Customer Loyalty Program Software

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:

Reviewers' Choice
What Is Customer Loyalty Program Software?
Common Features of Customer Loyalty Software
The Impact of Customer Loyalty Programs
Strategies for Increasing Millennial Participation
Recent Events You Should Know About

Reviewers' Choice

Reviewers' Choice Products

Our Reviewers’ Choice list shows the five highest user-rated software solutions for Customer Loyalty when adjusted for total number of reviews and recency of reviews.

If a software solution has more reviews, and more recent reviews, we value those ratings more highly than a product with fewer, older reviews. This is because is it much harder to get 100 five-star reviews than it is to get 10.

We also know that software vendors continually tweak and update their product, so we believe that more recent reviews tend to be more accurate.

To determine which products made the final cut, we looked at how users rated each solution's:

• Overall performance,
• Ease of use, and
• Customer support

A solution can make the Reviewers' Choice top five in all three categories, or just one or two. All software solutions in the Reviewers' Choice have at least 10 reviews from real software users. The final products are listed in alphabetical order from left to right.

For more details on how we selected our Reviewers' Choice, read the full methodology.

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:

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.

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.

Recent Events You Should Know About

Hilton revamps loyalty program akin to airlines. Hilton Honors, the hotel giant’s loyalty program, has undergone some changes. Members can now book using a combination of money and points, pool points and even spend their points on Amazon.com. This change highlights a new trend of making loyalty programs more flexible for consumers.

Generation Z presents challenges for brand loyalty. Many statistics for millennial consumers are available, but marketers are now trying to decipher how the next generation behaves. Early studies show that Generation Z, those born after 1994, seem to be less brand loyal and prefer to spend money on experiences rather than material goods.