5 Loyalty Program Software Mistakes to Avoid

The effort it takes to find software that’s the best fit will pay off for your client and your business.

Loyalty Program Mistakes

Loyalty programs are proven to win customers, increase sales, and boost loyalty. Per research from Annex Cloud, 69 percent of consumers report that loyalty programs factor into their choices when they decide where to make purchases. Furthermore, customers who’ve done business with a brand tend to spend more than first-timers. However, merchants may not see all these benefits if they don’t have the right loyalty program software.

Loyalty Program Benefits for VARs and MSPs

Providing the right loyalty program software is an opportunity for value-added resellers (VARs) and managed services providers (MSPs.) The global market, valued at $7.84 billion in 2021, is growing at a 10.5 percent CAGR through 2030 and a 15.9 percent CAGR in the US.

Grand View Research points out that the growth is due to omnichannel retail expansion and more customer-centric growth strategies. Competitive businesses also leverage artificial intelligence (AI) and machine learning (ML) to gain deeper insights from loyalty data. In addition, the company reports that gamification is also becoming more popular. This requires loyalty program software capable of engaging members, managing games or tasks, assigning badges, and accurately keeping track of rewards and redemption.

5 Loyalty Program Software Pitfalls

The expanding loyalty program software market and your customers’ goals for using these solutions require VARs and MSPs who can find the best fit. Work with your clients step-by-step, from solution selection to implementation, to avoid these missteps.

1Deploying a Solution that Delivers Poor User Experiences

A solution may look great from your client’s point of view, enabling a range of customer interactions and collecting terabytes of data for analysis. But you must encourage your customer to look at it from the consumer’s side.

If the user interface (UI) is awkward, navigating the system is complex, or requires lengthy authentication processes, loyalty program participants may lose some enthusiasm. Consider both consumers’ and your customer’s needs when recommending a solution. Incidentally, that may mean looking beyond the loyalty solution your point of sale (POS) vendor partner provides or third-party integrations with your payment provider’s solution. Put your customer’s needs first to find the solution that delivers the functionality your client needs and the best consumer experiences.

2Being Seduced by Bells and Whistles

With more loyalty solutions available, your client (or your team) may gravitate toward those stacked with the most features. But think it through. An overly complicated system will frustrate your clients, making it harder to delight consumers with quick, easy, and fun loyalty experiences. Integrating the loyalty program software with your client’s IT environment may also mean more work for your team.

If the most feature-rich system is right for your client, proceed. However, if it’s more than what your client needs, advise them to rethink the choice. Loyalty program software that does more also tends to have a higher price tag, so matching the solution to your client’s needs will also have a financial impact. It can also show your client that you have their best interests at heart rather than looking for a bigger deal.

3Overlooking the Importance of Omnichannel and Mobile Versions

Consumers engage on multiple channels and expect one loyalty program to work wherever they make purchases. Furthermore, they expect user experiences to be equally good wherever they order or shop.

Additionally, according to Marqeta, 75 percent of UK, US, and Australian consumers use a mobile wallet, and 60 percent say they’d be comfortable leaving the house only with a smartphone rather than a wallet. Therefore, integration with a mobile wallet or an app can lead to increased business from these customers and position the VAR or MSP who recommended it as a hero.

4Failing to Protect Against Fraud

Rewards that incentivize customers have value, and that value hasn’t escaped the attention of criminals. Loyalty fraud, i.e., using stolen credentials to redeem rewards, costs about $1 billion annually. Therefore, any new loyalty program software you deploy must be a part of a solution that protects your clients and consumers from loyalty program fraud.

5Underplaying Analytics  

Consumer behaviors are constantly evolving and changing, including their attitudes and use of loyalty programs. Therefore, an optimized loyalty program in 2022 may not be the strategy for winning customers in 2024.

Ensure the loyalty program software you provide includes tracking so your clients can see early signs that they need to make changes to keep their customers engaged and happy.

Take a Consultative Approach

The “add-on” view of loyalty is antiquated. Instead, ensure you offer loyalty program software with the features your clients need to craft experiences, engage customers, and build return business.

Additionally, when you advise your clients on the best loyalty program software solution for their businesses, and it helps them reach their goals, you also increase the chances they’ll be loyal to your VAR or MSP business. Make sure any solution you recommend is the best fit for your clients.