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Must-have Features of a Loyalty Management Software

Mike Sędzielewski
Mike Sędzielewski
May 24, 2018
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Must-have Features of a Loyalty Management Software

Table of Contents:

  1. What is a Loyalty Management Software?
  2. Loyalty Management Software — Benefits.
  3. How to choose your Loyalty Management Software?
  4. The top characteristics of a good Loyalty Program Management Software
  5. Must-have features of Customer Loyalty Management Software.
  • CRM system integration.
  • Dynamic segmentation.
  • Extensive rewards catalog.
  • Eligibility rules.
  • Loyalty program tiers.
  • Loyalty rewards stacking.
  • Omni-channel distribution.
  • Self-serve customer portal.
  • Notifications.
  • A/B testing and analytics.
  • Personalization.
  • Allowing offline redemptions.
  • Scalability and maintenance.
  • Compliance with legal norms and standards.
  • Anti-fraud measures.
  • Branding.
  • Affordability.
  • API-first build.
  1. Key takeaways

What is a Loyalty Management Software?

Loyalty management software is software that lets you create, launch, manage, and track your loyalty programs. A good out-of-the-box loyalty management software, as opposed to in-house built solutions for customer loyalty program management, helps you run your loyalty programs more efficiently. 

Read more about why you should invest in a good loyalty management software here.



How to choose your Customer Loyalty Software?

Selecting the best loyalty program software provider shouldn’t be something that you do in between meetings. You need to sit down and dig deep into the functionalities offered by different loyalty providers. Before making your choice, sketch out what goals should your dreamed loyalty program meet, what mechanisms you want to set in place, and who is your target audience. And remember, if you are looking for a holistic solution, look for a loyalty platform that goes beyond collecting points, but can act as your CRM and assist you in hosting different incentives. You need to delve into the loyalty management software features before making the right choice. To help you with choosing the right software, this article will give you a concise list of features to look for in the loyalty software of your choice. 

The top characteristics of a good Loyalty Program Management Software

  • It’s easy to integrate and implement within your current framework.
  • It’s quick and efficient in testing.
  • It’s scalable and manageable.
  • It lets you personalize rewards, eligibility criteria and timing of your incentives.
  • It respects legal norms and is compliant with personal data policies.
  • It can be integrated with your messaging channels, or you can create new customer touchpoints with it. 
  • It’s consistent with your brand image.
  • It’s geared up towards security. 
  • It’s affordable.

This was a quick overview of characteristics you should be looking at when choosing the right customer loyalty software. Let's have a look at specific, key features a good Customer Loyalty Software should have.

Must-have features of a loyalty management system

Selecting the best customer loyalty software is a tall order, but luckily there are a few features to look for to ensure that you’ve made the right choice. Here is the ultimate list of features your loyalty platform should have:

1. CRM system integration

To connect your campaigns with customer attributes, you need to make your customer loyalty program management system aware of them. This means that you need to sync it with your CRM software. The best reward program management software should be capable of storing every data relevant to your offered incentives.

2. Dynamic segmentation 

Dynamic segmentation adds your customers to the relevant segment based on their data. This means every customer that meets the requirements will be assigned to the appropriate segment and access the relevant campaigns. Dynamic segmentation helps marketers target specific customer segments in real-time, saving them time on doing the segmentation manually. With the advanced set of filters, marketers can split the customer base into fine-grained groups like “dormant,” “offer X product,” “anniversary” and so on.

3. Extensive rewards catalog

Your customer loyalty program management system should support the following reward types:

  • Points – marketers should be able to define how customers earn points. The platform should support the most common shopping events, but also custom ones like points for social media activity or rewards for providing feedback. You should also have a possibility to choose between fixed and proportional points assignment. For example, if a customer made an order for min. 100$, then give 2 loyalty points for each 1$ spent.
  • Gamification – the system should provide out-of-the-box milestones which marketers can use to build powerful reward programs. The milestones should be based on time, frequency, revenue, earned points or any other custom “currency”.
  • Multiple rewards – as personalized rewards are the best engagement artifacts, your loyalty software should cover several types, including coupons, gift cards, stored discounts, cashback, loyalty points, or any “currency.” However, to control the promotional budget, program designers should have the ability to limit the cart volume and structure or set the reward expiry date.

Needless to say, these parameters should be easy to tweak from the UI, so that marketers don’t have to bother the development team every time they want to modify anything in the loyalty program. 

4. Eligibility rules

A good customer loyalty software lets you set up fine-grained validation rules. It is not enough to set the rules and hard-code them once. You should be able to change them as you learn more about your customers and for special promotions.

In general, you should be able to set the validation rules based on:  

  • Customer attributes

For example, only customers in Germany can join your loyalty program.

  • Customer purchase history 

For instance, only customers who have spent over 2000$ in your store can become loyalty program members.

  • Order structure and volume

For example, only orders above 50$ allow the loyalty points redemption.

  • Custom Events 

For instance, everyone who has subscribed to the newsletter gets 50 loyalty credits.

5. Loyalty program tiers

Creating tiers (levels) can help make your customer loyalty program more interesting for the customers, adding a gamification effect. Customers could be qualified to various loyalty levels based on their purchases or custom events. 

The levels could differ by:

  • The rewards catalog – for example, three rewards to choose from for the basic tier, 20 rewards for the VIP tier.
  • The rewards worth – for example, samples for the basic tier, full-size products for the VIP tier.
  • The earning rules – for example, 2x the points for VIP tier.
  • Expiry dates – for example, longer expiry date of the points for higher tiers.



6. Loyalty rewards stacking

The loyalty rewards stacking feature defines allowed and forbidden discount combinations that give you even more space for personalization. For instance, you can offer two types of loyalty rewards: discounts and gift card credits and disallow using both for the same order. You should be also able to define which loyalty rewards should or shouldn't be combined with other promotions.

7. Omnichannel distribution

An omnichannel approach to loyalty campaigns isn’t an option anymore – it’s a must. We can talk here about in-app messages, dedicated landing pages, Google & Facebook Ads, web channels, or SMS. You probably already use some 3rd party communication providers to activate these channels, so your loyalty program software should be easily integrated with them through a plugin, Zapier integration, or API. 

8. Self-serve customer portal

Apart from development effort, running reward programs requires operational help from customer agents. Somebody has to answer dozens of customer questions related to terms of conditions and rewards. To reduce the load of this task, your rewards system should provide customers with an easy way to monitor their performance and to redeem rewards. A self-serve customer portal, or a digital wallet integrated with your online shop or app, where the customers see their progress and previous rewards, is a smart solution. Because there’s a high chance people will be visiting it often, marketers can use this space to advertise other, relevant offers.

9. Notifications

A great feature of excellent customer loyalty software is reminders. To cut through the noise and avoid being accused of spamming your customers, you should send relevant and informational notifications about your reward program details or their progress. Smart reminders are based on real-time customer attributes and are timely displayed non-intrusively on a device of choice.

10. A/B testing and analytics

You should be able to run multiple A/B tests and iterations to try out different variations of your rewards program before the launch. You need to remember that every marketing campaign is an experiment. It starts with a hypothesis, goes through a small-scale test in the field, and ends up with a global launch. That’s why you need a tool that allows for multiple tests to see what incentives and what kind of workflow has the biggest chance of success for your particular audience. Iterations are made possible by detailed monitoring and tracking tools that should be transparent and readable for both marketers and developers.  

11. Personalization

Invest in a loyalty program software that allows you to personalize your incentives quickly. What makes a good personalization? When talking about customer loyalty programs, personalization should cover three areas: rewards, eligibility, and timing.

  • Rewards personalization

If possible, you should expand beyond the standard point-based model with material rewards. Instead, try out rewarding customers with discounts, free samples, gift cards, cash payouts, or free delivery. Track customer trends, send surveys, and monitor customer attributes to learn what incentive would work best for a particular customer segment.

  • Eligibility rules personalization

Another critical point is to define who precisely and on what conditions should get the offer. Opt for loyalty program software that allows you to quickly impose and change up redemption rules based on new customer trends, product and order attributes, and budget constraints.

  • Timing personalization

The last bit of personalization is timing. You can push customers to action by creating urgency with expiry dates or strategically placed countdown timers. Also, calendar-driven rewards programs for occasions such as holidays, birthdays, or anniversaries are just a brilliant and natural way to entice customers throughout the year.

12. Allowing offline redemptions 

Your loyalty program should have offline redemptions enabled. This could be solved via a loyalty app or QR codes, for example. You could also use Google Pay integration, if the loyalty platform has native integration with it, to connect your rewards program with the Google Pay app to allow offline redemptions.

13. Scalability and maintenance

The beginnings are always the hardest, but in the context of a loyalty program, the opposite is usually true. The launch is the easiest part, followed by a tidal wave of requests, questions, inevitable complaints, and support tickets. Manual redemption and addition of points or withdrawal of a batch of coupons or points is yet another pain in the neck for your customer support agents. 

There are several features of good customer loyalty software that can help you to shoulder the burden:

  • Transparent authorization workflow and user access for quick program adaptation.
  • Audit logs for data integrity and insight into customer/user activities.
  • Single customer view for enhanced personalization and support. 
  • Customer cockpits with points/rewards displayed to take the heat off customer support agents.

14. Compliance with legal norms and standards

If you lack the legal know-how, seek the advice of a professional legal advisor as loyalty programs tend to be like a can of worms. But, there are several legal provisions that all good loyalty software should meet. First of all, it should allow you to create clear and concise terms and conditions of your incentive. Another significant issue is data privacy, primarily if you operate in the GDPR or CAN-SPAM applicable region. Opt for loyalty software that allows you to handle customer data in a transparent way. Also, go for a loyalty provider that lets you create and manage marketing permissions and opt-in consents. Otherwise, you can expect a big chunk of your messages going straight to the spam folder.

15. Anti-fraud measures

After launching and distributing your incentives among your audience, you need to make sure that your loyalty program is safe. That’s why you need to consider whether the loyalty provider of your choice offers built-in anti-fraud measures. Look for easy marketing permissions management, email anti-fraud options, or double-opt-in verification to confirm the identity of your rewards program participant. Another option worth looking into is the loyalty points rolling expiration that ensures that customers have X days after their last point transaction to either earn more points or use them. This feature ensures that no points and no rewards will be either collected or claimed after the end of your program.

16. Branding

If your clients are used to a particular look, style, and feel of your messages, stick to it. Just make sure that your loyalty provider allows you to use your own brand guidelines and vibe. When scanning the functionalities of different loyalty software, keep an eye out for white-labeling possibilities. It would be useful to have a landing pages creator, form or e-mail editor to ship your rewards program communication materials faster and with your own branding. Keep in mind that API-first loyalty software providers make white-labeling even simpler to achieve.

17. Affordability

When it comes to loyalty program software, you should look for a holistic solution that goes the extra mile and allows you to do more. Invest in software that can act as your CRM database, messaging hub, and as a command center for other incentives like discount vouchers, referral programs, or even online giveaways. Paying for only one feature is merely wasteful. You’d be much better off with high-quality customer loyalty software that you can use to go beyond the standard loyalty model. Choose more holistic solutions that let you shape inspiring incentives that will always surprise and delight your audience.

18. API-first build

You want your customer loyalty program software to be like the popular kid on the block. Other software providers need to know him and get along just fine. The easiest way to ensure smooth communication between different data systems and services is the use of a flexible API. With a robust and developer-friendly API in place, you only need to integrate your e-commerce services with new loyalty software. Then you can manage the program yourself. If integration is impossible or greatly hindered, you’d better give it a wide berth and seek loyalty solutions that will quickly adapt to services that you already use and enjoy. 

API-first loyalty program software is also indispensable if you want to stay flexible with your messaging channels. Separating the backend from the frontend with the use of API allows you to add new channels and remove old ones from your loyalty strategy as you go.

Key Takeaways

A good customer loyalty software helps you launch, manage, and track your loyalty program quickly and without much development effort. It lets you quickly change the validation rules, launch timed promotions, change your distribution channel, re-segment your customers, and much more. It helps you to protect yourself from fraud and supports you with optimizing and saving your budget. An excellent loyalty management system enables you to maximize your ROI and minimize your headache.

Before you launch your first rewards program, sit down with your CTO and discuss how you can leverage your web application and CRM software to build marketing technology that will sky-rocket your campaigns. Plan, which loyalty management software features are a must-have and which are optional for your use case. You can use the list we have presented in this post as a menu of possible features to cherry-pick from. Then look for the right customer loyalty software provider, that will tick all of the boxes. Remember, needs change over time. If you choose an out-of-the-box customer loyalty software provider, make sure their software is flexible, preferably API-first and Headless, to adapt to your future choices of the technology stack and distribution channels.


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