We wrote this article to help tech teams learn how to use an API-first loyalty engine. We'll also share some top tips for doing it right.

The article is written by Sebastian Müller - E-Commerce Department Manager of Otto Group Solution Provider (OSP), a leading Open Loyalty technology partner. Sebastian presents insights based on his experience with working on Open Loyalty, including learnings from the loyalty engine implementation for Limango - an ecommerce offering products from over 3,500 brands.

What you will learn from the article:

• When API-first loyalty engine like Open Loyalty is a good fit
• What to remember when integrating an API-first loyalty engine
• How the loyalty engine fits into the bigger picture of system architecture
• Examples of integration patterns with systems like eCommerce, CRM, marketing automation, POS, or a mobile app

When is an API-based engine a good fit for your tech-stack?

API-first engine is a modern way to build applications. It offers flexibility and safety as you can easily integrate and remove individual components from your tech stack.

API-first loyalty engine first perfectly when:

• You want to extend your product with loyalty and gamification features
• You have a composable system architecture and want to add another API-first component to the stack 
  

From a technical point of view, it is a perfect match when:

• you have a complex tech stack and want to extend existing products with loyalty features, instead of introducing an all-in-one loyalty program management platform
• you have an API-based ecosystem - an API-first loyalty engine will be another building block you can add to your tech-stack
• you’re aiming for the composable architecture - an API-first loyalty engine can be a good step toward that future-proof direction

A loyalty engine is a well-suited solution for various tech environments due to its flexibility and adaptability.

1. Extending existing products with loyalty features: If you have an existing product or system and want to enhance it with a loyalty program, Open Loyalty offers the necessary tools and capabilities. By integrating Open Loyalty into your tech stack, you can easily introduce loyalty features such as point accumulation, rewards, tiers, and personalized offers to enhance customer engagement and retention.

2. API-first ecosystem: Open Loyalty follows an API-first approach, providing a comprehensive set of APIs that enable seamless integration with other systems in your tech ecosystem. This allows for smooth communication and data exchange between Open Loyalty and your existing applications or services. The API-first design empowers you to leverage loyalty program data and functionalities in a flexible and scalable manner.

3. Composable architecture: Open Loyalty's composable architecture allows you to build and customize loyalty program components based on your specific needs. This modular approach enables you to select and integrate the desired loyalty features, such as referral programs, gamification elements, or social sharing, to create a tailored loyalty program that aligns with your business objectives. The composable architecture also supports easy scalability and future enhancements as your loyalty program evolves.

By considering these factors, you can determine whether the Open Loyalty engine aligns with your tech environment and supports your goals of extending existing products with loyalty features, operating in an API-first ecosystem, and leveraging a composable architecture. Open Loyalty's flexibility, API-centric approach, and modular design make it a versatile solution for integrating a loyalty program into your tech stack.

What to keep in mind when integrating a loyalty program

Planning

Planning the integration of a loyalty program like OpenLoyalty is crucial. A good approach usually includes these steps:

Workshops: Hold workshops to make sure everyone understands how to use and set up the loyalty program's admin tool. This will help the integration and customization go smoothly.

Collaboration: Talk with the important people in your organization to figure out exactly what you need from the loyalty program. Work together to define what you want, like how rewards will work, how points will be earned, and how to keep customers engaged.

Feature assessment: Look at what your organization needs and see if you need any extra features or special tweaks from the loyalty program provider. This step is about making sure the program fits well with what your business wants to achieve.

Planning and resource allocation: Plan out the steps, timeline, and resources you'll need. This means identifying important milestones, setting realistic deadlines, and making sure you have the right people and tools for the job.

Designing architecture

High-Level architecture proposal: Start by suggesting a high-level plan for how OpenLoyalty will fit into your current systems. This plan should think about important things like how well it can grow, its security, and how it works with what you already have.

Collaboration and iterative refinement: Work closely with key people like developers, product owners, and tech leads. Keep refining your plan through discussions, focusing on the technical details, specific ways you'll use it, and possible challenges. This teamwork makes sure the architecture meets your organization's needs and goals.

Robust and scalable design: Your goal should be to build a strong and flexible architecture that can handle the loyalty program's demands and growth. Think about how you'll store data, integrate APIs, and keep the system running smoothly. Try to make the design as independent as possible, but also ensure it can work well together when needed. This approach lets you make changes in one area without affecting others and makes it easier to connect with other systems through APIs. At the same time, make sure that when parts do need to work together, they do so efficiently and quickly, for a seamless loyalty program experience.

Handling data synchronization and source of truth in loyalty systems

To make sure your loyalty system data is synchronized and reliable, it's a good idea to use modern methods like webhooks and real-time data processing.

Webhooks in real-time: By using webhooks in OpenLoyalty, you can keep your loyalty program data flowing and up-to-date. This means all the loyalty info gets updated across customer systems instantly and accurately.

API for data access: Set up an API within OpenLoyalty. This API should have endpoints for getting specific data, like customer and campaign details, transaction history, reward balances, and how well campaigns are doing. This way, you can easily access the data you need for reports, analyzing, and integrating with other systems.

Creating a single source of truth (SSOT):

It's important to make Open Loyalty (OL) the main place for all your loyalty data, like points totals. This means OL is the go-to source for all loyalty info, making sure everything is consistent and correct everywhere.

Benefits of SSOT: By doing this, your loyalty program gets better overall. It becomes more reliable and gives a better experience to customers. They'll always have the most recent and trustworthy information about their loyalty rewards.

OSP's best practices for implementing Open Loyalty

Working together: OSP believes in working closely with both Open Loyalty (OL) and the customer. This teamwork helps OSP really understand what the customer needs and makes sure the loyalty program fits those needs perfectly.

Hybrid integration team: OSP recommends having a team with people from both the customer's side and OSP's experts. This mix helps in communicating well, using everyone's knowledge and skills to meet the project's goals.

Teaming up with other groups: OSP knows it's important to work well with other teams that have systems which need to link up with Open Loyalty. Good teamwork here makes sure everything integrates smoothly and that data and processes flow well between systems.

Using what we've learned: OSP uses its experience with Open Loyalty to give great advice and solutions. This know-how is key in handling challenges and making sure the integration goes without a hitch.

Customization and setting up: OSP works closely with the customer to tweak and tailor Open Loyalty. They focus on matching the customer's brand, business rules, and how they want to treat their customers. This means the loyalty program will really fit what the client is looking for.

Testing and making sure everything works: OSP takes testing and quality checking very seriously. They make sure to test everything – how well the program works, its security, and how it performs. This is to ensure that Open Loyalty does exactly what the client needs.

Understanding open loyalty's integration methods (API/Webhooks) and their use cases

Webhooks for real-time updates

What they are: Webhooks are great for when you need instant updates or alerts from your loyalty program.

When to use them: They're ideal for situations where you need to act fast, like when a customer reaches a new loyalty level or earns a reward.

Testing: Make sure to thoroughly test webhooks to ensure they work well and reliably.

APIs for data queries

What they are: APIs are better for when you need to look up information, like checking customer details or using points and vouchers.

When to use them: Use APIs when you need to get specific information from your loyalty program and use it in other systems, for reports, analysis, or creating custom apps.

Testing: It’s crucial to do detailed testing on your APIs to make sure they give accurate and stable results.

In summary

• Webhooks are your go-to for quick responses to events in your loyalty program.
• APIs are best for when you need to gather specific data or information.
• The choice between webhooks and APIs depends on what you need to do in your integration, and either way, proper testing is key to make sure everything works as it should.

An example of an ecommerce architecture build around a loyalty engine

This is a look at how Open Loyalty (OL) can be part of a typical online shopping setup. OL gets different kinds of information from how customers interact with the online store. Then, OL can let other systems know what's happening through webhooks or event processing. Online APIs also give up-to-date information, like how many points a customer has, at different places where customers interact with the store.

In this setup, these are the main parts:

Open Loyalty (OL): This is the heart of the loyalty system. It gets info from different places customers use in the online shopping world. This could be from the shopping website, a mobile app, or the system used in physical stores (POS).

Data flows: Information flows from these customer interaction points to OL. This includes things like when a customer places an order, pays, or changes their details. OL then takes this info and works with it.

API gateway: This is a key part of the setup. It's like a gatekeeper for OL's APIs. It makes sure that only the right systems can get to OL's info. It handles things like who’s allowed in, directing traffic, and keeping things secure.

Omnichannel touchpoints: The setup is designed to work across different ways customers interact with the store. This means whether they're shopping online, using a mobile app, or buying something in a physical store, they can still connect with the OL system. For example, customers can order things online, check their points on an app, or pay at a store’s checkout.

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Integration best practices

eCommerce

Seamless data synchronization: Ensure that loyalty-related information, such as points, rewards, and customer data, is synchronized in real-time between the Open Loyalty engine (OL) and the eCommerce platform. This allows for accurate and up-to-date loyalty program functionality within the online shopping experience.

User-friendly interface: Create a user-friendly interface within the eCommerce platform that provides customers with easy access to their loyalty program activities. This includes displaying loyalty points, rewards, and personalized offers in a clear and intuitive manner.

Personalization techniques: Utilize personalization techniques to offer targeted promotions and rewards based on customer behavior and preferences. Leverage data from the loyalty program, such as purchase history and browsing behavior, to provide personalized recommendations and incentives.

Seamless checkout process: Integrate the loyalty program seamlessly into the checkout process, allowing customers to redeem loyalty points and view available rewards in real-time. Provide transparency by clearly displaying the value of loyalty points and the benefits of redeeming them during the checkout process.

Marketing automation (e.g. Braze)

Seamless data flow: Ensure a seamless flow of loyalty program data from OL to the marketing automation platform, such as Braze, to enable real-time updates and synchronization. This allows for targeted messaging and personalized offers based on loyalty program engagement.

Personalized campaigns: Leverage loyalty program data to create personalized marketing campaigns and offers. Segment customers based on their loyalty program status, preferences, and behavior to deliver tailored messages that resonate with their interests and increase engagement.

Automated triggers and notifications: Implement automated triggers and notifications based on loyalty program events, such as reaching a new loyalty tier or earning a reward. This allows for timely and relevant communication with customers, keeping them informed and engaged with the loyalty program.

Data-driven decision-making: Analyze the effectiveness of marketing campaigns using loyalty program data. Measure campaign performance, track customer responses, and gather insights to make data-driven decisions for future campaigns. Continuously optimize marketing efforts based on loyalty program data to maximize results.[DD1] 

CRM (e.g. Salesforce)

Bidirectional data synchronization: Establish bidirectional data synchronization between OL and the CRM platform, such as Salesforce, to ensure that customer data is up-to-date in both systems. This allows for a unified view of customer interactions and loyalty program engagement.

Customer segmentation: Utilize loyalty program data within the CRM platform to create customer segments based on loyalty program engagement and preferences. This enables targeted communication and tailored offers for different customer groups, increasing the effectiveness of marketing efforts.

Personalized communication: Leverage loyalty program data to enable personalized communication and targeted offers within the CRM platform. Use customer insights from the loyalty program to deliver relevant and timely messages that enhance customer engagement and loyalty.

Analyzing customer behavior: Analyze customer behavior and loyalty program performance within the CRM platform. Gain insights into customer preferences, purchase history, and loyalty program engagement to inform targeted marketing strategies and customer retention initiatives.

Point of sale (POS)

Seamless integration: Implement a seamless integration between OL and the POS system to enable real-time updates of loyalty-related information during in-store transactions. This includes loyalty point accumulation, redemption, and transaction history.

Frictionless loyalty point accumulation and redemption: Enable loyalty point accumulation and redemption directly at the POS, providing a frictionless experience for customers. Integrate loyalty program functionality into the POS interface, allowing customers to earn and redeem points seamlessly during their in-store purchases. 

Integration of loyalty program data: Ensure a smooth integration of loyalty program data between online and offline channels. Customers should be able to access and manage their loyalty program activities, such as checking their points balance or redeeming rewards, across all touchpoints. 

Personalized offers and promotions: Leverage loyalty program data to implement personalized offers and promotions at the POS. Use customer insights from the loyalty program to deliver targeted incentives and rewards based on customer preferences and purchase history.

Custom mobile app

User-friendly and intuitive interface: Implement a user-friendly and intuitive interface within the custom mobile app to provide customers with easy access to their loyalty program activities. Design the app with a seamless and intuitive flow that allows customers to view their loyalty points, rewards, and personalized offers effortlessly. 

Real-time updates and synchronization: Enable real-time updates and synchronization of loyalty-related information between OL and the mobile app. This ensures that customers have access to the most up-to-date loyalty program data, such as their points balance and available rewards. 

Leveraging mobile-specific features: Leverage mobile-specific features, such as push notifications and location-based services, to enhance the mobile loyalty experience. Send personalized notifications to app users, informing them about new rewards, exclusive offers, or nearby stores where they can earn or redeem loyalty points. 

Mobile-specific loyalty program features: Implement mobile-specific loyalty program features within the custom mobile app to increase customer engagement and loyalty. This can include mobile-exclusive offers, gamification elements, or interactive features that encourage customers to interact with the loyalty program while on the go.

About OSP

• OSP is part of the Otto Group, one of the world’s largest e-commerce organizations operating in over 20 countries. With its parent company’s backing, OSP has grown from a designated in-house department to a major international tech player and a go-to IT-solutions provider in the DACH market with a global team of over 500 employees
• Having crossed paths through joint work on one of Otto Group clients’ loyalty projects, OSP soon partnered with Open Loyalty permanently with the aim of jointly offering API-first loyalty technology to leading companies in the DACH market.
• The recent result from the partnership = OSP integrated Open Loyalty’s API-first loyalty engine in Limango is Europe's leading family-focused e-commerce platform, with 22 million shopping club members. As a result Limango released their gamified loyalty program to power up their behavior-based loyalty campaigns in the online channels.
• Contact OSP: https://www.osp.de/en/contact

Useful resources

• Open Loyalty user guide: https://help.openloyalty.io/
• Open Loyalty API documentation: https://apidocs.openloyalty.io/
• Case studies: https://www.openloyalty.io/clients