As fascinating a subject as it is, we simply don’t have time to go into a detailed history of customer loyalty programs. If we did, we’d be discussing everything from trading stamps to the introduction of airline miles.

Instead, we’re going to take a look at the reasons why loyalty program software has become industry standard. Why our technocentric world gives us little option but to use every advancement at our fingertips and why this might be a positive force, not just for our brand, but for the entire marketplace.

Keep reading Social&Loyal to find out more.


Beginnings of Loyalty Program Software

Loyalty program software has risen with the rise of accessible computing. While computers themselves are nothing new, the dawning of the Internet as we know it in 1995 meant that networking them together was becoming something outside of University IT departments. With the removal of restrictions for commercial use in this year and technologies becoming more readily available, customer loyalty software was also slowly being introduced alongside.

The starting blocks were companies like Tesco in the UK and Target in the US which introduced store cards, the primitive versions of customer loyalty cards we use now. The same went for Subway sandwiches and Starbucks coffee which started to use a buy more, get more type of loyalty reward system.

However, customer loyalty software really began to take shape properly in the 2000s. Amazon, the online retail giant, started its Prime service in 2005. While some big supermarket chains started to drop their club card systems, other businesses such as Foursquare and Shopkick started incorporating tiered loyalty reward programs which could bring many of their different brands together.

The reason why these loyalty programs became implemented in the way they have is simple. They did it out of necessity.


Why Loyalty Program Software is Now Popular

Many larger brands not only have brick and mortar stores, but hold different subsidiary companies under the one umbrella. In terms of customer loyalty, software was needed to ensure their multichannel modes of distribution and revenue streams were able to be consolidated and made as profitable as possible.

This meant finding ways to ensure loyalty across many different points of sale, as well as driving the ‘family’ element of corporate groups. While this has become something else in a legal sense, in terms of marketing, big business wanted to bring their different branches together. Cynically, the idea of being part of a larger group meant trading the good will of one company to boost the popularity of another. Practically, it was a way to ensure business models which worked in one place could pass on their lessons to another.

But customer loyalty program software became what it is today relatively recently. This happened for two main reasons. Firstly, smaller companies were able to see how models in bigger companies functioned and apply this to their businesses. Importantly, more affordable technology was able to make this happen. Secondly, the rise of social media also expedited marketing in a much broader sense. Customer loyalty was not simply something which could be tailored in store or updated during the next round of local leafleting. It was something available 24/7 on the handheld devices which everybody and their grandmother slowly gained access to.

This contact with the customer meant loyalty could be fostered around the clock. New app developments meant that customer service could continue while workers were done for the day. And finding out customer profiles and exploiting ongoing trends allowed for smaller businesses to be able to start playing ball like the big companies. Not only where they able to play ball, but they were able to do so with ingenuity, often giving them certain advantages.


How to Use Loyalty Program Software

The reason loyalty program software has been on the rise is because many of the problems large businesses had to deal with were becoming the challenges and opportunities smaller businesses could exploit. With large scale corporate consolidation, the distance between the company and the customer could often be widened. Smaller businesses were able to target their loyalty programs in such a way that they put the customer first to mutual benefit.

If you haven’t yet started using your own customer loyalty program software, you may want to know what it can do for your business. The multichannel capabilities larger corporations use are still of great benefit to smaller companies.

Whatever type of customer loyalty program you decide upon, you need the right software to both source and manage your data. Whether you have a store, are online only or work with a combination of both, you will need to ensure you collate all the information the customer has to offer.

Your software can allow you to build up customer demographics, with individual customer profiles within these larger categories. You can find out through purchasing information what sort of product or service a customer is interested in. Using this information you can build up a reward system which is bespoke to them.

After you use your loyalty software to put a reward system in place, you will need to use it to maintain communication. Use alerts, surveys, contests and QR codes to allow customers to give you information. In turn, you will keep them notified of service changes, promotions and ways they can build their own personal brand alongside your company.

Have software which allows you to incorporate all of your social media aspects, build brand ambassadors and encourage referrals to keep your current customers happy (i.e. retain business) and set you on the right track for earning new custom in the future. This is because you have a customer base which is loyal and happy.


Where is Loyalty Program Software Going

In the coming years, customer loyalty means getting info from the customer as well as providing it for them. You will put your money where your mouth is and use your loyalty software to reflect their values.

Customer interaction will not be talking down to them. It will be a holistic engagement whereby customers will value this interaction in a same way as they do the actual product or service you provide. What the rise of customer loyalty software has taught us is that we are just at the beginning of a more open and mutually beneficial way of treating and understanding our customers.


Do you want to learn more about how your brand can boost customer retention? Schedule a free consultation with our loyalty experts today!

Kelly Rogan
CMO Social&Loyal
Kelly is our VP of Business Development and a loyalty and customer retention expert having worked with large brands all over the globe to grow true brand loyalty. She’s written for media outlets such as Forbes, Inc and Startup Grind on topics related to digital marketing and brand loyalty. She is passionate about combining behavioural psychology and technology to boost results.

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