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Best loyalty software: comparison guide 2023

Discover the top 10 loyalty software options available on the market along with their pros and cons. Make an informed decision when it comes to building your loyalty engine.

Best loyalty software: comparison guide 2023

Contributors
Weronika Masternak
Content Writer
Best loyalty software

Building customer loyalty is more critical than ever in today's competitive business environment, and a popular way to achieve this goal is to (surprise, surprise!) create a loyalty system.

Loyalty programs are a proven method of rewarding customers for their ongoing engagement and encouraging them to choose your brand over the competition. Loyalty software makes it easier to establish and nurture strong customer relationships by automating loyalty processes related to tracking, management, and analysis.

But with so many loyalty software options out there, how do you choose the best one for you? That's where our comparison guide comes in!

We've researched and analyzed ten of the best customer loyalty program software options on the market, considering factors such as overall features and capabilities backed by existing customers' reviews.

Whether you're a small business owner looking to implement a loyalty program for the first time or a large enterprise seeking to upgrade an existing solution, we'll give you an overview of each solution, along with the pros and cons, to help you make an informed decision.

Key takeaways

  • The solutions market is highly fragmented, with various solutions available for SMBs and Enterprise clients.
  • Choosing the right top customer loyalty provider and loyalty program software is a strategic matter
  • There are simple loyalty software kits and plug-ins for basic needs.
  • For more sophisticated loyalty software you have to choose one of the options: pure loyalty program software, a loyalty module in a more comprehensive solution (for example, in a CRM system), or a bespoke loyalty engine created by in-house developers.
  • The build vs. buy dilemma still exists, but it's false. You no longer need to limit your business to a choice between building customized or off-the-shelf loyalty program solutions. Instead, it's better to both build and buy to ensure a seamless customer journey and maximum benefit to end customers.
  • When choosing loyalty software, consider it in terms of your current and future needs. Realize what level of agility you need and how you'd like the loyalty solution to evolve.
  • When analyzing costs, examine the actual TCO of the loyalty solution, including the cost of licensing, hosting, maintaining, upgrading, and expanding the solution in the future.

What is loyalty software in general? 

We've covered loyalty software and all its aspects so many times on our Insider blog. Yet, in a nutshell, loyalty software is a tool that allows you to track and manage customer purchases, reward points, and other loyalty program activities in a centralized and efficient way. It also allows you to communicate with loyal members and offer personalized discounts, rewards, or exclusive offers based on their individual preferences and behaviors.

You can easily build a custom loyalty program, as it can be tailored to different industries and their specifics, including retail, hospitality, fashion, beauty, fintech, or FMCG. The loyalty system can be delivered as a standalone app or as a solution integrated into your company's existing technology stack.

Any loyalty software is primarily designed to retain and expand the customer base by rewarding buyers for their loyalty, and typically includes basic features such as:

  • Customer tracking
  • Personalization
  • Reporting and analytics
  • Integrations
  • Mobile apps

So, loyalty software brings all sorts of benefits and assists companies in building strong customer relationships and delivering personalized experiences.

Customer tracking in a loyalty system

Customer tracking is an essential feature of loyalty program software that allows you to match transactions to member profiles, monitor behavior and purchases, manage loyalty points, and other loyalty activities in a centralized location. This can include tracking customer transactions, monitoring reward point accumulation, managing point redemptions, or selecting rewards. All of that wraps up in the basic metrics of a loyalty program

Some loyalty software systems include advanced tracking features, such as observing loyalty members' activities across multiple channels, including in-store, website, or mobile app. In addition, the tracking functionality is essential to accurately monitor loyal customers' actions to ensure they're receiving the incentives they're entitled to.

A loyalty system can provide valuable insights into customer behavior, allowing you to understand them better. The most advanced loyalty engines allow the collection of any transactional and behavioral data and use it in the loyalty program configuration.

Personalization in a loyalty system

Another vital feature of loyalty software is personalization, meaning the ability to communicate directly with customers and trigger them with personalized loyalty campaigns and rewards based on their individual preferences and behaviors.

Personalized loyalty programs can include:

  • Customer profiling using enriched first-party data collected inside the loyalty program.
  • Member segmentation based on transaction history and behavioral data.
  • Tailored loyalty campaigns.
  • Targeted rewards and deals.

The data shows that 53% of loyalty program owners plan to offer personalized rewards or deals in the next three years to increase customer lifetime value. That’s the spirit! 

Beyond that, many loyalty experts back up this statement that personalization will have a key impact on building long-term customer relationships. In our Loyalty Program Trends 2023 report, Alexa Jachowski, Senior Director and CRM at FreshDirect, when asked, "How do you see the future of loyalty programs over the next 2–3 years?" said that "personalization is going to be key, as customers want to feel like brands know them and are giving them what they want. We're also likely to see an increase in subscription/pay-to-play models as companies look to smooth out liabilities while offering greater value for joining the program."

The same is stated by another expert, Mohammad Al-Shanabla, Head of Loyalty at Miral Destinations, who, responding to the same question, said that "personalization should be key — you must speak to your customers on a 1:1 level as much as possible. I always go to this café because they know my name, and they know how I like my coffee."

Advanced personalization capabilities in the ticketing system allow you to segment and reward customers based on their demographics, psychographics, or past activities, or use machine learning algorithms to predict which shoppers are most likely to respond to specific offers.

The personalization feature helps companies create more engaging experiences that drive customer loyalty and satisfaction. It can also improve the effectiveness of a loyalty program by targeting rewards and incentives to selected audiences.

Reporting and analytics in a loyalty system

Reports and analytics built into loyalty software provide data and insights on customer behavior. This also allows you to automatically collect customer feedback and make informed decisions about your loyalty program development strategy or planned marketing activities. The most common areas addressed by analytics are tracking customer engagement and participation, monitoring the effectiveness of specific rewards or promotions, and identifying loyalty trends or patterns.

Specific loyalty software systems include advanced capabilities, such as generating custom reports or sharing loyalty program data with existing business intelligence tools to match them with the other information in the organization and understand customer loyalty program members better. 

You can leverage the data you collect to optimize your loyalty program and see what's working and what's not. Then, you can confidently make adjustments based on these findings. You can also identify opportunities to improve the customer experience, such as by offering a new or improved rewards catalog or by addressing customer needs and concerns about the products/services you deliver.

Integrations in a loyalty system

The ability to scale a loyalty system vertically or horizontally through integrations is another feature you should look for in your final choice. You can never tell whether you will need to include a new integration with a customer relationship management (CRM) system or with tools such as accounting software, inventory management systems, or marketing automation tools. Your loyalty system should also provide extensive API documentation, so you can build custom integrations.

Correctly implemented loyalty system integrations streamline business operations by providing a single, centralized place to manage customer interactions and data. Only then can you get a complete picture of customers, their activities, and the quality of the stored information.

Mobile app for a loyalty system

Pay attention to whether your loyalty software provider allows you to create a dedicated integration with a mobile app. After all, it's the most efficient way to track loyalty activities and redeem points on the go. A mobile app is a convenient and user-friendly way for customers to engage with your loyalty program. It can work wonders for your desired brand traction! Also, you should be able to customize the look and feel of your app, as well as integrate it with other mobile marketing systems or platforms of your choice.

Bear in mind that the broad group of people (Millennials, it is) are 14 times more likely to access loyalty programs via smartphone than from a computer. That's why you need a well-designed loyalty mobile app that includes features like tracking customer rewards and purchases, offering personalized recommendations and deals based on past behavior, and enabling direct payment redemption through the app. These simple yet powerful capabilities can help you create a more seamless and engaging mobile experience for your users.

Today’s loyalty software landscape 

The global loyalty management software market is booming! It's expected to grow from $5.57 billion in 2022 to $24.44 billion by 2029, showing a CAGR of 23.5%. More and more companies are investing in loyalty programs, and they're becoming one of the essential tools for generating revenue. 

On top of that, the loyalty solution market is highly fragmented, with different solutions available for SMB or Enterprise customers. Companies have many options at their disposal when choosing loyalty software, and the best customer loyalty solution will depend on their specific needs and goals. They can pick from solutions such as:

  • Plugin for existing eCommerce platforms
  • Bespoke loyalty program app developed by digital agencies
  • All-in-one marketing platform with loyalty module as a part of their system
  • Pure loyalty program software specialized in delivering loyalty features
  • End-to-end loyalty solution providers who base on providing a full loyalty  program management
  • Coalition loyalty programs where brands can join and become a part of a bigger loyalty program scheme
  • Promotion software with loyalty features
  • SaaS ecosystem with loyalty program modules 

… and so on.

The landscape continues to evolve, and whenever a new player emerges, the rest observe closely. 

Today, the loyalty ecosystem is also changing due to existing loyalty trends. This brings you to the real showstopper, headless architecture, which is the most modern way to develop a loyalty system. Our observations show that enterprise clients with the most mature technical teams are moving from monolithic to headless solutions to make the technology more cost-effective, quicker to expand, and flexible to personalize. This is fast becoming the new standard!

There is also the "build vs. buy" dilemma, where companies with unique requirements face a choice between:

  • Bespoke loyalty program solutions that are made-to-order but still costly to build and maintain.
  • Off-the-shelf loyalty solutions that are ready-to-use but have limited capabilities and narrow customization options.

No one said that building a loyalty system would be easy — you definitely have to do some digging beforehand.

Another distinguishing feature of the current loyalty landscape is that marketers and product teams prefer to build on top of their stack and add specialized components rather than replace existing solutions, for example, marketing automation or CRM. 

Besides, enterprise clients want full ownership of their data. They often require full control over customer information, which can be achieved with on-premise or private-cloud deployments (where the database is separated from other entities).

Businesses implement technology solutions to further manage loyalty programs, including CRM systems, mobile apps, point-of-sale (POS) systems, marketing automation platforms, mobile marketing platforms, mobile payment systems, customer feedback and review platforms, or social media management tools. All of these also play an important role in the loyalty landscape.

Comparison of the best customer loyalty programs

In the following comparison, we looked closely at the 10 available loyalty solutions that dominate the market. You can read about their overall performance expressed by our reliable loyalty experts, as well as the pros and cons voiced by their users, which we sourced from trusted review platforms.

1. Open Loyalty

Open Loyalty is a headless loyalty platform built with flexible building blocks for creating customized loyalty program mechanisms. With the world's most adaptable API, pre-built loyalty mechanics, and Open Loyalty Language, you can quickly roll out engaging loyalty features and create fantastic user experiences at every touchpoint.

This solution is ideal whenever you need to create your own loyalty program or plan to extend existing systems with a set of loyalty or gamification mechanics. 

This is especially true for two types of cases:

  1. Technical innovators — technology-driven companies with unusual loyalty program needs 
  2. Mature biz-tech companies — large companies with extensive needs for loyalty and/or gamification functions and enormous technical complexity.

Like no other solution, Open Loyalty is quick to implement and offers freedom of development and integration at the API level. In addition, Open Loyalty is available in SaaS and On-Premise/Private cloud models.

Open Loyalty's dashboard.
Open Loyalty's dashboard.

Open Loyalty clients appreciate the platform and its capabilities, saying:

  • "This is an ideal solution for companies that seek to complement their current e-business / CRM / ERP with a loyalty program without breaking nor the bank nor their current functionality."
  • "It gives the full capacity of loyalty features and flexibility on both on-premise and cloud."
  • "Every possible scenario has been thought out: campaigns with a set range of dates, rewards that depend on the client's loyalty level, segmentation of clients based on their number of points, rewards exchanged, number of transactions, etc."
  • "It's really easy to integrate with existing front-end solutions and has an admin panel that helps to define and dynamically changing levels, client segments, points-reward conversion rates, and also look at each client's transaction history, solve attribution problems, etc., effectively treating the loyalty program as an external module of their main software."
  • "The API documentation is kept up to date and is easy to consume. The team at Open Loyalty is great. They consistently provide good service and are willing to help if required"

Read more opinions on Open Loyalty.

To book a demo, click here.

2. Smile.io

Smile.io is a loyalty platform that provides reward programs that help eCommerce brands turn one-time sales into repeat ones. This solution is great for SMBs based on Shopify. In the main, Smile.io provides a loyalty program widget which can be added to the eCommerce. You don't need a developer to manage the loyalty program widget. With Smile.io's admin dashboard, changes are quick and easy.

Pros

  • "[...] they really got your back through the support content."
  • "Seamless integration with Shopify and Klaviyo."
  • "Has an easy drag and drop editor to create emails."
  • "Provides in-depth loyalty stats about the email subscribers and customers."

Cons

  • "There are very limited options for customizations in the free plan."
  • "It does have an inbuilt integration with Attentive for SMS Marketing. The email builder is basic, and we will need to have the emails built on our ESPs."
  • "Sometimes a bug would occur where points got redeemed automatically. There's also a bug where points are redeemed, the discount code would not appear on Shopify. Location of way to earn points and rewards can be more visible on the website."
  • "If you want to customize some things, such as referral program messages, you need a version of the tool that's priced higher."

Sources:

Smile.io provides a ready-to-use loyalty program widget for Shopify.
Smile.io provides a ready-to-use loyalty program widget for Shopify. Source.

3. Cheetah Digital

Cheetah Digital provides an all-in-one marketing platform with loyalty as one of the modules. The solution allows personalized experiences and cross-channel messaging that add value to the customer relationships. Loyalty experts said they're firmly targeting the MarTech industry and placing a strong emphasis on the communication elements.

Pros

  • "I would consider it as a fairly good product as it does what it's promised."
  • "Reporting was great for reviews."
  • "There were also some nice personalization add-ons available for reporting."
  • "There is a very simple and easy method to execute email marketing campaigns."

Cons

  • "Sometimes guests have issues logging into their account, even after we reset their password and provide them with a new one."
  • "Out of the box product has many properties and features which sometimes confuses the integration process. Additional customization takes a bit of time and effort."
  • "There are ratings for each guest, and we can't change the ratings or figure out how the ratings are generated."
  • "We likely do not use it to its full advantage, but it seems very outdated and kind of clunky."

Sources:

Cheetah Digital's all-in-one maketing dashboard.
Cheetah Digital's all-in-one maketing dashboard. Source.

4. Talon.One

Talon.One is a promotion software offering the functionality to engage customers with coupons, in-cart promotions, bundling, discounts and loyalty campaigns. So, suppose you need a promotional engine with loyalty elements for online operation, Talon.One might be a good option. With this solution, you can deliver all eCommerce promotions to your existing marketing platforms and CRM tools.

Pros

  • "Talon.One is a backend integration that allows you to integrate [...]."
  • "Their support is responsive and kind."
  • "The onboarding is painful, but after a few weeks and taking baby steps, you get to build amazing growth engines."
  • "We are prototyping quite a lot of new features with them [...]."

Cons

  • "My number one most frustrating thing is the lack of training and tool descriptions. As a new user, it was very difficult to understand what I was doing in the rule builder/campaign builder due to the lack of descriptions in the field. Even just a sentence or two that explains what something should do would be great."
  • "Cost can be expensive, depending on your scale. It depends on your ability to internally mobilize actions internally to make this a profitable addition."
  • "I wish Talon made it possible to set fully custom referral codes."
  • "I wasn't in the team when the integration was done, so getting to know the logic behind all attribute names and how they work is hard. Also, getting to know the format of each attribute and how they operate is not easy for a non-engineer profile."

Sources:

https://www.capterra.com/p/159778/Talon-One/

Talon.One allows creating various promotional campaigns like discounts, bundles, free products etc. Source.
Talon.One allows creating various promotional campaigns like discounts, bundles, free products etc. Source.

5. Antavo

Antavo is a loyalty no-code platform. The company provides ready-made hardware components to support kiosks or payment card terminals that could work well for brick and mortar businesses. 

Pros

  • "We can create different kinds of rewards to make them more attractive to the customers."
  • "We're currently rewarding customers for several actions they can take on the site [...]."
  • "It allows web and mobile access [...]."
  • "[...] we can customize it according to our needs [...]."

Cons

  • "It could be a little bit more intuitive in the text editor."
  • "[...] it doesn't come up with the regional language, mostly the English language is used."
  • "The system can feel a bit slow when entering new contest information and uploading files to the software. The integration with MailChimp was a pain, but because of a bug of ours that we were able to fix thanks to the attention of tech support."
  • "If they could expand their available language, it would be great, so we could have the software in our stores in Latin America."

Sources:

Antavo offers a set of ready-to-use loyalty dashboards for retailers.
Antavo offers a set of ready-to-use loyalty dashboards for retailers. Source.

6. Emarsys Loyalty

Emarsys Loyalty is an add-on for the Emarsys platform that helps businesses create highly personalized loyalty experiences. This solution tracks customer behavior, context, and purchases to offer a personalized experience, which can help increase lifetime value and return on investment. Marketers can manage it without the need for IT support.

Pros

  • "Connecting different channels in an easy way, especially direct mail, but also loyalty is a great addition."
  • "The best about Emarsys is the friendly way to manage our contacts, marketing campaigns and loyalty benefits."
  • "The automation center and the tactics seem to give many opportunities to for example increase revenues or enhance loyalty."
  • "It is great at personalizing and providing prospects and customers with a great digital experience."

Cons

  • "The price point is very high and competes at the enterprise-level pricing. For businesses with lots of transactions that drive multi-million dollar revenue, this is a no-brainer. For others, it's best to go with a more cost-effective solution."
  • "The system has a lot of options and scenarios which you can build out which can sometimes become overwhelming for the marketing team."
  • "Emarsys did not come through with what they had promised to my company for the amount of money they wanted to collect."
  • "Feature requests take a long time to be implemented. Extra costs for some minor tasks (like changes to the template or data exports)"

Sources:

Emarsys Loyalty's dashboard.
Emarsys Loyalty's dashboard. Source.

7. Annex Cloud

Annex Cloud (formerly Social Annex) is an all-in-one loyalty platform from the US market, founded in 2010. You can use it to launch and manage loyalty programs that boost customer engagement and lifetime value, reduce churn, and drive revenue. The solution offers integrations, loyalty widget and a unified suite of contests, reward, and gamification applications for customers. 

Pros

  • "Can work individually or as a platform to get impactful user-generated content."
  • "Allows integrating customer communication integration."
  • "It does most things you expect a Rewards and Product Review platform to accomplish."
  • "Reporting is clear and accurate."

Cons

  • "Annex Cloud has some limited functionality when it comes to unique businesses."
  • "There are a few features on the backend that we could not do on our own and self-manage."
  • "At the beginning of our relationship, there were integration-related challenges that needed to be worked through, specifically for Visual Commerce to function properly."
  • "It takes time to get used to the software. Also, pricing wise is a bit higher than compared to other competitors."

Sources:

Annex Cloud's dashboard.
Annex Cloud's dashboard. Source.

8. Oracle Cloud CX

Oracle Cloud CX is a customer experience solution that covers every stage of the customer journey, including the internet, contact centers, and social media. It's particularly suitable for companies with large customer networks in various industries, such as retail, travel and entertainment, the public sector, and online services.

Pros

  • "It has lots of reports and lots of powerful tools to use."
  • "[...] tool that makes CX and CRM management so simple and easy to use in any company of any size."
  • "I work in eCommerce and we use the program a lot for managing vendor agreements and accessing Purchase Orders."
  • "Its cost is high, since it is a product of Oracle and for this and other reasons its cost is high, but it can still be acquired without a greater risk of loss of investment."

Cons

  • "The program seems to crash on occasion, and it can run slow at times, but other than that I don't have any other issues with it."
  • "It's a difficult software at first, but I've gotten used to it and nowadays, I don't trade for any other."
  • "Boring interface and graphics can be improved in latest versions. Everything process looks same and user can be confused upon using as time goes."
  • "It is extremely hard to teach major gift officers how to use this software, it's much more technical than our team was willing to work with."

Sources:

https://www.softwareadvice.com/za/crm/rightnow-cx-profile/reviews/

Oracle Cloud CX's dashboard. Source.

9. Fivestars

Fivestars is a marketing platform that provides businesses with a range of tools to help them attract and retain customers. It features easy-to-use technology, customizable rewards and promotions, and automation. With Fivestars, businesses can reach out to new customers through SMS, email, and a mobile app and keep them coming back with targeted marketing campaigns. This platform is designed to help local businesses compete with larger retailers by providing them with the tools they need to market themselves effectively.

Pros

  • "It is easy for customers to manage their points and see what kinds of rewards they can redeem with those points."
  • "A customer can enroll without downloading an app or giving up an email address."
  • "It acts as a rewards program, so it encourages clients to keep coming back to use our facility."
  • "There can be some difficulties with set up but overall it runs smooth."

Cons

  • "Very few POS integrations, so it's hard to reward much of anything except visits. Also, your customer base is shared with your competitors."
  • "And as users, they don’t notify us to use our points before the company opts out. Resulting in waste of points and eventually loss of customers."
  • "It's not very up to date, it could use some sprucing up. I wish it had more businesses on the app. You can't hit the back button, you have to hit the X. I wish it also had a list of all businesses that are involved in this program."
  • "A monthly subscription price is offered. The installation kit is included in the price, although it's not frugal. Actual results may not be presently apparent if you aren't proactive in your marketing efforts."

Source:

Alt_text: Fivestars's dashboard.
Fivestars's dashboard. Source.

10. Zinrelo

Zinrelo is a SaaS-based loyalty platform that provides loyalty data analysis and ongoing strategic advice to increase customer retention, generate recurring revenue, and maintain overall profitability. The company presents itself as a good choice for medium to large companies.

Pros

  • "Zinrelo is a good marketing tool for our company to get customers to make more purchases."
  • "The support is very responsive and is willing to work with you to build out any features you may want."
  • "The integration with MIVA was very easy."
  • "Zinrelo gives us many insights about our customers that we can design our campaigns effectively."

Cons

  • "Using with BigCommerce, we have to generate our own coupon codes. The interface also does not seem as friendly to our older customers, as we get frequent emails about misunderstandings. That, however, is just user error."
  • "Some options are harder to find within the software, and the email preview could be a little more advanced."
  • "The campaigns feature could use some work. If I want to run a campaign and double the number of reward points for all customers, the campaign only checks our customer group for new accounts once per day. So, if you create an account in the middle of the day as a new customer, you wouldn't be included in the campaign. This has been something our team has had to work around within the platform."
  • "Processing Refunds and removing points can be cumbersome at times."

Sources:

Zinrelo's dashboard.
Zinrelo's dashboard. Source.

What if you need to build a bespoke loyalty software from scratch?

There's an ongoing debate about the benefits and drawbacks of building vs. buying a loyalty product or service. One argument in favor of building a loyalty solution from scratch is that it can be customized to a company's specific vision and requirements. This includes the design and development phase and the ability to make future improvements without being constrained by a ready-made solution.

Another advantage of building from scratch is the freedom to choose the technology stack and hosting location, which is especially important for companies with sensitive data and high-security requirements. However, this approach also has significant downsides, including more extended time to market, high development costs, and ongoing maintenance costs.

It can also be risky, as it comes with expensive mistakes and the possibility of distraction from the main goal of keeping customers satisfied. Additionally, building a backend system from scratch may divert a team's attention away from creating unique and memorable customer experiences that set the brand apart from the competition.

On the other hand, the "off-the-shelf" option offered by SaaS companies is an attractive choice for businesses looking to invest in loyalty programs due to the cost and resource savings, as well as the quality assurance. By purchasing a ready-to-use solution, companies can benefit from a loyalty system that has been extensively tested by many brands and is typically integrated with other systems and processes, such as POS or CRM. This can ensure a level playing field in competition and quicker time to market.

However, this option also has limitations in terms of customization and control and may require companies to compromise on their core vision and the desired shape of their loyalty program. Additionally, providers may offer several features that aren't necessary or already exist, which can add unnecessary complexity and cost. Legacy, one-size-fits-all solutions based on a monolithic model can also be inflexible and limiting as a business grows and scales.

Fortunately, the choice between building or buying a loyalty product/service is no longer a strictly binary decision! You can take advantage of both approaches by purchasing foundational and generic loyalty products while building unique and innovative features that set you apart from the competition and provide value to your end-users.

At Open Loyalty, we support exactly this build and buy approach so that you can use headless software with MACH principles and hybrid architecture to strike this balance to deliver a personalized and effective loyalty solution. This allows you to focus on building unique, memorable customer experiences and original features while relying on established and reliable products and services for the underlying infrastructure.

Does loyalty program software actually work?

If you're still swinging from the decision to build and buy your loyalty solution, let us give you some groundbreaking data and arguments to make sure it's a worthwhile investment.

It'll come as no surprise when we say that loyalty programs effectively help companies retain and grow their customer base — mainly because they give loyal members incentives to stay with a particular brand or company. According to Bond Brand Loyalty research, the average U.S. consumer belongs to 16.7 customer loyalty programs, and about 90% of businesses have some kind of loyalty program. And here's your company missing out on this amazing advantage for end-users. 

Research also shows that customers who participate in loyalty programs tend to have higher levels of brand loyalty. You need to foster bonds with customers, and you can do so without vast and pricey marketing and promo campaigns.

Other data reveals that 68% of loyalty program members spend more money to maximize earning points. Who doesn't want an additional revenue channel, right? 

If you're considering offering paid loyalty solutions, the truth is that they can also do the trick for you. McKinsey's data shows that 62% of consumers spend more money on a brand after signing up for a paid loyalty program, and 43% of people surveyed are more likely to make weekly purchases since joining a paid loyalty program.

Data from "Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand" by McKinsey.
Data from "Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand" by McKinsey. Source.

Even from this small sample of data, you can see that a well-thought-out loyalty solution can create the desired "stickiness" with your audience. As such, if your company doesn't have such a solution, you're missing a key way to build brand ambassadors and collect data to help you better target your program. 

To get the most value out of a loyalty program, it must be designed and managed head-on. This includes offering meaningful rewards that align with customer interests and preferences, making it easy for shoppers to participate and redeem rewards, or communicating regularly with loyal members about the program.

In addition, make sure that your loyalty program is integrated with other areas, such as customer support and product/service quality, to create a holistic and positive customer experience. A customer loyalty program, if run well, can be a valuable tool for customer retention and loyalty-building.

Final thought: refine your customer journey with a loyalty system

We hope our comparison guide has given you a thorough understanding of the best loyalty software options on the market and the key features and capabilities each solution offers. By carefully considering your business needs and goals and taking into account the information in this guide, you should be able to choose the loyalty software that best suits you.

Take as much time as you need to carefully research and compare your options. You should certainly try to send an RFP to the best loyalty providers. Don't be afraid to ask questions and request a demo, a free trial, or another test to get a better feel for each customer loyalty solution. Consider the level of support and resources offered by each provider, as well as their track record and reputation on the market.

Loyalty software is an important investment for your business because it can help you retain and grow your customer base, increase customer satisfaction, drive long-term success, and create rewarding experiences for your audience. Keep in mind that the best loyalty software for your case also depends on factors such as the size of your company, the type/number of experts on board, the complexity of your customer loyalty program, and your available funding pool.

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To get some loyalty program inspiration, check out the Top 100 Loyalty Programs report, or peek into the future of the loyalty industry with our Loyalty Trends 2023 research.

Building customer loyalty is more critical than ever in today's competitive business environment, and a popular way to achieve this goal is to (surprise, surprise!) create a loyalty system.

Loyalty programs are a proven method of rewarding customers for their ongoing engagement and encouraging them to choose your brand over the competition. Loyalty software makes it easier to establish and nurture strong customer relationships by automating loyalty processes related to tracking, management, and analysis.

But with so many loyalty software options out there, how do you choose the best one for you? That's where our comparison guide comes in!

We've researched and analyzed ten of the best customer loyalty program software options on the market, considering factors such as overall features and capabilities backed by existing customers' reviews.

Whether you're a small business owner looking to implement a loyalty program for the first time or a large enterprise seeking to upgrade an existing solution, we'll give you an overview of each solution, along with the pros and cons, to help you make an informed decision.

Key takeaways

  • The solutions market is highly fragmented, with various solutions available for SMBs and Enterprise clients.
  • Choosing the right top customer loyalty provider and loyalty program software is a strategic matter
  • There are simple loyalty software kits and plug-ins for basic needs.
  • For more sophisticated loyalty software you have to choose one of the options: pure loyalty program software, a loyalty module in a more comprehensive solution (for example, in a CRM system), or a bespoke loyalty engine created by in-house developers.
  • The build vs. buy dilemma still exists, but it's false. You no longer need to limit your business to a choice between building customized or off-the-shelf loyalty program solutions. Instead, it's better to both build and buy to ensure a seamless customer journey and maximum benefit to end customers.
  • When choosing loyalty software, consider it in terms of your current and future needs. Realize what level of agility you need and how you'd like the loyalty solution to evolve.
  • When analyzing costs, examine the actual TCO of the loyalty solution, including the cost of licensing, hosting, maintaining, upgrading, and expanding the solution in the future.

What is loyalty software in general? 

We've covered loyalty software and all its aspects so many times on our Insider blog. Yet, in a nutshell, loyalty software is a tool that allows you to track and manage customer purchases, reward points, and other loyalty program activities in a centralized and efficient way. It also allows you to communicate with loyal members and offer personalized discounts, rewards, or exclusive offers based on their individual preferences and behaviors.

You can easily build a custom loyalty program, as it can be tailored to different industries and their specifics, including retail, hospitality, fashion, beauty, fintech, or FMCG. The loyalty system can be delivered as a standalone app or as a solution integrated into your company's existing technology stack.

Any loyalty software is primarily designed to retain and expand the customer base by rewarding buyers for their loyalty, and typically includes basic features such as:

  • Customer tracking
  • Personalization
  • Reporting and analytics
  • Integrations
  • Mobile apps

So, loyalty software brings all sorts of benefits and assists companies in building strong customer relationships and delivering personalized experiences.

Customer tracking in a loyalty system

Customer tracking is an essential feature of loyalty program software that allows you to match transactions to member profiles, monitor behavior and purchases, manage loyalty points, and other loyalty activities in a centralized location. This can include tracking customer transactions, monitoring reward point accumulation, managing point redemptions, or selecting rewards. All of that wraps up in the basic metrics of a loyalty program

Some loyalty software systems include advanced tracking features, such as observing loyalty members' activities across multiple channels, including in-store, website, or mobile app. In addition, the tracking functionality is essential to accurately monitor loyal customers' actions to ensure they're receiving the incentives they're entitled to.

A loyalty system can provide valuable insights into customer behavior, allowing you to understand them better. The most advanced loyalty engines allow the collection of any transactional and behavioral data and use it in the loyalty program configuration.

Personalization in a loyalty system

Another vital feature of loyalty software is personalization, meaning the ability to communicate directly with customers and trigger them with personalized loyalty campaigns and rewards based on their individual preferences and behaviors.

Personalized loyalty programs can include:

  • Customer profiling using enriched first-party data collected inside the loyalty program.
  • Member segmentation based on transaction history and behavioral data.
  • Tailored loyalty campaigns.
  • Targeted rewards and deals.

The data shows that 53% of loyalty program owners plan to offer personalized rewards or deals in the next three years to increase customer lifetime value. That’s the spirit! 

Beyond that, many loyalty experts back up this statement that personalization will have a key impact on building long-term customer relationships. In our Loyalty Program Trends 2023 report, Alexa Jachowski, Senior Director and CRM at FreshDirect, when asked, "How do you see the future of loyalty programs over the next 2–3 years?" said that "personalization is going to be key, as customers want to feel like brands know them and are giving them what they want. We're also likely to see an increase in subscription/pay-to-play models as companies look to smooth out liabilities while offering greater value for joining the program."

The same is stated by another expert, Mohammad Al-Shanabla, Head of Loyalty at Miral Destinations, who, responding to the same question, said that "personalization should be key — you must speak to your customers on a 1:1 level as much as possible. I always go to this café because they know my name, and they know how I like my coffee."

Advanced personalization capabilities in the ticketing system allow you to segment and reward customers based on their demographics, psychographics, or past activities, or use machine learning algorithms to predict which shoppers are most likely to respond to specific offers.

The personalization feature helps companies create more engaging experiences that drive customer loyalty and satisfaction. It can also improve the effectiveness of a loyalty program by targeting rewards and incentives to selected audiences.

Reporting and analytics in a loyalty system

Reports and analytics built into loyalty software provide data and insights on customer behavior. This also allows you to automatically collect customer feedback and make informed decisions about your loyalty program development strategy or planned marketing activities. The most common areas addressed by analytics are tracking customer engagement and participation, monitoring the effectiveness of specific rewards or promotions, and identifying loyalty trends or patterns.

Specific loyalty software systems include advanced capabilities, such as generating custom reports or sharing loyalty program data with existing business intelligence tools to match them with the other information in the organization and understand customer loyalty program members better. 

You can leverage the data you collect to optimize your loyalty program and see what's working and what's not. Then, you can confidently make adjustments based on these findings. You can also identify opportunities to improve the customer experience, such as by offering a new or improved rewards catalog or by addressing customer needs and concerns about the products/services you deliver.

Integrations in a loyalty system

The ability to scale a loyalty system vertically or horizontally through integrations is another feature you should look for in your final choice. You can never tell whether you will need to include a new integration with a customer relationship management (CRM) system or with tools such as accounting software, inventory management systems, or marketing automation tools. Your loyalty system should also provide extensive API documentation, so you can build custom integrations.

Correctly implemented loyalty system integrations streamline business operations by providing a single, centralized place to manage customer interactions and data. Only then can you get a complete picture of customers, their activities, and the quality of the stored information.

Mobile app for a loyalty system

Pay attention to whether your loyalty software provider allows you to create a dedicated integration with a mobile app. After all, it's the most efficient way to track loyalty activities and redeem points on the go. A mobile app is a convenient and user-friendly way for customers to engage with your loyalty program. It can work wonders for your desired brand traction! Also, you should be able to customize the look and feel of your app, as well as integrate it with other mobile marketing systems or platforms of your choice.

Bear in mind that the broad group of people (Millennials, it is) are 14 times more likely to access loyalty programs via smartphone than from a computer. That's why you need a well-designed loyalty mobile app that includes features like tracking customer rewards and purchases, offering personalized recommendations and deals based on past behavior, and enabling direct payment redemption through the app. These simple yet powerful capabilities can help you create a more seamless and engaging mobile experience for your users.

Today’s loyalty software landscape 

The global loyalty management software market is booming! It's expected to grow from $5.57 billion in 2022 to $24.44 billion by 2029, showing a CAGR of 23.5%. More and more companies are investing in loyalty programs, and they're becoming one of the essential tools for generating revenue. 

On top of that, the loyalty solution market is highly fragmented, with different solutions available for SMB or Enterprise customers. Companies have many options at their disposal when choosing loyalty software, and the best customer loyalty solution will depend on their specific needs and goals. They can pick from solutions such as:

  • Plugin for existing eCommerce platforms
  • Bespoke loyalty program app developed by digital agencies
  • All-in-one marketing platform with loyalty module as a part of their system
  • Pure loyalty program software specialized in delivering loyalty features
  • End-to-end loyalty solution providers who base on providing a full loyalty  program management
  • Coalition loyalty programs where brands can join and become a part of a bigger loyalty program scheme
  • Promotion software with loyalty features
  • SaaS ecosystem with loyalty program modules 

… and so on.

The landscape continues to evolve, and whenever a new player emerges, the rest observe closely. 

Today, the loyalty ecosystem is also changing due to existing loyalty trends. This brings you to the real showstopper, headless architecture, which is the most modern way to develop a loyalty system. Our observations show that enterprise clients with the most mature technical teams are moving from monolithic to headless solutions to make the technology more cost-effective, quicker to expand, and flexible to personalize. This is fast becoming the new standard!

There is also the "build vs. buy" dilemma, where companies with unique requirements face a choice between:

  • Bespoke loyalty program solutions that are made-to-order but still costly to build and maintain.
  • Off-the-shelf loyalty solutions that are ready-to-use but have limited capabilities and narrow customization options.

No one said that building a loyalty system would be easy — you definitely have to do some digging beforehand.

Another distinguishing feature of the current loyalty landscape is that marketers and product teams prefer to build on top of their stack and add specialized components rather than replace existing solutions, for example, marketing automation or CRM. 

Besides, enterprise clients want full ownership of their data. They often require full control over customer information, which can be achieved with on-premise or private-cloud deployments (where the database is separated from other entities).

Businesses implement technology solutions to further manage loyalty programs, including CRM systems, mobile apps, point-of-sale (POS) systems, marketing automation platforms, mobile marketing platforms, mobile payment systems, customer feedback and review platforms, or social media management tools. All of these also play an important role in the loyalty landscape.

Comparison of the best customer loyalty programs

In the following comparison, we looked closely at the 10 available loyalty solutions that dominate the market. You can read about their overall performance expressed by our reliable loyalty experts, as well as the pros and cons voiced by their users, which we sourced from trusted review platforms.

1. Open Loyalty

Open Loyalty is a headless loyalty platform built with flexible building blocks for creating customized loyalty program mechanisms. With the world's most adaptable API, pre-built loyalty mechanics, and Open Loyalty Language, you can quickly roll out engaging loyalty features and create fantastic user experiences at every touchpoint.

This solution is ideal whenever you need to create your own loyalty program or plan to extend existing systems with a set of loyalty or gamification mechanics. 

This is especially true for two types of cases:

  1. Technical innovators — technology-driven companies with unusual loyalty program needs 
  2. Mature biz-tech companies — large companies with extensive needs for loyalty and/or gamification functions and enormous technical complexity.

Like no other solution, Open Loyalty is quick to implement and offers freedom of development and integration at the API level. In addition, Open Loyalty is available in SaaS and On-Premise/Private cloud models.

Open Loyalty's dashboard.
Open Loyalty's dashboard.

Open Loyalty clients appreciate the platform and its capabilities, saying:

  • "This is an ideal solution for companies that seek to complement their current e-business / CRM / ERP with a loyalty program without breaking nor the bank nor their current functionality."
  • "It gives the full capacity of loyalty features and flexibility on both on-premise and cloud."
  • "Every possible scenario has been thought out: campaigns with a set range of dates, rewards that depend on the client's loyalty level, segmentation of clients based on their number of points, rewards exchanged, number of transactions, etc."
  • "It's really easy to integrate with existing front-end solutions and has an admin panel that helps to define and dynamically changing levels, client segments, points-reward conversion rates, and also look at each client's transaction history, solve attribution problems, etc., effectively treating the loyalty program as an external module of their main software."
  • "The API documentation is kept up to date and is easy to consume. The team at Open Loyalty is great. They consistently provide good service and are willing to help if required"

Read more opinions on Open Loyalty.

To book a demo, click here.

2. Smile.io

Smile.io is a loyalty platform that provides reward programs that help eCommerce brands turn one-time sales into repeat ones. This solution is great for SMBs based on Shopify. In the main, Smile.io provides a loyalty program widget which can be added to the eCommerce. You don't need a developer to manage the loyalty program widget. With Smile.io's admin dashboard, changes are quick and easy.

Pros

  • "[...] they really got your back through the support content."
  • "Seamless integration with Shopify and Klaviyo."
  • "Has an easy drag and drop editor to create emails."
  • "Provides in-depth loyalty stats about the email subscribers and customers."

Cons

  • "There are very limited options for customizations in the free plan."
  • "It does have an inbuilt integration with Attentive for SMS Marketing. The email builder is basic, and we will need to have the emails built on our ESPs."
  • "Sometimes a bug would occur where points got redeemed automatically. There's also a bug where points are redeemed, the discount code would not appear on Shopify. Location of way to earn points and rewards can be more visible on the website."
  • "If you want to customize some things, such as referral program messages, you need a version of the tool that's priced higher."

Sources:

Smile.io provides a ready-to-use loyalty program widget for Shopify.
Smile.io provides a ready-to-use loyalty program widget for Shopify. Source.

3. Cheetah Digital

Cheetah Digital provides an all-in-one marketing platform with loyalty as one of the modules. The solution allows personalized experiences and cross-channel messaging that add value to the customer relationships. Loyalty experts said they're firmly targeting the MarTech industry and placing a strong emphasis on the communication elements.

Pros

  • "I would consider it as a fairly good product as it does what it's promised."
  • "Reporting was great for reviews."
  • "There were also some nice personalization add-ons available for reporting."
  • "There is a very simple and easy method to execute email marketing campaigns."

Cons

  • "Sometimes guests have issues logging into their account, even after we reset their password and provide them with a new one."
  • "Out of the box product has many properties and features which sometimes confuses the integration process. Additional customization takes a bit of time and effort."
  • "There are ratings for each guest, and we can't change the ratings or figure out how the ratings are generated."
  • "We likely do not use it to its full advantage, but it seems very outdated and kind of clunky."

Sources:

Cheetah Digital's all-in-one maketing dashboard.
Cheetah Digital's all-in-one maketing dashboard. Source.

4. Talon.One

Talon.One is a promotion software offering the functionality to engage customers with coupons, in-cart promotions, bundling, discounts and loyalty campaigns. So, suppose you need a promotional engine with loyalty elements for online operation, Talon.One might be a good option. With this solution, you can deliver all eCommerce promotions to your existing marketing platforms and CRM tools.

Pros

  • "Talon.One is a backend integration that allows you to integrate [...]."
  • "Their support is responsive and kind."
  • "The onboarding is painful, but after a few weeks and taking baby steps, you get to build amazing growth engines."
  • "We are prototyping quite a lot of new features with them [...]."

Cons

  • "My number one most frustrating thing is the lack of training and tool descriptions. As a new user, it was very difficult to understand what I was doing in the rule builder/campaign builder due to the lack of descriptions in the field. Even just a sentence or two that explains what something should do would be great."
  • "Cost can be expensive, depending on your scale. It depends on your ability to internally mobilize actions internally to make this a profitable addition."
  • "I wish Talon made it possible to set fully custom referral codes."
  • "I wasn't in the team when the integration was done, so getting to know the logic behind all attribute names and how they work is hard. Also, getting to know the format of each attribute and how they operate is not easy for a non-engineer profile."

Sources:

https://www.capterra.com/p/159778/Talon-One/

Talon.One allows creating various promotional campaigns like discounts, bundles, free products etc. Source.
Talon.One allows creating various promotional campaigns like discounts, bundles, free products etc. Source.

5. Antavo

Antavo is a loyalty no-code platform. The company provides ready-made hardware components to support kiosks or payment card terminals that could work well for brick and mortar businesses. 

Pros

  • "We can create different kinds of rewards to make them more attractive to the customers."
  • "We're currently rewarding customers for several actions they can take on the site [...]."
  • "It allows web and mobile access [...]."
  • "[...] we can customize it according to our needs [...]."

Cons

  • "It could be a little bit more intuitive in the text editor."
  • "[...] it doesn't come up with the regional language, mostly the English language is used."
  • "The system can feel a bit slow when entering new contest information and uploading files to the software. The integration with MailChimp was a pain, but because of a bug of ours that we were able to fix thanks to the attention of tech support."
  • "If they could expand their available language, it would be great, so we could have the software in our stores in Latin America."

Sources:

Antavo offers a set of ready-to-use loyalty dashboards for retailers.
Antavo offers a set of ready-to-use loyalty dashboards for retailers. Source.

6. Emarsys Loyalty

Emarsys Loyalty is an add-on for the Emarsys platform that helps businesses create highly personalized loyalty experiences. This solution tracks customer behavior, context, and purchases to offer a personalized experience, which can help increase lifetime value and return on investment. Marketers can manage it without the need for IT support.

Pros

  • "Connecting different channels in an easy way, especially direct mail, but also loyalty is a great addition."
  • "The best about Emarsys is the friendly way to manage our contacts, marketing campaigns and loyalty benefits."
  • "The automation center and the tactics seem to give many opportunities to for example increase revenues or enhance loyalty."
  • "It is great at personalizing and providing prospects and customers with a great digital experience."

Cons

  • "The price point is very high and competes at the enterprise-level pricing. For businesses with lots of transactions that drive multi-million dollar revenue, this is a no-brainer. For others, it's best to go with a more cost-effective solution."
  • "The system has a lot of options and scenarios which you can build out which can sometimes become overwhelming for the marketing team."
  • "Emarsys did not come through with what they had promised to my company for the amount of money they wanted to collect."
  • "Feature requests take a long time to be implemented. Extra costs for some minor tasks (like changes to the template or data exports)"

Sources:

Emarsys Loyalty's dashboard.
Emarsys Loyalty's dashboard. Source.

7. Annex Cloud

Annex Cloud (formerly Social Annex) is an all-in-one loyalty platform from the US market, founded in 2010. You can use it to launch and manage loyalty programs that boost customer engagement and lifetime value, reduce churn, and drive revenue. The solution offers integrations, loyalty widget and a unified suite of contests, reward, and gamification applications for customers. 

Pros

  • "Can work individually or as a platform to get impactful user-generated content."
  • "Allows integrating customer communication integration."
  • "It does most things you expect a Rewards and Product Review platform to accomplish."
  • "Reporting is clear and accurate."

Cons

  • "Annex Cloud has some limited functionality when it comes to unique businesses."
  • "There are a few features on the backend that we could not do on our own and self-manage."
  • "At the beginning of our relationship, there were integration-related challenges that needed to be worked through, specifically for Visual Commerce to function properly."
  • "It takes time to get used to the software. Also, pricing wise is a bit higher than compared to other competitors."

Sources:

Annex Cloud's dashboard.
Annex Cloud's dashboard. Source.

8. Oracle Cloud CX

Oracle Cloud CX is a customer experience solution that covers every stage of the customer journey, including the internet, contact centers, and social media. It's particularly suitable for companies with large customer networks in various industries, such as retail, travel and entertainment, the public sector, and online services.

Pros

  • "It has lots of reports and lots of powerful tools to use."
  • "[...] tool that makes CX and CRM management so simple and easy to use in any company of any size."
  • "I work in eCommerce and we use the program a lot for managing vendor agreements and accessing Purchase Orders."
  • "Its cost is high, since it is a product of Oracle and for this and other reasons its cost is high, but it can still be acquired without a greater risk of loss of investment."

Cons

  • "The program seems to crash on occasion, and it can run slow at times, but other than that I don't have any other issues with it."
  • "It's a difficult software at first, but I've gotten used to it and nowadays, I don't trade for any other."
  • "Boring interface and graphics can be improved in latest versions. Everything process looks same and user can be confused upon using as time goes."
  • "It is extremely hard to teach major gift officers how to use this software, it's much more technical than our team was willing to work with."

Sources:

https://www.softwareadvice.com/za/crm/rightnow-cx-profile/reviews/

Oracle Cloud CX's dashboard. Source.

9. Fivestars

Fivestars is a marketing platform that provides businesses with a range of tools to help them attract and retain customers. It features easy-to-use technology, customizable rewards and promotions, and automation. With Fivestars, businesses can reach out to new customers through SMS, email, and a mobile app and keep them coming back with targeted marketing campaigns. This platform is designed to help local businesses compete with larger retailers by providing them with the tools they need to market themselves effectively.

Pros

  • "It is easy for customers to manage their points and see what kinds of rewards they can redeem with those points."
  • "A customer can enroll without downloading an app or giving up an email address."
  • "It acts as a rewards program, so it encourages clients to keep coming back to use our facility."
  • "There can be some difficulties with set up but overall it runs smooth."

Cons

  • "Very few POS integrations, so it's hard to reward much of anything except visits. Also, your customer base is shared with your competitors."
  • "And as users, they don’t notify us to use our points before the company opts out. Resulting in waste of points and eventually loss of customers."
  • "It's not very up to date, it could use some sprucing up. I wish it had more businesses on the app. You can't hit the back button, you have to hit the X. I wish it also had a list of all businesses that are involved in this program."
  • "A monthly subscription price is offered. The installation kit is included in the price, although it's not frugal. Actual results may not be presently apparent if you aren't proactive in your marketing efforts."

Source:

Alt_text: Fivestars's dashboard.
Fivestars's dashboard. Source.

10. Zinrelo

Zinrelo is a SaaS-based loyalty platform that provides loyalty data analysis and ongoing strategic advice to increase customer retention, generate recurring revenue, and maintain overall profitability. The company presents itself as a good choice for medium to large companies.

Pros

  • "Zinrelo is a good marketing tool for our company to get customers to make more purchases."
  • "The support is very responsive and is willing to work with you to build out any features you may want."
  • "The integration with MIVA was very easy."
  • "Zinrelo gives us many insights about our customers that we can design our campaigns effectively."

Cons

  • "Using with BigCommerce, we have to generate our own coupon codes. The interface also does not seem as friendly to our older customers, as we get frequent emails about misunderstandings. That, however, is just user error."
  • "Some options are harder to find within the software, and the email preview could be a little more advanced."
  • "The campaigns feature could use some work. If I want to run a campaign and double the number of reward points for all customers, the campaign only checks our customer group for new accounts once per day. So, if you create an account in the middle of the day as a new customer, you wouldn't be included in the campaign. This has been something our team has had to work around within the platform."
  • "Processing Refunds and removing points can be cumbersome at times."

Sources:

Zinrelo's dashboard.
Zinrelo's dashboard. Source.

What if you need to build a bespoke loyalty software from scratch?

There's an ongoing debate about the benefits and drawbacks of building vs. buying a loyalty product or service. One argument in favor of building a loyalty solution from scratch is that it can be customized to a company's specific vision and requirements. This includes the design and development phase and the ability to make future improvements without being constrained by a ready-made solution.

Another advantage of building from scratch is the freedom to choose the technology stack and hosting location, which is especially important for companies with sensitive data and high-security requirements. However, this approach also has significant downsides, including more extended time to market, high development costs, and ongoing maintenance costs.

It can also be risky, as it comes with expensive mistakes and the possibility of distraction from the main goal of keeping customers satisfied. Additionally, building a backend system from scratch may divert a team's attention away from creating unique and memorable customer experiences that set the brand apart from the competition.

On the other hand, the "off-the-shelf" option offered by SaaS companies is an attractive choice for businesses looking to invest in loyalty programs due to the cost and resource savings, as well as the quality assurance. By purchasing a ready-to-use solution, companies can benefit from a loyalty system that has been extensively tested by many brands and is typically integrated with other systems and processes, such as POS or CRM. This can ensure a level playing field in competition and quicker time to market.

However, this option also has limitations in terms of customization and control and may require companies to compromise on their core vision and the desired shape of their loyalty program. Additionally, providers may offer several features that aren't necessary or already exist, which can add unnecessary complexity and cost. Legacy, one-size-fits-all solutions based on a monolithic model can also be inflexible and limiting as a business grows and scales.

Fortunately, the choice between building or buying a loyalty product/service is no longer a strictly binary decision! You can take advantage of both approaches by purchasing foundational and generic loyalty products while building unique and innovative features that set you apart from the competition and provide value to your end-users.

At Open Loyalty, we support exactly this build and buy approach so that you can use headless software with MACH principles and hybrid architecture to strike this balance to deliver a personalized and effective loyalty solution. This allows you to focus on building unique, memorable customer experiences and original features while relying on established and reliable products and services for the underlying infrastructure.

Does loyalty program software actually work?

If you're still swinging from the decision to build and buy your loyalty solution, let us give you some groundbreaking data and arguments to make sure it's a worthwhile investment.

It'll come as no surprise when we say that loyalty programs effectively help companies retain and grow their customer base — mainly because they give loyal members incentives to stay with a particular brand or company. According to Bond Brand Loyalty research, the average U.S. consumer belongs to 16.7 customer loyalty programs, and about 90% of businesses have some kind of loyalty program. And here's your company missing out on this amazing advantage for end-users. 

Research also shows that customers who participate in loyalty programs tend to have higher levels of brand loyalty. You need to foster bonds with customers, and you can do so without vast and pricey marketing and promo campaigns.

Other data reveals that 68% of loyalty program members spend more money to maximize earning points. Who doesn't want an additional revenue channel, right? 

If you're considering offering paid loyalty solutions, the truth is that they can also do the trick for you. McKinsey's data shows that 62% of consumers spend more money on a brand after signing up for a paid loyalty program, and 43% of people surveyed are more likely to make weekly purchases since joining a paid loyalty program.

Data from "Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand" by McKinsey.
Data from "Coping with the big switch: How paid loyalty programs can help bring consumers back to your brand" by McKinsey. Source.

Even from this small sample of data, you can see that a well-thought-out loyalty solution can create the desired "stickiness" with your audience. As such, if your company doesn't have such a solution, you're missing a key way to build brand ambassadors and collect data to help you better target your program. 

To get the most value out of a loyalty program, it must be designed and managed head-on. This includes offering meaningful rewards that align with customer interests and preferences, making it easy for shoppers to participate and redeem rewards, or communicating regularly with loyal members about the program.

In addition, make sure that your loyalty program is integrated with other areas, such as customer support and product/service quality, to create a holistic and positive customer experience. A customer loyalty program, if run well, can be a valuable tool for customer retention and loyalty-building.

Final thought: refine your customer journey with a loyalty system

We hope our comparison guide has given you a thorough understanding of the best loyalty software options on the market and the key features and capabilities each solution offers. By carefully considering your business needs and goals and taking into account the information in this guide, you should be able to choose the loyalty software that best suits you.

Take as much time as you need to carefully research and compare your options. You should certainly try to send an RFP to the best loyalty providers. Don't be afraid to ask questions and request a demo, a free trial, or another test to get a better feel for each customer loyalty solution. Consider the level of support and resources offered by each provider, as well as their track record and reputation on the market.

Loyalty software is an important investment for your business because it can help you retain and grow your customer base, increase customer satisfaction, drive long-term success, and create rewarding experiences for your audience. Keep in mind that the best loyalty software for your case also depends on factors such as the size of your company, the type/number of experts on board, the complexity of your customer loyalty program, and your available funding pool.

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For more articles like this one, make sure to follow our LinkedIn channel and stay up to date on all our latest content.

To get some loyalty program inspiration, check out the Top 100 Loyalty Programs report, or peek into the future of the loyalty industry with our Loyalty Trends 2023 research.

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