Loyalty and CRM

Is your technology platform holding your loyalty program back?


Loyalty programs are a priceless starting point for developing deeper connections with customers. Insights on customer behavior and preferences is like having a head start in the race to establish value-based, personalized member engagement. Yet, in every conversation I have with customers, we spend a lot time analyzing whether their technology platform is an enabler or disabler to meeting business objectives.

Loyalty teams have fantastic ideas but often can't get them to market either because their technology doesn't support their ideas or the time and cost it would take to develop and adapt systems is prohibitive. A common outcome is launching diluted – "neither here nor there" – versions of potentially great products or services because of technological limitations. And this is how too many initiatives end up in the graveyard of great ideas.

Continuous innovation in products and services is a prerequisite to providing value to your members. The ability to easily integrate new loyalty partners to your ecosystem that will facilitate every day earn opportunities for your members is equally as important. But it doesn´t stop there. You also need to be able to deliver and service your offers effectively. Otherwise, the rest means nothing. Ongoing investment in your loyalty platform, whether in-house or from a provider, and a healthy development roadmap are critical to ensuring continued innovation in rich business features and capabilities.

Loyalty leaders must demand cutting-edge functionalities from their loyalty platforms to unleash program innovation, member engagement, revenue-generation, and cost-saving potential. Following, are critical aspects that can only be found in modern platforms, as opposed to the legacy systems that have been holding back so many travel loyalty programs for years. 

  •  Configurable vs. customized: 
    Launching new ideas to market usually requires systems adaptations. The questions here are: How long will it take? Will that be too late? How much will it cost? How many people need to get involved? Can our existing systems even adapt to our new needs? Anyone that has been through a customization project knows the answers to these questions. And they´re not pretty. Configurable platforms sidestep these customization challenges. Modern platforms are quick to configure, giving you more flexibility and agility to align your business with innovative ideas.

  • Time to market:
    The time it takes to launch a new offer has a direct impact on monetization. But so does launching the right offer. And this is where configurable platforms again have the upper hand. Agility to quickly realize incremental program design changes and launch, test, and adapt new offers in the marketplace is critical to success. With a modern loyalty platforms you no longer have to wait months to complete systems and product development cycles.

  • Cloud-native architectures:
    Modern, cloud-native platform architectures that use containerization and micro-services allow cost-efficient, real-time, and highly automated scaling. This allows for the instant launch of new campaigns while offering the flexibility for parallel system adjustments and enhancements with no disruptive impacts on ongoing activities.

  • Lower operating costs:
    Modern systems deployed through a SaaS model and a microservices architectures are much cheaper to operate. Legacy systems with monolithic architectures take an army of IT people to operate. Their infrastructures are also expensive to purchase and maintain. Version updates typically require huge hardware expenditures and cannot scale up when needed for promotional campaigns. Meanwhile, the modern platforms available today benefit from the scalability that the cloud provides. Furthermore, SaaS software users benefit from continuous improvement and investment by the software provider, shared across the community of users.

Unlocking limitations

Modern loyalty platforms provide the functionality to quickly integrate program designs that you've always talked about, but historically couldn't act on due to platform limitations and IT costs. Some of those features include:

  • Multi-segment loyalty programs:
    You can´t be all things to all people, which is why segmentation is so important. Differentiating how to reward members across different tiers, B2C or B2B programs, and geographies is a critical decision with a direct impact on the loyalty scheme´s perceived value. The ability to easily integrate and manage partners and their currencies is intrinsic to that value delivery. Single instance platforms are a game-changer for efficiently deploying and managing the different layers that multiple program and currency loyalty strategies comprise.

  • Miles, points, and the almighty cash:
    Miles and points are standard reward mechanisms in all loyalty programs. The ability to easily redeem these rewards directly impacts the value perception members have of your loyalty program. Providing your members with the ability to search and pay for flights or partner network offers using a mix of rewards and cash is unquestionably a major value add.

  • Rewards pooling and transfer:
    Member pooling and the ability to transfer points and miles offer loyalty programs an extra edge. By providing members with the ability to share their rewards, you´re adding to the value your program offers them. Doing this can also incentivize increased spend and new member acquisition. A platform that allows you to do all this out-of-the-box, including the ability to purchase miles as gifts and freely configure business rules, can only add to your member engagement and revenue-generation opportunity.

  • Fraud prevention:
    Because there´s always going to be somebody out there trying to beat the system… As you unlock more value in your loyalty program, the temptation will be there to exploit those benefits. This is where a highly secure platform by design, with AI-driven fraud controls, will protect your members and your business´s value delivery, profitability, and reputation.

  • Agile partner integration:
    A partner ecosystem is key to adding value to your loyalty program´s members through increased everyday earn and redeem opportunities. All too often, partnership teams in loyalty departments choose not to add more partners because the platform work involved is too onerous. Furthermore, loyalty leaders find that new and innovative partnership constructs outside of the normal earn model just can't be supported without a big IT customization. Modern platforms support agile partner integration so you can act on the partnership strategy you want, not just the strategy a legacy platform can support.

Stop saying no, start saying yes

It's time to stop saying no to innovation, new member engagement opportunities, and new revenue-generation potential. Technology should be an enabler to achieving business objectives, not a disabler. Start saying yes to innovation and let your loyalty team´s imagination run wild with a modern technology platform that will take your business to the next level. And save some hefty costs and headaches along the way…

Author info

Marcus Puffer is Vice President & Head of Loyalty Management Solutions at IBS Software. In this role, he is responsible for the loyalty product suite, a next-generation platform carrying out some of the most successful customer engagement programs in travel and transportation. Before his almost 6 years tenure with IBS, Marcus has served as General Manager of topbonus, airberlin's loyalty program and the second-largest frequent flyer program in Germany with more than 3mn members and over 120 partners. 


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