Customer Loyalty Program Software

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Buyers Guide

Last Updated: July 19, 2022

You’ve heard some variation of it a million times: It’s up to 10 times more expensive to acquire a new customer than to keep an existing one.

It’s only cliche because it’s true, and even more stats prove the positive impact a loyalty program can deliver to many types of companies, from clothing, sporting goods and toy stores to restaurants, coffee shops and car washes.

“Loyalty programs are proven to increase customer lifetime value by up to 30 percent or more by increasing visit frequency, increasing spend per visit and winning back lost customers.”

-Chris Luo, FiveStars

Whatever your goal, a loyalty program is a great way to engage new customers, retain old ones, increase spending and foster a connection to the brand. Loyalty program software, then, is a crucial tool for optimizing this process.

This guide is designed to help those seeking customer loyalty software learn about the common features, benefits and other key aspects to finding the system that best fits your needs.

Here’s what we'll cover:

What Is Customer Loyalty Program Software?
Common Features of Customer Loyalty Software
The Impact of Customer Loyalty Programs
Strategies for Increasing Millennial Participation

What Is Customer Loyalty Program Software?

The idea is simple: Customers who frequent your business gain points for making purchases or taking other actions, and they can then redeem those points for a wide variety of rewards, such as more merchandise or services from your business.

Loyalty programs are popular with restaurants, airlines and hotels. Because consumers have so many options for where to eat or where to stay, companies can use loyalty programs as a way to create lifelong customers.

Customer loyalty software gives users the ability to customize different aspects of a loyalty program, from creating rules around how customers earn and spend points and how many points they earn per purchase to which customers are VIPs.

Reporting and analytics capabilities for identifying trends in the program round out the core features.

Common Features of Customer Loyalty Software

We’ve created a list of the most common loyalty program software features included in many popular systems:

Rewards management	This feature gives the user control of the rewards structure and details about how points are earned and spent. Businesses can customize the program with gamification to further encourage points-earning behavior, so customers are more likely to engage with the program to earn a new badge or reach a new level.
Customer relationship management (CRM)	The CRM functionality of loyalty software allows users to collect and store customer information, view how many points each has and monitor how they’re using them. Businesses can even send targeted messaging to customers who have a certain number of points to encourage them to make further purchases.
Member portal	Because we live in an omnichannel world, consumers expect the ability to manage their loyalty points and spending wherever they go. Companies often offer online member portals where program participants can view or redeem points and receive notifications about sales or promotions.
Mobile app	A mobile loyalty app is an increasingly common form of a member portal. This gives customers another place to manage points on the device they use all day.
Card management	Many systems include the ability to issue physical loyalty cards or gift cards in addition to digital cards.
Integrations	Most customer loyalty systems can integrate with content management systems, so the functionality works on a company website or social media pages. Some systems also integrate with a point-of-sale (POS) system so customers can see how many points they’ve earned or spend points directly at checkout.

The Impact of Customer Loyalty Programs

Companies that offer loyalty programs are hoping customers are incentivized to return and purchase more products and services by participating. Here are some compelling stats showing the power of loyalty programs:

Eighty-seven percent of shoppers say they want loyalty programs. Consumers are eager to earn points and rewards for shopping with their favorite brands.
Sixty-nine percent of adults are more likely to use their loyalty card if it’s on their phone. Adults are likely to do almost anything more often when it’s done on their phone. If your customers are on their phone anyway, make sure you provide a loyalty app to keep your brand in the minds of shoppers.
Seventy-three percent of loyalty programs members are more likely to recommend brands with good loyalty programs. When your service or product is great, your customers will advertise for you. Make sure your program gives customers flexibility in earning and spending points.
Millennials are 2.2 times more willing than boomers to pay a premium for products and services if they can also earn loyalty and reward points. Millennials are still the primary target audience of many companies for their disposable income and desire for travel. A loyalty program can deliver a boost to sales when marketing toward the most lucrative groups.

Strategies for Increasing Millennial Participation in Hotel Loyalty Programs IndustryView | 2015

Software Advice performed a survey of millennial travelers to learn more about their behavior and participation in loyalty programs offered by hotels.

Likelihood Among Millennials to Post About Hotels on Social Media to Earn Points

We found that 46 percent of millennials tend to join loyalty programs of the companies they’re already loyal to, and more than a quarter (27 percent) are willing to become brand ambassadors and post on social media to earn more points.

Companies can expect millennial consumers to behave similarly with loyalty programs from any type of business. Focus on your customers who are already loyal to the brand and treat them with easy-to-earn and spend points to drive more sales.

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