Loyalty platforms — a necessary investment for a healthy business

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loyalty platforms

Before we begin our talk about loyalty platforms, it’s best to understand two essential terms that can make or break your customer retention plan. Each person is driven by two types of motivators: extrinsic and intrinsic. A loyalty platform should include both these types of factors for a successful retention strategy. What are the differences between the two? It’s quite simple.

We have extrinsic motivators — the rewards, discounts, free products the customers receive once they do a certain action with your brand. They’re participating in challenges, buying more products, so they can become VIP members, submit feedback in order to receive a code, etc. 

Then, there are the intrinsic motivators — the actions your customers do, but without having any goal or reward involved. These actions are what brought them to the platform in the first place: they enjoy interacting with other members, gain knowledge through your courses, it’s satisfying to add a code and gather that point, the brand feels relatable to the person, etc.

Most companies are relying on extrinsic rewards when it comes to loyalty platforms, which are indeed an important factor. But intrinsic motivators are what will make your brand stand out from the crowd. Now that we’ve clarified these two terms, let’s dive into loyalty platforms and their impact on your business. 

Everything you need to know about loyalty platforms

Customer retention — a smart way to boost revenue while building meaningful relationships with customers

Customer acquisition and customer retention are two terms we often hear about in marketing. The main debate around these two strategies is “which one truly represents a long-term investment for the company?”. Simple, both of them are key for your company’s growth. Acquisition grows your customer base, while retention grows customer lifetime value. The difference between them however is on the topic of costs and ROI. It can cost up to 7 times more to acquire a new customer than retaining an old one. On the other hand, customer retention brings plenty of benefits when you already have an existing customer base. Some of these benefits include: 

Seems like customer retention is the way to go, right? Well, some companies grow rather quickly, and they don’t have much time to implement a solid customer retention strategy. Moreover, it takes time to gather consumer data, establish a solid loyalty program and keep the consumers engaged. That’s when a loyalty platform can become the closest ally for marketing professionals. 

What is a Loyalty Platform?

A Loyalty platform represents an important pillar in a marketing strategy, used to reward the most loyal customers by providing points, discount codes, loyalty cards, or free giveaways. But as we mentioned at the beginning of the article, intrinsic motivation can be just as valuable. More specifically, a loyalty platform is a place where you can gather data, communicate with your customers, organize contests and run your loyalty program. If you plan to develop a customer loyalty platform, it’s ideal to gather relevant information about your customers, so you can make smarter long-term business decisions. 

You might be asking what your options are, well, it depends on your expectations. You can invest a higher amount of money in the beginning and have a custom loyalty platform, or you can go with faster options like the premade platforms. 

Premade vs. custom loyalty platforms: which one is better for your business?

Let’s begin with custom loyalty platforms. There are various types of loyalty programs, and so are your needs for a loyalty platform. Maybe you have a program based on points or a gamified experience. Or maybe you have a VIP program combined with a spend-based strategy. There are so many possibilities to reward your customers — discounts, free samples, gift cards, cash payouts, and so on. Leveraging on only one method, such as a point-based model with material rewards, does not create the experience your customer seeks. They want both extrinsic and intrinsic motivations, that’s why your loyalty platform needs both. These two types of motivations are what makes your brand’s loyalty platform stand out from the rest. Premade loyalty platforms tend to rely exclusively on extrinsic motivations. They are not catered to your own business needs. 

What does it take to have a custom loyalty platform?

From a technical perspective, an MVP for a custom loyalty platform can be up and running in 2 months, but it depends on the functionalities you need. In time, it will develop into a tailored experience for your customers and raise up to brand expectations, based on both customer feedback and business needs. But we all know those good things take time and effort.  

When you’re developing a loyalty platform, keep in mind that using the latest technology will offer you greater support in the community, and you’ll be updated with the latest trends. Moreover, you can see what’s done on other platforms. 

A Content Management System (CMS) can save plenty of your time and money for your loyalty platform. If you are open to investing more in the beginning and save money in the long run, we would recommend creating your own custom CMS. A loyalty platform will mean plenty of campaigns, new features to develop constantly, recurrent event triggering (such as a year anniversary, new promotion, etc.). Without a CMS, this will have to be done by a developer every time, whereas a CMS will make anything easy and doable with just a few clicks made by your marketing specialist or content marketer. 

Make sure your designers and developers create templates for recurrent campaigns — you’ll be saving plenty of time and money. Aside from template creation, permanently keep track of your analytics and take action once you see there’s a specific need for your users. A loyalty platform should put a lot of emphasis on the customers. Each and every customer should be able to access information or experiences, gather points, communicate or browse the website smoothly and without issues or bugs. 

Since we’ve just mentioned how important it is for any user to be able to access your loyalty platform just the same, we’d recommend you to try a progresive web app. Around 55% of page views came from mobile phones as of 2021. People would rather access mobile apps or progressive web apps instead of accessing a website on their mobile browser. As a loyalty platform user, it would be easier to access an icon on your home screen and type in the product codes or refer a friend. When we created a loyalty platform for one of our clients, aside from building a custom CMS, we went one step further and created a PWA (progressive web app). 

A progressive web app is an application that doesn’t require installation. All your user has to do is to add the icon on their phone’s home screen and the website will act as a mobile application. It can also work offline and send push notifications without needing to go through the process of installing the app from the mobile store. Moreover, from a financial point of view, a PWA costs less to develop than developing your own native mobile application. 

And what are the main benefits of a custom loyalty platform?

First, you have all the flexibility you need. When you have a good loyalty platform, it gives you the possibility to analyze, test, and optimize it regularly. You can change the rules, rewards, tiers, timing, distribution channels, anything that would cover your marketing needs. Moreover, creating your loyalty platform gives you the option to develop and innovate its scalable architecture, a big plus, honestly. 

Second of all, you can see all of your insights in just one place. Improving customer retention means optimizing frequently and noticing what works and what doesn’t. Gathering all your data from your loyalty program will become time-consuming and hardly specific at some point. This is due to you having to research deeply into what your customers are buying with the points given, or if they are even using those points. You should try to find out what’s their opinion on the program, and what’s their overall experience with your business. 

A loyalty platform offers you this overview in just one place, helping you get inside the mind of your customer. Surveys, for example, are a great tool to check the pulse on the experience the customer has with your brand. With a loyalty platform, you’re able to create, send and gather results from regular surveys, helping your business optimize, by clicking just one button. 

Moreover, if you have a points program, with a loyalty platform you can notice where your customers’ points go if they are using their benefits. You can also see if this type of loyalty program works or if you need to change a few things to optimize it. 

A third benefit is: with a loyalty platform you’re giving your customers a voice, thus increasing their satisfaction with your brand. Of course, there are plenty of ways to gather negative feedback from customers. Be it reviews, group posts (if your brand has a community group on Facebook for example), mentions on social media, and so on. But all these methods we’re presenting are manual and take a lot of time to centralize. 

A loyalty platform can help you send your customers surveys regarding their experience with your brand and centralize the answers, so you can have a clear vision of what needs to be improved. You’re reading one review that mentions your website’s filtering options need to be updated, but it’s just one, so it isn’t enough to invest towards changing it. Well, a loyalty platform can easily gather most of your customers’ views on your filtering options, helping you evaluate how necessary it is to change it. 

Moreover, you’re giving your customers a voice, a belief that they are part of your brand now and that you’re up to hear their suggestions. After all, customers aren’t looking just for products and services, they are looking for a sense of community, they want to be a part of a brand. 

Last but not least, you can benefit from omnichannel distribution. The subject of having an omnichannel approach isn’t something to debate anymore, especially when it comes to loyalty platforms. The omnichannel approach to loyalty platforms consists of in-app messages, dedicated landing pages, ads (Google, Facebook), e-mails, chatbots, and the list continues.  

Running your loyalty program manually will require a content editor to assure the consistency of your promotional messages. But distribution channels can also be easily integrated through a plugin or API. With that, you can set up the campaign and message on one platform, and it will be delivered everywhere at once. 

Some disadvantages of a custom-made loyalty platform would be:

The initial investment will be higher, as you will be building a platform from scratch

For a custom loyalty platform, you need a higher budget in the beginning, but it is easier to manage and  save in the long run. It depends a lot on the types of functionalities you want to develop and the strategy behind it. Everything can be scaled, measured, changed, developed. It depends on your budget and your willingness to invest more now to save up later.

It may take some time to reach the desired result and there will be changes

Custom loyalty platforms require a lot of code. It can take up to two months to develop an MVP and, as you receive feedback from your customers, the MVP will expand into an incredible platform, perfectly tailored for your customers’ experience.

What about already existing software for loyalty platforms?

There are plenty of already existing software solutions that would take less time and effort to implement, but might not fill in all your needs. We researched the top 5 loyalty platform software solutions and summed their features up.

Most of them do have lots of functionalities and there’s a variety of attributes and parameters to combine. They are the cheapest solutions on the market, and sometimes people have reported a longer response time or errors when it comes to events lists. Some reported that not having training or a tool description is considered sometimes a minus. Moreover, new people might find it difficult to get behind all the logistics unless there’s an employee that could give proper training. 

When it comes to deployment, most solutions offer only Cloud, SaaS, and Web-Based Deployment, but if you want an application to complement the experience, pre-made customer loyalty software solutions won’t have the flexibility you need for this change. 

Overall, customer loyalty software solutions are a faster and less expensive solution for a loyalty platform. It all depends on your brand’s long-term strategy and how you would like to expand your platform. You can choose either an existing software solution for faster deployment or a custom-made platform for the flexibility it offers. 

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