In today’s customer-centric and data-reliant business landscape, a loyalty program is often only as good as the technology that supports it. The main goals of any good loyalty program – new customer acquisition, customer retention, gathering customer data and insights, driving incremental sales, and building brand affinity – all rely on a multitude of integrated technologies to be realized. Companies often lack the resources and expertise to implement the technological capabilities needed to optimally reach customers, provide intuitive accrual and redemption processes, capture data from wide-ranging touchpoints, and effectively interoperate with others like CRM programs and POS systems. As a result, many – if not most – brands turn to third-party providers for their loyalty-related technology solutions.
This makes choosing the right loyalty technology partner one of the most important decisions a company can make. That’s not a superfluous statement; the research bears it out. According to the Forrester Wave Q3 2017 report on customer loyalty technology solutions, the majority (57%) of marketers surveyed indicated that the features and functionality of a loyalty technology solution were the most important factors in selecting a loyalty program service provider. Another 37% indicated that the provider’s overall consistency and reliability were the most important factors.
Clearly, the quality of the loyalty technology provider matters to brands. So how should a company go about choosing the right partner?
First things first. Take a self-assessment to determine your current and desired state.
The first step is to determine the business objectives for the loyalty program as a whole. According to the same Forrester report, most marketers are looking to engage customers (58%) and retain existing customers (56%). More specifically, they want to reach customers at every stage of the customer life cycle, not just at the point of purchase or during a repeat visit. Other priorities may include new customer acquisition or increasing individual customer profitability. These requirements pivot on different technologies or on different aspects of a larger loyalty technology solution. Companies that need end-to-end support for all of these objectives may be looking for a provider that can offer a turnkey managed loyalty solution. Others may already have systems in place to address some objectives but need the technology to deal with specific pain points.
The number-one technology need: data integration
Often, the main need is integration. Take the example of a company with a CRM program but without a comprehensive loyalty solution: While an existing CRM program could provide deep insights into customer behavior – and indeed inform marketing efforts designed to influence that behavior – a comprehensive loyalty solution that incorporates CRM data can expand and improve that capability while also creating customer advocacy. Loyalty technology can leverage a CRM data set to determine the most effective offers, tone, and cadence to deliver to customers, and provide the loyalty framework to engage, reward and inspire them.
Most companies have some sort of CRM program to track and glean information from customer interactions. Some may have a rudimentary loyalty program in place to drive incremental sales, but lack the ability to consistently collect meaningful customer information from it. Others may have developed a strong in-house loyalty program, but need the technical capability to integrate it with a third-party marketing system. Making a proper assessment of what loyalty-related technologies a company already employs is a crucial step to determining which potential partner meets the right needs.
Finding a partner that can deliver that sort of technology will help most companies realize the full potential of their customer relationship and loyalty strategies.
The idea of Connected Loyalty, the convergence of data that is facilitated by the integration of CRM and loyalty technology, is of immense value, not just to marketers, but to customers and loyalty members. Robust, integrated data allows brands to offer what they know their customers are most likely to purchase. And the right technology can ensure that customers are exposed to the offerings they actually want. In this respect, integration paves the way for successful implementation.
A Partner, Not a Vendor
Obviously, a loyalty technology provider can support the implementation of a loyalty program in more direct ways as well, such as managing members, redeeming rewards, and measuring the results (more than half of the companies surveyed by Forrester indicated that these were the primary functions they relied upon). But a technology partner is more than a vendor. While relatively few marketers make a habit of engaging their solutions providers to provide strategy or guidance, according to Forrester, a true loyalty partner will go beyond strictly providing technology for the execution of a loyalty program.
Despite the importance of aligning your brand with expert loyalty partners, loyalty programs should never be entirely outsourced. It pays for a company to be close to its loyalty technology, and by extension their customers. You can have it both ways. In fact, in-house loyalty teams can rely on partner technology solutions that make programs more effective and efficient, without relinquishing control. Having a partner that can help with data integration, customer strategy development, program planning, implementation, and analytics can help marketers achieve their business objectives without distancing themselves from their customers.
Qualities to Look For
With the principles of selecting a loyalty technology partner in place – effective self-assessment, recognizing the value of data integration, and the need for a partnership more than a vendor-client relationship – specific capabilities can be examined. The best technology providers will be able to implement new loyalty campaigns quickly, introduce new features seamlessly, offer innovation at every turn, and be able to scale up to accommodate the development of the business. Even more specifically, a good technology platform will offer omni-channel integration to reach and track loyalty members at every touchpoint, brand matching capabilities to ensure a consistent experience, actionable analytics, rules-based promotions and triggers, and the ability to personalize messaging and offers based on comprehensive data sets.
Finding the Right Loyalty Technology Partner
To recap, here are the 5 keys to identifying the loyalty technology partner that’s right for your business:
- Assess your loyalty needs and overall business objectives
- Take stock of your current technology and systems
- Recognize the value of integration and make that central to your search
- Look for a partner, not just another vendor
- Make sure the loyalty solution has the technical capabilities you need
These qualities and principles provide a solid guidebook for identifying the right loyalty technology partner. A company that adheres to these recommendations will find a technology partner to take their loyalty program to the next level, and to deliver the positive business outcomes they expect.
Is your company looking for a loyalty technology partner? Merkle may be the right partner for you ... learn more about our technology solutions and services here.