If you work at a company that has a loyalty program, the chances are pretty darn good that technology is a big part of it, and loyalty software is a big deal. These days, tech is how most customers directly interact with their favorite loyalty programs—using points, viewing special privileges, connecting with a dedicated concierge, identifying themselves as being at a certain level, and more.
Developing or enhancing loyalty software technologies is one of our specialties here at Plan A. We’ve helped many of the biggest hospitality, travel, banking, retail, gaming and tech brands in the world to build the software that makes their loyalty programs stand above the competition. We’ve integrated loyalty functionality into mobile applications, customer portals, kiosks, emails, and much more in order to surprise and delight the customers of our clients every day. Our journey in developing loyalty software offers valuable insights.
Loyalty isn’t easy, and expectations are always getting higher. Today we’ll review some of the most important lessons we’ve learned about loyalty tech throughout the years.
Be Loyal to Your Business Objectives: This Is Vital in Loyalty Software Development
Before you start developing any kind of loyalty software, you need to keep in mind what your company is actually trying to achieve with its loyalty program. Do you want to increase customer retention? Is it all about encouraging repeat purchases or visits? Or is the primary goal to gather valuable customer data? Or is it all of the above? (A totally valid answer, by the way.) By aligning your tech with these objectives, you can ensure that the solutions you create will work seamlessly with your loyalty program, and not against it.
Take the Time to Really, Truly Think About the Loyalty Software Features
Once you’ve defined your big picture goals, you need to work with key members of your company’s leadership team to outline what exactly you need to build or improve in order to achieve those goals, and how you’ll go about doing it. Each loyalty software feature you add requires some very deep thinking and scoping. Imagine, for example, a company decides to add a feature to allow a loyalty member to gift a certain number of their loyalty points to a friend, or donate those points to a nonprofit.
That single “gifting” feature actually requires a pretty significant amount of work. What will be the mechanism for storing, deducting, distributing, and using these gifted points? Are there tax implications for doing so? What if the recipient doesn’t want the points? Does the recipient have to already be a member of the loyalty program to receive the points? How will bad actors use the functionality to try to steal points illegally? How does one confirm someone’s identity when deducting points, and do especially large gifts require a secondary ID verification? What kind of security will be required to reduce fraud and stay compliant with things like KYC and AML rules? Is there a processing fee (in cash or points) for making such transfers? How will the nonprofits be able to redeem and use the points? Can points be transferred anywhere in the world? What if someone’s internet connection is interrupted during the point transfer? What if someone accidentally added a zero and gave away too many points, and then wants some of them back? Do the points expire at some point?
Yikes! The list of questions for even a single feature can get a little crazy. And remember—these are just a few of the questions that come up from just this one element.
Make Sure the Tech Can Scale Up & Deal With Real World Situations
If everything goes to plan, your loyalty program will grow—hopefully, a lot. Some companies have been caught flat-footed by their own success, crashing and burning when their technology infrastructure couldn’t keep up with consumer demand. Your software has to be able to handle increased traffic and data processing without sacrificing performance.
Cloud-based solutions allow you to scale resources dynamically, but your particular business may require something different. Remember to think about things like servers, code, and how to service customers from different countries who speak different languages, use different devices, and more. Loyalty tools need to be tested regularly in different real world situations.
We once had a company that came to us asking for help because—long before hiring us—they had decided to create a server-side application where the customer mobile apps needed to be connected to the Internet to work… but many of their locations were in remote areas that had no connectivity. It had been a costly oversight on their part that caused real reputational damage to their brand. Fortunately, we solved the problem for them and upgraded the applications to have a great offline mode, but this was a mistake that never should have happened in the first place.
Keep Your Data Under Lock And Key
Loyalty programs don’t usually work well without collecting and storing customer data, including personal information and purchase history. But customers won’t use software they don’t trust, so data security and privacy compliance in loyalty software are critical. Loyalty software needs to work with the latest encryption, access control and data protection regulations, and should have clear documentation for everything.
What’s more, given all the new privacy laws (and the accompanying fines for not complying with these laws) along with the steady, frustrating announcements about hackers and cybersecurity breaches, security needs to be taken very, very seriously. If your in-house team doesn’t have the expertise to make sure you’re compliant, hire a team that knows what to do.
Loyalty Software Needs to Play Well with Other Systems
Loyalty tools usually interact with many different technologies that you already have implemented in your business. For, say, a resort hotel, the loyalty software touches the room reservation system, the property management system, the spa system, the restaurant point of sale system, retail systems being used across the property, marketing platforms, mobile apps, kiosks, websites, analytics systems, financial tracking and payment tools, and, well, you get the idea. Guests want to be able to earn and redeem points across many different parts of their favorite business, so loyalty needs to work across multiple parts of the business. This is a lot easier said than done, unfortunately… creating a seamless experience that integrates with so many disparate systems can be seriously difficult. Most executives who lead businesses with loyalty programs – airlines, retailers, restaurants, casinos, amusement parks and others – tend to feel that their loyalty program is often falling short of what it “should be” because of many of these interoperability challenges.
Design That Delights and Sparkles
Consumers have come to expect a flawless and user-friendly interface in absolutely every website and app they use. Great software design (or awful design) can have a very real impact on loyalty. Starbucks won a lot of praise for its mobile app because of its ease of use and enjoyability, and this helped their bottom line. On the flip side, poorly designed apps that are confusing or require too many steps can turn off customers and hurt sales. The software you put in front of customers should be intuitive for both the customers participating in the program and the staff managing it. Test your early prototypes with outside users and get their honest feedback to refine UX and UI design.
Get Serious About Data Analytics
One of the biggest benefits for a company that decides to implement loyalty software is that they get to track the data. And it’s usually a LOT of data. While we discussed that it’s critical to keep that data secure, it’s just as important to put that data to work for you. Loyalty customers generally understand the tradeoff – in exchange for giving up some privacy and sharing information about themselves, the company will give them some pretty sweet benefits to keep spending more. The world of data analysis is evolving now thanks to artificial intelligence – today’s analytics can not only predict behavior and revenues, they can actually prescribe ideas to potentially change the most likely outcomes that are being forecast. (In case you’re curious about other AI-related innovations that are increasingly possible, check out this page on our website.) A solid analytics platform within a loyalty program will unlock insights about customer behavior, product preferences, pricing, employee issues and endless additional areas of your business that can be optimized.
Keep it Fresh For Your Customers
Loyalty is one of those elements that needs constant care and effort. It requires ongoing employee training and assessments, ongoing product refreshes, ongoing maintenance of grounds and equipment, and ongoing improvements to whatever mobile apps, kiosks, websites and other digital platforms your company has launched. Nothing says “uninstall me” like an app that receives no updates, ignores special events, and basically never changes. Make regular and relevant updates, take user feedback into account, and improve your tools constantly so that they stay fresh and relevant and at least as good as—if not better than—what your competition is offering.
Think About Timelines & Budget
Before you spend anything with loyalty software, come up with a realistic budget and timeline, adding a little leeway for unexpected challenges. Like any development project, loyalty software is usually a serious project that requires some planning to get it done right. If you’d like some pointers on keeping tech projects from getting out of control, this piece has some good advice about it.
To help you control costs and avoid unnecessary headaches, consider building your loyalty solutions with the help of a trusted partner like us, saving your team time and money, and allowing you to focus on what matters most—your loyal customers.