Loyalty Software Buyer’s Guide 2025: Types, Trends, and How to Choose the Best Platform

If you’re in marketing or product and you’re thinking about launching or upgrading a loyalty platform, here’s the truth: choosing the right loyalty software can either accelerate your growth or slow it down for quarters. Pick the right platform, and you’ll drive better retention, capture cleaner customer data, and move faster than your competitors. But the loyalty tech landscape in 2025? It’s complex.

Loyalty is no longer a side project. According to Gartner’s Market Guide for Loyalty Program Vendors, over 21% of 2023 marketing budgets were dedicated to loyalty and advocacy. Even more telling? 41% of CMOs increased loyalty spend year-over-year.

In this guide, I’ll cut through the noise and break down:

• The main types of loyalty software platforms.
• The tech trends shaping the future of customer retention.
• How to choose the right fit based on your team, goals, and stack.

Loyalty software technology trends shaping customer retention in 2025

1. Loyalty programs are becoming powerful data engines

The best loyalty platforms today don’t live in a silo. They integrate directly with your CRM, CDP, e-commerce engine, and marketing stack. And they do more than just track redemptions. They:

• Sync customer data across all touchpoints in real time
• Trigger personalized offers automatically
• Use AI to segment audiences and predict behaviors

According to Everest Group, loyalty systems are evolving into intelligent engagement ecosystems powered by data, automation, and AI. This is the future: loyalty as a core engagement layer, not a bolt-on rewards widget.

Learn more: Building Customer Loyalty with CDP and CRM-Driven Personalization

2. The rise of AI and automation in loyalty software platforms

Modern loyalty platforms are no longer judged simply on whether they can track points, but on how intelligently they can anticipate and shape customer behavior. Machine learning is being applied at every stage of the loyalty journey:

• Churn prediction: Flagging at-risk customers early, before they disengage, and triggering interventions that feel proactive rather than reactive.
• Next-best offer recommendations: Matching the right perk or incentive to the right individual at the right time, with precision that manual segmentation could never achieve.
• Automated campaign optimization: Continuously learning from performance data to refine rewards, tiers, and promotions in real time.
• Segment-specific targeting: Going beyond demographics to adapt rewards dynamically for micro-segments defined by behavior, context, and value.

Some tools even generate full campaign strategies based on your audience data. As the demand for hyper-personalized loyalty experiences grows, AI will be what makes it all scalable.

3. Self-service loyalty software: Marketers take the wheel

The old loyalty setup? Hire a consultancy, run a six-month project, and pray it works.

In today’s reality, marketing teams want control, speed, and flexibility. And the tech has caught up. Gartner reports a growing shift toward self-service loyalty tools that let marketers:

• Launch and edit programs with drag-and-drop builders
• Manage campaigns from a central dashboard
• Get AI-driven insights without needing data scientists

The result? Faster launches, more experimentation, and loyalty strategies that can actually keep pace with your business.

Types of loyalty software solutions: LMSPs, multisolution platforms, pure-play engines

Not every loyalty platform is built with the same philosophy. Some are full-service setups where a vendor becomes almost an extension of your marketing team. Others give you the tech tools and let your own team take the wheel.

Broadly, Gartner breaks loyalty platforms into three categories:

Let’s unpack each category – who they’re best for, their strengths, and the trade-offs to be aware of.

1. Loyalty management service providers (LMSPs)

What they offer?

LMSPs are the “done-for-you” option. You don’t just get a loyalty platform, you also get consultants, campaign managers, and analysts to design, launch, and operate the program for you. Many LMSPs have agency roots, which means they bring proprietary consumer data and industry-tested playbooks along with their tech.

Why brands choose them?

If you don’t have an internal loyalty team, LMSPs provide the expertise you’re missing. They’re especially popular with enterprises running large or complex programs – think retail groups with multiple brands, travel companies with coalition partners, or any brand where customer analytics and segmentation are critical.

Pros

• Turnkey execution: They handle the strategy, campaigns, and reporting.
• Access to proprietary data models that can sharpen segmentation and acquisition
• Industry-specific templates and best practices built in.

Cons

• Less day-to-day control for your team. Iterations often go through the vendor, which can slow down testing.
• Service-heavy pricing – expect platform fees plus ongoing service costs.
• Risk of dependency: switching later can be harder if the vendor is running much of your program.

Who it’s for?

Brands that want a white-glove solution, lack in-house resources, or simply want the peace of mind that comes with outsourcing loyalty to experts.

2. Multisolution loyalty platforms

What they offer?

Multisolution providers embed loyalty into a larger ecosystem – often a marketing cloud, CRM, or CDP. Instead of buying a standalone loyalty system, you get loyalty as one module in a suite that also manages campaigns, data, and analytics.

Why brands choose them?

These platforms shine when you need a single customer view and the ability to use loyalty data across all your channels. For example, Salesforce Loyalty Management is designed to feed directly into Salesforce Marketing Cloud journeys, so tier changes or point balances can instantly trigger emails, push notifications, or ads.

Pros

• Unified profiles: All loyalty activity flows into your broader customer dataset.
• Frictionless channel orchestration: Loyalty data powers personalization across email, SMS, push, and web.
• Strong analytics: Dashboards and machine learning to track CLV, churn risk, and campaign ROI.

Cons

• Loyalty is just one module – it may not be as deep or customizable as a specialist tool.
• You run the program yourself; vendors provide tech, not campaign management.
• Suites often nudge you to use their native tools, which can limit flexibility if you already have best-in-class point solutions.

Who it’s for?

Companies with marketing and data teams in place, looking to unify data and orchestration rather than outsource operations. Ideal if you’re already invested in a CRM/marketing cloud ecosystem.

3. Pure-play loyalty platforms

What they offer?

Pure-play loyalty platforms are the specialists. They don’t try to be all-in-one marketing suites – they focus on loyalty engines built with APIs, SDKs, and real-time rules. Increasingly, they’re branded as promotion engines: one backend that powers loyalty points, referrals, vouchers, discounts, and gamified campaigns.

Why brands choose them?

Pure-plays are perfect if you want flexibility and control. Instead of adapting your strategy to fit a platform, you design the loyalty logic you need and wire it directly into your apps, website, or POS. They’re also the fastest to experiment with – many vendors highlight that you can launch campaigns in days, not months.

Everest Group points out that by 2025, enterprises are prioritizing modular, real-time, AI-enabled loyalty systems – an area where API-first engines are leading.

Pros

• Composable by design: Integrate loyalty into your existing stack, no lock-in.
• Real-time: Customers earn/redeem instantly across channels.
• Unified incentives: Manage loyalty alongside coupons, referrals, and promotions from one place.

Cons

• Limited managed services – you’ll need in-house marketers and developers.
• Integration effort is required upfront (though many provide SDKs and sandbox tools).
• You’re responsible for strategy, creative, and campaign ops.

Who it’s for?

Digital-native brands, tech-savvy retailers, or enterprises with strong product/engineering teams who see loyalty as a core part of the product experience, not a standalone program.

Promotion engines: A modern alternative to traditional loyalty software

Before we wrap up, it’s worth calling out a category that doesn’t sit neatly in Gartner’s three buckets but is reshaping the market: promotion engines.

Technically, you could classify them as a subset of pure-play platforms. But the way they position themselves is quite different – less about running a single, predefined “loyalty program,” and more about powering all types of incentives through one flexible backend.

Think of it as loyalty reimagined: not just points and tiers, but coupons, referral rewards, gift cards, cart-level promotions, gamified challenges, and yes, loyalty points – all unified in a single system.

Why promotion engines matter?

Traditional loyalty platforms are built around managing a program: enroll members, track points, redeem rewards. Promotion engines, on the other hand, are built around incentives. That means they can support loyalty programs if you want them to, but they’re just as comfortable running a flash discount, powering a referral bonus, or enabling time-limited VIP perks.

For brands with modern, digital-first strategies, this flexibility is huge. Loyalty no longer lives in a silo; it blends into your product, your e-commerce flows, and your customer experience. An API-first promotion engine acts like a toolbox for customer engagement: configure incentives however you want, then distribute them in real time across apps, stores, and marketing channels.

This aligns closely with the wider composable commerce movement. Instead of being forced to use a suite’s built-in email or CMS, you keep your preferred tools – and the promotion engine just plugs in via APIs.

Learn more: Building Loyalty Programs in a Composable Architecture – A Practical Guide

What makes promotion softwares different?

Here are a few reasons promotion engines are gaining ground:

• Ultimate flexibility: You can create almost any incentive mechanic, from workout challenges in a fitness app to dynamic pricing for top-tier customers. Nothing locks you into a rigid “points-only” model.
• Real-time orchestration: APIs and webhooks let incentives trigger instantly across touchpoints – whether it’s a checkout page, a mobile wallet, or a support chat.
• Dual usability: Marketers get drag-and-drop dashboards to launch campaigns quickly, while developers get APIs and SDKs to weave logic into apps or sites. Both teams collaborate without bottlenecks.
• Faster iteration: You can A/B test offers, tweak rules, or spin up campaigns in days, not months – a major edge in fast-moving markets.
• Ownership and portability: Because data and rules flow through APIs, you’re less locked into a vendor’s ecosystem. If you outgrow a platform, migration can be simpler than with monolithic suites.
• Usage-based pricing: Many promotion engines offer transparent, pay-as-you-grow pricing (e.g., based on API calls or active customers), which scales more predictably than traditional license + services models.

Who they’re for?

Promotion engines are especially attractive for:

• Digital-native brands that see loyalty as part of their product, not just a marketing layer.
• Tech-savvy teams with the resources to design their own mechanics and integrate APIs.
• Enterprises experimenting with composable stacks, where flexibility and modularity matter more than all-in-one suites.

If your goal is speed, experimentation, and creativity, a promotion engine is a natural fit.

How to choose the right loyalty software vendor?

By now, you know the main categories of loyalty platforms – LMSPs, multisolution suites, pure-play engines, and promotion engines. But knowing the landscape is just the first step. The real challenge is figuring out which approach fits your business best.

The decision boils down to a few factors: your team’s expertise, your data maturity, how much control you want, and whether you have any special program requirements. Here’s a framework to help you make the right call.

1. Evaluate your team and resources for loyalty software success

Ask yourself: Who’s actually going to run this program?

• If you don’t have loyalty expertise in-house (no CRM managers, data analysts, or loyalty strategists), an LMSP might be the safest bet. They’ll bring strategy, creative, and operations to the table.
• If you have a capable marketing/CRM team ready to manage campaigns and data, a platform (multisolution or pure-play) will give you more control and agility.

Gartner notes that companies without in-house experience often lean on LMSPs for turnkey support, while brands with stronger teams prefer self-service tools.

2. Check your data maturity before choosing loyalty software

Your data strategy is often the deciding factor:

• Struggling with siloed data? If you lack a single customer view, a multisolution loyalty platform (often CDP + loyalty) can unify data and power personalization.
• Already have a solid data stack? If you’ve invested in a CDP, CRM, or data warehouse, a pure-play API loyalty engine (or promotion engine) can plug into what you already have without duplicating capabilities.

Everest Group highlights that leading enterprises are increasingly treating loyalty platforms as data and engagement hubs – but only when the integration works with no troubles.

3. Integration vs. out-of-the-box

• Prefer convenience? LMSPs and multisolution suites come with prebuilt templates, pre-integrated channels, and sometimes even campaign delivery tools. You can launch quickly without stitching tools together.
• Prefer modularity? Pure-plays and promotion engines are designed to integrate with your existing systems. If you already have best-in-class tools for email, personalization, or analytics, you’ll likely prefer this route.

Think of it this way: do you want a Swiss Army knife (all-in-one, but maybe not the sharpest blade for each function), or a set of specialized tools you connect yourself to?

4. Decide how much control you need over your loyalty software

This is where strategy meets culture.

• Want agility? If you want to experiment, A/B test, or tweak rewards without waiting on a vendor, go for a self-service platform (multisolution, pure-play, or promotion engine).
• Prefer to hand off execution? An LMSP’s managed service model will suit you better, but expect slower iteration cycles and higher service costs.

Remember: control = speed and customization, but also responsibility. Outsourcing = less effort, but also less flexibility.

5. Map your unique loyalty program requirements to vendor capabilities

Every brand has unique needs. Make sure you map yours out before shortlisting vendors. For example:

• Coalition or partner programs → LMSPs or certain enterprise multisolution tools.
• Offline purchase tracking (receipt scanning, POS integrations) → ask about APIs or connectors.
• Mobile wallet integration (Apple Wallet/Google Wallet) → increasingly common in modern pure-play and promotion engines.
• Gamification, NFTs, or blockchain rewards → niche features, usually found in cutting-edge pure-plays or specialized startups.

Your “must-haves” list will quickly eliminate vendors who can’t deliver on core requirements.

6. Evaluate scalability, compliance, and support

No matter the type, your vendor must:

• Handle peak loads (think Black Friday spikes).
• Ensure compliance with GDPR, CCPA, and regional data laws.
• Provide strong SLAs and transparent support models.

Loyalty programs hold sensitive personal data and financial liability (unredeemed points, gift cards). Don’t cut corners here.

7. Test loyalty software with trials and customer case studies

Demos are useful, but hands-on trials are better. Let your marketers try the UI, let your developers hit the APIs, and ask the vendor for real-world case studies in your industry. Speak to reference customers – did the platform scale, was the support reliable, did it deliver ROI?

Final thoughts: The future of your loyalty software

Choosing loyalty software isn’t just a tech decision. It’s a strategic choice about how you want to manage customer relationships. To recap:

• LMSPs → full-service partners for brands that want expertise and outsourcing.
• Multisolution suites → data-centric platforms that unify loyalty with marketing.
• Pure-play engines → flexible, API-first tools for teams that want control.
• Promotion engines → the modern, composable alternative, treating loyalty as part of a broader incentive strategy.

Across all types, the trend is clear: customers expect loyalty programs to feel more personal, experiential, and omnichannel. Future-ready loyalty platforms will connect brands and customers across the entire journey – not just track transactions and AI and automation will be central to scaling personalization in loyalty by 2025.

The good news? With today’s technology, you don’t have to settle for points and punch cards. You can build loyalty programs that truly connect – balancing data, speed, and creativity to drive retention in 2025 and beyond.