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All About Customer Loyalty Program Software

By TechDogs Editorial Team

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Overview

Companies who want to motivate new customers, retain existing ones and woo past ones back into the fold, can benefit from Customer Loyalty Program Software. Wait, didn’t we just describe every business on the planet! Well, loyalty program software helps businesses create, manage, track and optimize their loyalty programs. This is about so much more than technology.

It’s an inspiring tale of human ingenuity and perseverance akin to Homer’s epic poem, The Odyssey. We’re pretty sure Odysseus would’ve loved to get his hands on some Customer Loyalty Program Software. If you’re intrigued, read on to learn more. We promise it will be highly rewarding!
TechDogs-"All About Customer Loyalty Program Software"-By Zeus! This Tool Is Amazing!
Who doesn’t love to be rewarded for their loyalty? No one, that’s who! The concept of rewarding someone for the virtue of loyalty is nothing new. It spans centuries. Take Penelope, the famous wife of Odysseus in Homer’s epic poem, The Odyssey. In this great work of literature, Penelope faithfully waited for her husband’s return to Ithaca for twenty years and (spoiler alert!), she is rewarded when he ultimately returns to her in one piece. We’ve been enthralled with this story of true love, loyalty and reward for nearly 3000 years! #WeLoveOdyssey3000

Customer loyalty programs, while not quite as epic as Penelope’s 20-year vigil for her husband, leverage our natural desire to receive acknowledgment (and rewards) in exchange for loyalty. Businesses use loyalty programs to strengthen customer relationships and incentivize purchases. These days, the entire process can be digitized and managed with a Customer Loyalty Program Software.

Let’s learn more about it!
 

What Is Customer Loyalty Program Software?


Businesses use Customer Loyalty Program Software to create, implement and track customer retention initiatives. Loyalty programs kick in after a customer makes a purchase or interacts with the business in some way.

That’s when the software goes into high gear by identifying customers and creating the framework for deploying loyalty incentives and rewards. We’ll get into the details of what that looks like in a minute. For now, imagine you are Penelope, Queen of Ithaca, waiting for your beloved Odysseus for twenty years.

Now, let’s imagine that Customer Loyalty Program Software exists to monitor your behavior for two decades, tracking any engagement and interaction you make that shows your unfailing dedication to Odysseus.  

Maybe you reject new suitors because you don’t want to betray your husband. That’s 100 loyalty points! Maybe you delay remarriage by taking three years to weave a garment that should take you, at most, a month or two. That’s another 200 loyalty points! When you get enough points logged into your loyalty account, your long-lost husband returns. (Take this analogy with a grain of salt!)

Customer Loyalty Program Software facilitates loyalty management with a collection of tools and technologies that help businesses continually engage with their customers and inspire them to return to conduct more business.

Now, a brief history of where it all started.
 

A Brief History Of Customer Loyalty Program Software


While not as ancient as Homer’s The Odyssey, customer loyalty programs can be traced back to the 1700s. They emerged as premium marketing programs with American retailers who handed out copper coins that could be redeemed later for actual goods. This ensured ye old shoppers would return to ye old store again and again.

Over a century later, stamps were distributed widely to consumers by an American catalog retailer, Sperry & Hutchinson (S&H). The stamps could be redeemed for S&H products. Around the same time, Betty Crocker, an American food company, introduced box-top coupons that customers could collect and redeem for rewards.

By the mid-to-late 1900s, card-based loyalty programs and point aggregator programs emerged, allowing customers to accumulate rewards over time. They could redeem their points with physical cards scanned at checkout or when they purchased a product or service using a credit card. Most of the large-scale programs were managed by equally large-scale companies (American Airlines’ famous Frequent Flier program, for example.) However, now anyone can get in on the loyalty business thanks to dedicated software.

In the 21st century, loyalty programs entered the digital age. Coupon cutting, box top saving and plastic loyalty cards were no longer necessary to track customer engagement and purchases. Now we have Customer Loyalty Program Software which uses mobile apps and customer account creation to digitally track and manage rewards programs.

Want to know how it works? Read on, stoic adventurer, read on!
 

How Does Customer Loyalty Program Software Work?

 
Customer Loyalty Program Software contains features that enable businesses to create, customize and manage all aspects of a loyalty program.

Let’s say you’re a king that’s stranded many leagues from your home and you realize that it might take you five, ten or even twenty years to return. You are (understandably) concerned that people will move on without you. You decide to initiate a loyalty program to keep people from turning to a rival king in your absence. You are, in fact, Odysseus and you’re trying to keep your citizens engaged and interested in you!

You are at your wit’s end but all is not lost! You decide to invest in Customer Loyalty Program Software which can help you remain relevant to your citizens and keep them engaged with your brand. How? With the following features.

Common features
 included in this software are:
 
  • Campaign Design

    Define your loyalty program reward structure (e.g., will it be points-based, have different levels, include badges or tiers?). A good loyalty program solution gives you lots of ways to design your loyalty campaign so that it works for your business.

  • Loyalty Rewards Management

    Manage all aspects of the rewards/redemption process across every customer touch point (in-store, online, mobile, etc.)

  • Membership Management And Monitoring

    A good tool comes with a handy dashboard that lets you track and monitor loyalty points for members on an individual or aggregate basis.

  • Customer Relationship Management/ Integrations

    Loyalty program software should integrate with all relevant data platforms and customer systems including point-of-sale (POS) and Customer Relationship Management (CRM) systems. This enables them to automatically add and redeem rewards points/ coupons.

  • Member Portals

    Your perfect tool should include a feature for creating member portals which allows customers to track their loyalty progress and stay engaged with your business. Portals let members view program details like recent transactions, tiers, benefits and points.

  • Mobile Capabilities

    We love our phones, so mobile accessibility is an important feature that enables mobile access to the program from mobile devices. It’s particularly handy for Odysseus’s loyal warriors who are constantly on the move!

  • Performance Analytics (Tracking And Reporting)

    A dashboard that lets you track performance in real-time from any device is also important so you can optimize and tweak your loyalty program after it’s launched.


With so many features, it is hardly surprising why businesses use Customer Loyalty Program Software – but here’s a brief on why businesses need this tool.


Why Do We Need Customer Loyalty Program Software?


Customer loyalty is a fickle thing, particularly these days when customers can window shop instantly from their computers and phones. It’s also no secret that consumers love rewards. Over 70% of consumers in one recent study said they favor companies that offer rewards and nearly 60% will stay loyal to brands that understand them. Like Odysseus, we all want to be recognized, acknowledged and loved.

To this end, loyalty program software makes it easy for businesses to keep new customers engaged, retain existing customers and win back past customers. A loyalty program can also increase revenue by incentivizing customers to spend more, increasing visits to your Ecommerce store (if you’re a retailer) and encouraging customers to recommend your brand, business or product to their network.

Well, Odysseus managed to overcome all odds and return to his wife after 20 years for a happy reunion – that's what we call a happy ending! However, with Customer Loyalty Program Software you won’t have to wait that long for a happy ending – read on!
 

The Future Of Customer Loyalty Program Software

 
The future looks bright for Customer Loyalty Program Software. The global loyalty management market size is expected to grow from an already healthy $7.6 billion USD in 2020 to $15.5 billion USD by 2025. Many things are contributing to this growth, not the least of which is the rapid adoption of multichannel/omnichannel programs that span devices, channels and campaigns.

As loyalty programs evolve and are embraced by more businesses, new trends are emerging. Loyalty partnership between brands like Lyft and Hilton Honors is one example. The program gives Hilton Honors members reward points whenever they ride with Lyft. VIP programs that require paid membership fees in exchange for additional rewards and perks are another hot loyalty program trend. According to McKinsey, consumers who pay to participate in loyalty programs tend to spend more than those who don’t, make more frequent purchases from a brand and are more likely to choose the brand over competitors. Take notes, marketers!

Lastly, the wide adoption of loyalty programs is being driven by consumer behavior. Customers like loyalty programs even though they’ve become much more likely to switch brands. A recent McKinsey study found that 35% of US consumers tried a new brand in 2020 and 77% have tried new shopping behaviors. Maintaining loyalty, interest and engagement is a tough job (just ask Odysseus!). Thankfully we have Customer Loyalty Program Software to ensure your customers stay happy, engaged and loyal. With this, our friends, this epic journey is at an end. Go forth and generate loyalty!
 

To Sum Up


It’s a famous saying that “Satisfaction is a rating. Loyalty is a brand.” To build a brand and to be valued by your customers as one, you need to put effort into customer retention. Just like Rome or the plan for robbing the Bank of Spain, customer loyalty too cannot be created in a day. It requires constant effort and to streamline and manage these efforts right, you need Customer Loyalty Program Software (and a well-thought-out customer loyalty program, of course!).

Frequently Asked Questions

What is Customer Loyalty Program Software?


Customer Loyalty Program Software is a digital tool used by businesses to establish, execute, and monitor loyalty initiatives aimed at retaining customers. These programs typically activate following a customer's purchase or engagement with the business. The software's primary function is to identify customers and establish a structure for deploying loyalty incentives and rewards. It serves as a comprehensive platform for managing customer loyalty efforts, enabling businesses to foster ongoing engagement and incentivize repeat purchases effectively.

How does Customer Loyalty Program Software work?


Customer Loyalty Program Software operates through a set of features designed to facilitate the creation, customization, and management of loyalty programs. These features include campaign design, which allows businesses to define reward structures tailored to their specific needs, such as points-based systems or tiered rewards. Additionally, the software enables the management of loyalty rewards, membership monitoring, and integration with other customer systems like point-of-sale and customer relationship management platforms. It also often includes mobile capabilities for accessibility and performance analytics for real-time tracking and optimization of loyalty programs.

Why do businesses need Customer Loyalty Program Software?


Customer loyalty is vital for businesses in today's competitive landscape. Customer Loyalty Program Software streamlines and enhances efforts to engage, retain, and reward customers, ultimately driving revenue and brand loyalty. By offering rewards and incentives, businesses can keep customers engaged, encourage repeat purchases, and foster brand advocacy. Loyalty program software provides businesses with the tools they need to keep pace with evolving consumer preferences and behaviors, ensuring that they can effectively cultivate and maintain customer loyalty in a dynamic marketplace.

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