drive high margins, there seems to be a lot of room for innovation within the space–and in the UK, customers’ previous loyalty is waning. Instead, many adults are switching to fintech or neobanks for their financial services–from 2016 to 2024, that number grew by 34% (Pekta 2025). This suggests there is a potential gap where A-One can fit, and because it operates within the loyalty services industry, banks may not see it as a threat, despite its ability to disrupt that space. 

There are a few main competitors within the loyalty industry that could pose a significant threat to A-One. One of them is Square, the point-of-sale and retail management company. Square has now become a leading provider for most small businesses as a suite of tools like payments, online order tracking, loyalty program builders, and more. They continue to grow, and their POS system is now seen in most small to medium-sized businesses, which is the primary threat. Although their loyalty program isn’t amazing, it is a good entry point for a lot of smaller businesses, and they already serve as the POS system for many of these companies, giving them the upper hand in distribution alone. Another competitor, called Antavo, is a leading loyalty program builder on the other end of the spectrum–they service larger enterprise companies. Antavo has many of the personalizing capabilities that A-One has, and the capital to defend itself. Although these companies may be hard to challenge, one key differentiating factor may open the possibility to disrupt them–the shared network within A-One. Because A-One consolidates many loyalty programs into a single centralized system, the value delivered to consumers is much higher and will ultimately lead to better results for each business. Theoretically, Square or Antavo could both try to replicate this model, but doing so would be extremely risky and difficult, as they would essentially be cannibalizing their own business model. They both take a siloed approach to their customers, so adding networks between each business would be against their own interest, as they could potentially lose many of their current customers, and in turn lose their main point of defensibility. That being said, A-One has a very strategic business model and defense layer: network effects. As this business grows and more businesses sign up for partnerships within A-One, the value to consumers will increase, and in turn, more people will be onboarded to the app. Consequently, this will provide even more value to businesses and perpetuate an endlessly increasing value cycle for both parties. If at any point another business tries to recreate the same product, A-One will always hold that network effect above them, so that even an identical product would ultimately fail if it were to compete. The best chance other providers have against this defense is discount rates. If they can offer higher discounts than A-One, customers are likely to switch; however, by incorporating strategic gamified components and emotional brand stickiness, the customer base may develop stronger habits that add an extra layer of defensibility to the product (WARC 2025). As a side note, it would be challenging to compete with higher discounts, as A-One already eats into card transaction fees for a higher margin–anything above would be unsustainable for the business.

A-One is well-positioned to disrupt current loyalty service providers through a network-style infrastructure. More than just ease of customization, it will allow businesses to build stronger connections with their consumers, as today's consumers expect higher levels of personalization from their favorite brands. Previous loyalty to heritage brands is waning as new product innovation and competition are causing consumers to rethink their spending on their favorite brands. As brands struggle to maintain customer loyalty, A-One can help by reducing customer acquisition costs, increasing retention rates, and strengthening relationships between businesses and customers.

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