Loyalty programs have become the rule, not the exception, for retailers and restaurants. And often, they’re also the standard operating procedures for businesses in other verticals and niches, such as dry cleaners, salons, spas, cinemas, sports entertainment venues and even some B2B companies. The primary driver behind using a loyalty solution to manage a loyalty rewards program is that it can be a very effective tool for business growth.
In 2021, the loyalty management market value was nearly $9 billion. That growth is expected to continue at a CAGR of almost 17 percent through 2027, reaching $10.2 billion.
As Research and Markets has stated, demand for loyalty management programs is being driven, in part, by pressures on businesses to take a consumer-centric approach to retain customers.
In the current climate, there isn’t much of a question that value-added resellers (VARs) and managed services providers (MSPs) working in specific verticals should offer loyalty solutions. Some check that box by relying on their point of sale (POS) vendors that provide solutions with built-in loyalty capabilities. But is that enough to meet your clients’ needs and ensure their success?
Understand Loyalty Solutions Features and Flexibility
If the only loyalty program solution you currently provide is part of a POS system you sell, your first move should be to fully understand what it does. Merchants can have different ideas about the best loyalty program type. Some base rewards on purchases and others on the sale amount. Some reward loyal customers with free products or services versus giving them discounts. When your clients or prospects ask if the vendor’s built-in loyalty program features will meet their needs, be ready with the answers.
You also need a good understanding of how flexible and customizable the loyalty solution is. For example, if a merchant has a tiered loyalty system but wants to offer a special reward for making a specific purchase, can the loyalty solution accommodate that?
A part of the decision-making process is to demo the POS system’s built-in loyalty. This will clarify your clients’ questions about the solution’s features and show them how easy or difficult it will be to manage their loyalty program. In addition to exploring dashboards and functionality, evaluate how quickly your client can access data, such as ROI on loyalty rewards and customer behaviors, and draw insights to help them run their businesses more intelligently.
You must also communicate any added costs for using the POS vendor’s loyalty module. Make it clear how that investment compares to choosing third-party loyalty solutions for your client.
Integration, Integration, Integration
Suppose your client determines that built-in loyalty functionality won’t meet their requirements and they need to use third-party loyalty software. In that case, ensuring the solution integrates with their POS, payment, and other business applications is vital.
A standalone loyalty solution not only silos data; it also undermines customer experiences and operational efficiency. An integrated loyalty solution will enable consumers to automatically earn points with purchases and easily redeem them at the checkout. For omnichannel businesses, integrated loyalty will ensure consistent points information is available regardless of how consumers shop – and they can just as easily earn or redeem points whether they’re making purchases in physical locations, online, or through an app.
Loyalty solutions integrated with the merchant’s customer relationship management (CRM) software can streamline marketing. For example, reaching loyalty program benchmarks or program activity (or inactivity) can automatically trigger targeted marketing messages that can influence customer behaviors – without hours of analysis and manually sending emails or texts.
Keep Your Options Open
When you provide solutions and services to businesses in highly competitive industries, some of your clients may not be satisfied to be boxed in with a single solution choice to manage a loyalty rewards program.
As a trusted business advisor, you must tailor loyalty solutions to meet your clients’ needs precisely. If you can achieve that with the loyalty program built into the POS system you sell, great. However, if your client needs something different, you must be ready with options.
Focus on the best solution and customer experiences, and create the best impression of your business as a knowledgeable and valuable partner.