For most companies, acquiring new customers is paramount for sustained business growth and revenue. Increasingly, however, companies are realizing that engaging with existing customers and consequently, retaining them, is as, if not more, important. The reasons for this are manifold:

• It costs 7x more to acquire new customers compared to retaining an existing one
• Converting 5% more of one-time customers into repeat business increases profitability by up to 75%
• Repeat Customers have a 10x higher LTV as compared to one-time customers

That companies have woken up to this reality is reflected by the fact that 63% of global B2C marketing decision-makers are increasing their spending on relationship/loyalty marketing in 2024.

In order to successfully execute a seamless & holistic customer engagement & retention strategy, setting up the right loyalty program is paramount. Consequently, the choice of loyalty program software becomes all-important!

Here, then, are some tips for companies who are looking for that perfect loyalty program software!

How to Choose the Right Loyalty Software

1. Understanding the Unique Customer & Business Needs:

As with everything related to marketing, the first and most important step is to look inward! Some questions, therefore, that need to be asked:

• What is important to a particular company?
• What are the specific objectives and measurable goals that a business is looking to achieve?
• What specific business nuances must one keep in mind while choosing the loyalty program software?
• What is it that the customers want? What are their current behaviors and journeys like?
• How does the competitive landscape look – is the loyalty program software going to achieve competitive parity, or will that help in differentiation; is there a way to achieve both?

You’d think that the best loyalty program software should be able to address these questions, right? I’d beg to differ, however! The best loyalty program software should be able to ask these questions, cajole the answers out of key stakeholders in a company, drive first or third-party research for validation, understand customer journeys and behaviors, and then use all this information & data sciences to setup the right program structure & design.

Research indicates that the #1 reason for loyalty programs failing is because the program was not designed in accordance with the business in the first place! It therefore makes sense for marketers around the world to have this as the first consideration – ensure that the loyalty program software is capable of designing the optimized program for their business.

2. Credibility & Experience

It always helps if the loyalty program software has “been there, done that”. Companies should choose loyalty program software that has achieved demonstrable and measurable success with similar companies and use cases, both in size & scope. The key factors to look out for here are:

a. Experience in a Similar Industry Vertical

Each industry has its unique nuances, and sometimes, these are lost to the outside world. If a loyalty program software has worked with 5 other automotive companies, chances are that the platform knows (more than) a thing or two about that industry, correct?

b. Handled Similar Use Cases

Unrelated to the above point is familiarity with specific use cases. For example, receipt scanning has been in vogue now for a while, but this use case could be applicable across multiple industries. A loyalty program software that has previous experience and success with receipt scanning would be in a much better position to define associated customer journeys, ROI tracking, adoption, fraud prevention et al.

c. Have Experience in the Same Geography

If you’re in Europe, GDPR is the guiding light and you’re likely to need more than one language in the loyalty program. Wait, you’re in the USA? I bet CCPA is more important, and you’re probably going to need to do less customer education! Now imagine that the loyalty program software has experience of driving all of this in the past! Enough said 🙂

d. Worked With Companies of a Similar Size & Scale

This is often overlooked but is equally important. Large, global companies have their unique ways of working – typically with complex internal ecosystems, departments, approval processes, technical infrastructure & data flows – and they need to be handled differently from an SMB. Also, scalability requirements are way more important. The loyalty program software needs to be cognizant of this.

3. Relevant Features

Yes, of course, features are important! – but even more importantly, businesses need to ensure that the loyalty program software under consideration has all the necessary features that are relevant to their specific use case(s). Therefore, a loyalty program software that does a membership program very well may not be the best fit if you’re looking for a points program.

In addition to the here & now, a company should also evaluate the features of the software through the prism of future requirements. Every company should have, at the least, an idea or a vision of their loyalty program for the next 2-3 years, and the software must have the inherent flexibility and ability to cater to that vision.

4. Support, Service & Ongoing Strategic Consultation:

When evaluating a loyalty program software, companies should carefully assess the quality and depth of support provided. Key considerations include:

• Dedicated Support Team: Check if there’s a dedicated person or team that truly understands your use cases, requirements, and industry nuances.
• Communication & SLAs: Review the communication structure, operational cadence, and Service Level Agreements (SLAs) to ensure reliability.
• Adaptability to Market Changes: Ensure the vendor can support your program through evolving consumer behaviors and external factors (like the cookieless future).
• Strategic Consultation: Beyond technical support, evaluate whether the vendor offers ongoing strategic consultation — helping you achieve the program’s original goals.
• Long-Term Partnership: The ideal vendor should act as an extension of your marketing team, offering:
  • Continuous program evolution and optimization
  • Industry best practice recommendations
  • Customer segmentation and personalization insights
  • Data-driven performance improvements

A strong loyalty platform partner doesn’t just fix issues, it drives your loyalty strategy forward.

TrueLoyal, for example, provides ongoing strategic consultation, helping brands like Western Digital continually optimize their loyalty programs to align with evolving business goals and market trends.

5. Technology – Security & Performance:

This really is one of the “check-boxes” (albeit, a very important one!) that has to be ticked. Compliance with relevant security, data privacy, and regulatory standards is a no-brainer; but companies should also ensure that the software has a proven track record in terms of overall performance – availability, periodic security/vulnerability assessments, strong data & information security practices, and an inherently robust architectural framework.

6. Price & Cost Models:

The pricing structures of loyalty program software vendors differ quite a bit; each with its own pros & cons. Here are a few things that companies should carefully consider:

a. Transparency

As mentioned above, the pricing models may vary, but it’s important that those models are transparent. The last thing you’d want is to ask for additional funds from your CFO a few months into signing a new contract with your software vendor! Predictability in future pricing, as well as transparency in annual price increases, is something that few loyalty program software vendors provide; but ironically, that is an important consideration for companies!

b. Scalability

The pricing model should be scalable enough to cater to future volumes and planned growth; and ideally, offer economies of scale as well.

c. “Reasonable” Discounting:

This seems to be a tad counterintuitive, right? But I’m sure most companies have come across that one vendor with those “crazy” discounts – and that should raise a few eyebrows. If a loyalty program software offers a 70% discount, it could mean one of two things – their pricing was inflated in the first place (and therefore, not transparent enough), or their only value proposition is a low price (which is not a good look on their ability to address the other pointers in this document!) – both of which should raise a few alarm bells!

7. How Do They Make You “Feel”?

Last but certainly not the least, are the so-called intangibles! You would not take the decision to sign up with a loyalty program software lightly. You would likely engage in several conversations – so a “good fit” and “the right vendor” oftentimes boils down to how you feel about that software provider. But let’s try and make it a tad more objective, shall we?

• Are they asking the right questions? Did they ask about your objectives and success criteria?
• Do they care about your success, or are more concerned about getting that agreement sent over for signature?
• Are they willing to put some skin in the game? Were their cross-functional teams and senior stakeholders readily available during the sales cycle?
• Are they willing/happy to offer a free, no-holds-barred trial?

If you have satisfactory answers to the above questions, then something good is afoot!!

8. Relevant Features

Yes, features are important — but what’s more important is ensuring the software aligns with your unique business model and use cases. When evaluating loyalty program software, consider the following:

• Match Features to Use Case:
  • A platform that excels at membership-based programs may not be ideal for a points-based program, and vice versa.
  • Choose a solution that fits your specific reward structure and engagement model.
• Assess Present & Future Needs:
  • Don’t just focus on what you need today — think about what your loyalty program should achieve in the next 2–3 years.
  • The software should have the flexibility and scalability to adapt to future marketing goals, customer behaviors, and technology trends.
• Look for Built-In Flexibility:
  • Ensure the platform allows easy customization of tiers, rewards, rules, and communication channels.
  • Prioritize tools that enable real-time adjustments without heavy development dependencies.
• Evaluate Analytics & Insights:
  • Strong analytics are key for tracking success and optimizing engagement.
  • Choose platforms offering AI-driven insights or automated reporting to measure loyalty ROI effectively.

In short, the right features today and the adaptability for tomorrow will determine whether your loyalty program sustains long-term success.

Comparison: Top Loyalty Program Software

Conclusion

Choosing a loyalty program software is the first and the most important step toward realizing your customer engagement & retention goals. It’s not just about the features, but also about understanding your unique needs, evaluating the provider’s experience, and ensuring robust support and strategic consultation. Remember, the right loyalty program software can significantly enhance customer loyalty and drive sustained business growth. Take the time to choose wisely and set your company on the path to success.If you follow the steps and criteria outlined above, you’ll likely have made the right decision!

Frequently Asked Questions

1. What is loyalty program software?

It’s a digital platform that helps businesses manage customer retention through rewards, points, or membership systems.

2. Which loyalty software is best for mid-large businesses?

Platforms like LoyaltyLion and Yotpo are ideal for SMBs due to simple integration and affordable pricing.

3. What features should I look for in loyalty software?

Prioritize personalization, analytics, multichannel engagement, and ease of integration.

4. What makes TrueLoyal different?

TrueLoyal combines AI-driven personalization, story-led engagement, and strategic consultation, making it a preferred partner for enterprise brands.