Choosing the right loyalty management software can be daunting.
Your loyalty program is a huge part of your overall brand and customer experience and there are a staggering number of features out there to consider when assessing your needs.
With so many choices, which system is the best? Will there be unexpected or hidden costs? Can it really solve my customer engagement challenges? And can it do what my customers expect?
But the decision comes down to how you answer these questions.
1. What Do I Like and Dislike About My Current Loyalty Platform?
If you currently have a loyalty platform and you’re looking to re-platform, it’s important to start here. (And even if you’re not currently looking, you should still consider what your ideal program would look like.) What’s working and what isn’t with your current platform today?
Maybe your current platform does a good job with reporting, but it’s very difficult to customize or add to it over time.
In our recent 2023 Loyalty Programs Data study, we found that 74% of consumers agree that they would engage more with brands that offered different tiers in their loyalty programs.
So, perhaps you are thinking of adding to different levels to your points program, or even a premium loyalty program that your best customers will pay to join, but your platform doesn’t support tiers or subscriptions.
Or maybe your annual licensing fee just feels a bit astronomical.
It’s important to make a list of wins and winces to help you narrow down your potential software vendors as you go. Then, start asking yourself more questions as you evaluate platforms.
2. Can It Support the Types of Rewards My Customers Value Most?
At the core of most loyalty programs is some type of currency that eventually earns rewards, most commonly points that can be redeem for discounts after members accumulate a certain amount.
But today’s consumers demand more choices on how to earn and redeem their rewards.
For example, 67% of consumers would love to see more options for what you can redeem your points for aside from just coupons or discounts. These rewards can include branded swag, sweepstakes or other creative rewards.
Our recent loyalty data found that the three rewards that consumers most likely want to redeem points for are discounts on purchases (80%), branded merchandise/swag (32%) and sweepstakes entries for the chance to win a prize (30%).
So, think about the types of rewards your customers would love the most and make sure that any potential platform you choose can support that.
3. Can I Use it to Send Personalized Marketing and Promotions?
Personalized communications and offers that are more relevant to members will drive higher response rates and program engagement. In fact, 40% of consumers would love to see more personalization from brand loyalty programs to offer a great member experience.
But there is a balance.
Almost a third of consumers (31%) don’t sign up for a brand’s loyalty programs because they don’t like to share their personal information.
So, it’s best to only ask for basic information at signup for basic personalization. This could include include name, email address and birthday, etc. Then, over time, you can run survey and personal profilers to learn more about your members, allowing their experience to be personalize over time.
It then becomes possible to target offers based on profile, segment, program performance and tier status.
On the more advanced side, some loyalty management software allows for dynamic content. This is web content that can change based on individual members’ behavior, preferences and interests.
If you want to engage your best customers, you can use this technology to dynamically change not only the website experience but also the email content that you send out.
4. Can I Use it to Analyze That Data for Optimization?
Does your loyalty management software offer the ability to provide predictive and prescriptive analytical services?
A loyalty program can be one of the best data collection tools available.
What could be better than first-party data on your best customers?
There are certain KPIs your software should track to deliver deeper insights and strategies that can be used to optimize your program.
For example, member acquisition, increase in spending, reward redemption rate, and churn are all important pieces of data to measure the health of your program.
Product usage is also critical. It will give you insights into what benefits your members love and which ones don’t get much use. This is the foundation of personalization.
Once you start collecting this data, your analytics team, or an external partner team, can help generate actionable customer insights through data.
Remember, data collected from your loyalty program is first-party data that is coming from your best customers. It’s like gold for your marketing efforts.
5. How Easy is it to Add to My Loyalty Management Software Over Time?
Hopefully, the software you choose can collect a lot of great data.
But once you have it, how easy is it to update your program based on your findings?
Loyalty programs should never be “set it and forget it” because consumer tastes, habits, and expectations are ever-changing.
You can use the data you have collected to truly listen to what your customers are saying and understand their needs.
But what good is that if your platform makes it hard to update and enhance your loyalty program over time?
If enough customers aren’t signing up for your program, is the value proposition compelling enough?
Maybe certain benefits aren’t being used. Would it make sense to cut them?
When members aren’t as active as you’d like them to be, are you communicating with them enough through your platform? Do you need to tweak the benefits?
Is it easy to make these tweaks on the go, or is changing the program to better suit your customers difficult or require customization?
Remember, once your program launches, that’s only the beginning.
Make sure whatever platform you go with is designed with optimization in mind.
6. What is My Budget?
One of the biggest considerations when it comes to loyalty management software is the cost.
And it can be very high, depending on what direction you go in.
Many software vendors charge not only for platform setup, but also for the initial consulting. And this can run into the six figures.
In addition, they usually charge an annual or monthly license fee just to use the software. This can often cost more than the implementation itself.
So, this becomes not only a question of your initial budget, but also how they charge.
Ask them if they charge for further customization and optimization as well. Many of them do.
Is the vendor going to charge you any time you need a change order? Will they bill you for services beyond just the platform like creative work?
It’s important to understand not only the costs of the software itself, but of any additional costs that might be overlooked initially.
At Clarus, we have a unique pricing model where we do not charge any upfront fees or add-on costs for consultation, build, deployment, optimization or services.
7. How Customized and On-Brand Do I Need it to Be?
Your loyalty platform needs to look and feel like your brand on the outside. This ensures your customers have a consistent experience across all touchpoints.
Is the software you’re looking at able to be customized to your brand identity standards?
Even more than just logos, colors, and fonts, will communications that come from your loyalty platform match the tone, look, and feel of your website?
When a customer logs into their loyalty account, can they even tell that they may be in a separate system?
While a loyalty platform may be a separate system on your end, to your customers, it’s all part of one big brand experience.
Related content: How to think about loyalty program branding.
At Clarus, no two programs we build for retailers look exactly the same.
We make it easy for each brand to add its personality to the program, mechanics, rewards, and more while continuing to be supported by our loyalty platform.
8. What Are My Technical Resources?
Or, perhaps another question is, “How hard do I want my technical integration to be?”
You want your loyalty management software to integrate with your POS system, website, and other touchpoints as easily as possible.
Make sure potential vendors have standardized APIs and an API developer portal.
APIs (or Application Program Interfaces) are important for all aspects of business technology including loyalty programs.
They are what allow different programs to communicate.
This allows your internal systems to connect with those of your loyalty platform. It eliminates the need for a lot of custom technical integration to get systems communicating seamlessly.
APIs from your loyalty management software should include Member Enrollment, Membership Status, Membership Update, Member Purchase File, and for a premium loyalty program where customers are paying to be in it, Membership Billing.
In addition to the APIs, an API Developer Portal is recommended.
This is detailed integration documentation that would give clients and prospects a clear understanding of integration preferences.
The portal will give your IT team an idea of how easy or difficult technical integration can be and communicates a standard baseline process.
It serves as a developer resource center that provides your team clear instructions on how to hook into the loyalty platform, how to format data, and more.
At Clarus, we take care of all the IT heavy lifting and can integrate with virtually any infrastructure to complement your existing CRM, eCommerce, POS, and payment gateways.
So, ask potential loyalty vendors how much development time their platforms typically require.
What would it take from your team to get their program fully integrated and up and running?
Ready to Start Searching for Loyalty Management Software?
Once you’ve honestly answered all the questions above, it’s time to start the search.
It’s important to get buy-in from your team at this point to ensure everyone is on the same page.
The last thing you’d want is to make a shortlist of potential vendors only to find out there is misalignment on goals, budget, resources or expectations.
The most important thing to remember is that most vendors are going to tell you their loyalty management software is the best.
Make sure you know exactly what will work best for you and your customers before making a commitment.
And if you’re looking for more advice, don’t hesitate to reach out to us. We love talking loyalty and would be happy to give some guidance.