We built our loyalty software – Open Loyalty, based on some complex research we have done (40+ retailers). During that research, we were looking for elements that don’t work in loyalty programs (Why Loyalty Programs Don’t Work). Now we work with loyalty programs across the World and we can also see what is working :) So today I will share with you a list of elements that works for us and our clients.
Microservices – IT architecture is important
The Microservices Architecture allows you to use only the modules of an application that you really need. For example, some of our clients use Open Loyalty as a backend for a 360° View of Customer, custom CRM. Others use the POS Cockpit to register receipts. When you break down your software into small components, it is also much easier to add developers and just develop faster (each team is building an independent microservice).
You can read more about Microservices in our eBook.
Open Source as a distribution model
In the classic sales model, business people ask software vendors for an offer. Then the offer is passed to the IT guys. This means that the software vendor must sell the software twice – first to business, then to IT. In the model we use, everything is much easier. We publish the software as open source. IT guys look for a solution, download it, test it, and if they like it, they will show this to their business. Business guys are asking us about an enterprise license. We don’t need to sell them anything. The sales process is already done by the IT department. This streamlines the process and makes it a lot easier for everyone. In the end, business people have their own IT guys behind them – not against them.
Hidden points and levels
The clients of our clients are sometimes really bored with collecting all the points. They feel like a hamster in a wheel – constantly adding points without any real benefit.
You can create a hidden loyalty program instead. The client is collecting points but he doesn’t see them. After entering a specific level, we just offer additional benefits. For example, one of our clients is sending tickets to the theater as a nice surprise for their best clients.
Time is an ultimate benefit
You can offer the best clients benefits that will save them time. In one case, one of the fashion retailers we work with provides their clients with more support if they spend more. So for the basic level there is only a chat, for the next level there is a dedicated chat and a phone number, and for the next level there is a real concierge who will spend an hour or two giving the client a style consultation.
Proof of Concept Approach
Integration with POS or ERP could easily stop every integration for months. You must also add that sometimes it is very hard to estimate the ROI of a loyalty program. In this case you will not get a budget for your idea and you will be stuck.
Instead of stopping the project, it’s better to try the Proof of Concept approach.
In this approach, you select, for example, 5 shops and just start the program. You can ask sales clerks to manually add points and skip all integrations at the beginning. After PoC you can easily estimate the ROI and get a budget for all the integrations you need.
Offline to online onboarding
Sometimes Management Boards are sick of hearing about another loyalty program. In the end, they treat it like giving money back to the clients. You should help them realize that a loyalty program can be the cheapest and most effective ways of onboarding clients from offline to online – especially for retailers. They pay high rents and attract hundreds of thousands/millions of clients every month. Now they must win these clients again via online campaigns, competing against pure-players like Amazon or Zalando. This is insane. You must leverage your offline stores to win the online battle.
The simplest case for that is you collect client data offline and then send him a recommendation for online shopping. This is how you win clients online, without paying twice for the same thing.
Benchmarks are important
Of course for each industry there is a totally different way to loyalize clients. This is why we researched hundreds of loyalty programs to find the best ones in each industry.
We chose the most interesting loyalty programs from 8 industries: Beauty/Pharmacy, Food, Services/B2B, Apparel/Fashion, Sport, Home/Decoration, Automotive/Petrol and Entertainment.
We compared the programs in the areas of: touchpoints, segmentation, and benefits offered. From the report, you’ll also find out more about unusual mechanisms companies use in their loyalty programs.
You can find best loyalty program examples in our TOP 100 Loyalty Programs report.
To summarize, why OpenLoyalty.io is something different that you would like:
- Microservices as an architecture – very easy to connect and develop
- Open Source – developers try and then recommend this to business people, shortening the time of buying process
- A standalone application that works just after installation – ready for MVP and Proof of concepts
- Online and offline – the main idea here is to cross-sell between channels
- No need to integrate with POS, etc.
- All data are on the client-side
- Open Source for Developers + Enterprise License for Companies
- Gamification Mechanisms
- Flexible point-earning rules (buying, visiting places, recommending, many other triggers).
Published August 3, 2017