Vendor Landscape: Customer Loyalty Solutions Tools And Technology: The Customer Loyalty Playbook by Emily Collins August 14, 2017 | Updated: August 18, 2017 FOR B2C MARKETING FORRESTER.COM Key Takeaways Many Strategic Paths Lead To Customer Loyalty Customer loyalty has many drivers — including prior experience and emotion — that the entire organization, not just marketing or a program, affects. Two types of strategies emerge: structured loyalty programs that marketing typically owns and operates and unstructured initiatives interspersed across the organization that contribute to loyalty outcomes. Providers Of All Kinds Inhabit The Landscape Because customer loyalty initiatives take multiple forms, the landscape of providers is murky and ill-defined. We’ve identified twelve categories of providers — from loyalty-specific service providers and platforms to customer engagement agencies and analytics service providers — that bring loyalty strategy, management, and marketing chops to the table. Cut Through The Clutter With An Organized Approach There is no one-size-fits-all solution for customer loyalty. Organizations must consider their particular approach, organization, and available resources before creating their provider shortlist. Why Read This Report Are you among the many business-to-consumer (B2C) marketers who are trying to boost customer loyalty but confused by the number and variety of vendors offering loyalty solutions? The escalating importance of loyalty in the age of the customer inevitably leads to a proliferation of vendors that claim to offer solutions. It also amplifies the difficulty of identifying the solution, or combination of solutions, that best fits your requirements. This report helps B2C marketers make sense of the various types of technology and service partners that support customer loyalty initiatives. This is an update of a previously published report; Forrester reviews and revises it periodically for continued relevance and accuracy; we revised this edition to factor in new vendors in the evolving provider landscape.
Transcript
Vendor Landscape: Customer Loyalty SolutionsTools And Technology: The Customer Loyalty Playbook
by Emily CollinsAugust 14, 2017 | Updated: August 18, 2017
For B2C MArkEting
forreSTer.Com
key takeaways many Strategic Paths Lead To Customer LoyaltyCustomer loyalty has many drivers — including prior experience and emotion — that the entire organization, not just marketing or a program, affects. two types of strategies emerge: structured loyalty programs that marketing typically owns and operates and unstructured initiatives interspersed across the organization that contribute to loyalty outcomes.
Providers of All Kinds Inhabit The LandscapeBecause customer loyalty initiatives take multiple forms, the landscape of providers is murky and ill-defined. We’ve identified twelve categories of providers — from loyalty-specific service providers and platforms to customer engagement agencies and analytics service providers — that bring loyalty strategy, management, and marketing chops to the table.
Cut Through The Clutter With An organized Approachthere is no one-size-fits-all solution for customer loyalty. organizations must consider their particular approach, organization, and available resources before creating their provider shortlist.
Why read this reportAre you among the many business-to-consumer (B2C) marketers who are trying to boost customer loyalty but confused by the number and variety of vendors offering loyalty solutions? the escalating importance of loyalty in the age of the customer inevitably leads to a proliferation of vendors that claim to offer solutions. it also amplifies the difficulty of identifying the solution, or combination of solutions, that best fits your requirements. this report helps B2C marketers make sense of the various types of technology and service partners that support customer loyalty initiatives.
this is an update of a previously published report; Forrester reviews and revises it periodically for continued relevance and accuracy; we revised this edition to factor in new vendors in the evolving provider landscape.
Tools And Technology: The Customer Loyalty Playbook
More than one Strategic Path Leads to Customer Loyalty
B2C marketers tell us that customer loyalty is a key business priority.1 But more than just marketing and loyalty programs influence a customer’s loyalty.2 As such, we see loyalty breaking out into two — often overlapping — loyalty approaches that intersect with myriad vendor categories that support strategy development and technical execution (see Figure 1):
› Structured initiatives center on explicit membership. this entrenched approach to loyalty entices customers with a give-and-get proposition. Loyalty programs offer benefits — like loyalty currency, ViP experiences, offers, and discounts — to customers who enroll for their transactional and nontransactional interactions alike. By registering, members agree to give the company access to qualitative and quantitative customer data such as their contact information, transaction history, and any profile or preferences they designate. in turn, companies use these insights for segmentation, targeting, and personalization. Starbucks rewards has two reward levels — green and gold — and members earn stars by paying with a registered Starbucks Card or the mobile app or by entering codes online from Starbucks products that they purchase at the grocery store. My Starbucks rewards has more than 12.1 million active members and sees 6 million mobile orders and payments a month.3
› Unstructured initiatives identify loyalty as an outcome. grounded in customer data, unstructured loyalty initiatives influence and encourage customer loyalty without a structured give and get. they originate in various departments, from marketing and product development to the call center, and they focus on cross-sell/upsell opportunities to improve the brand experience, reduce churn, and increase engagement and customer lifetime value. Many retailers employ email programs to share information and exclusive offers with subscribers. And Apple relies on the product and customer experience, instead of a traditional loyalty program, to drive loyalty. the result? Since 2015, Apple has dominated its category in Forrester’s Customer Experience index (CX index™).4
Tools And Technology: The Customer Loyalty Playbook
fIGUre 1 A Wide range of Solutions Helps Companies Build And Execute Loyalty Strategies
Structuredloyalty
strategies
Unstructuredloyalty
strategies
Social and digitalengagement
platforms
End-to-endloyalty
solutions
Loyaltytechnology
Loyaltystrategyagencies
Word-of-mouth andadvocacy platforms
Promotions,offers, and
rewards
eCommerce,POS, and payment
processingplatforms
Mobile marketingplatforms
Customerfeedback
management
Systemsintegrators
Managementconsultants
Marketingautomation
and analyticssolutions
Narrow Your Provider Search With Three Key Questions
With such a vast landscape, selecting a partner — or, more likely, partners — to support your loyalty initiatives can seem overwhelming — especially when so many different types of vendors claim to do the same thing.5 Before you start comparing offerings, answer the following questions:
› What is your loyalty approach? Structured and unstructured strategies are not mutually exclusive, and organizations don’t need to take an either/or approach. Even if the primary tactic of your loyalty strategy takes the shape of an explicit program, it’s likely that other initiatives across the organization contribute to customer loyalty, too. take stock of your existing retention tactics and how customers currently interact with your products, services, and brand. A clear picture of how your organization approaches customer loyalty will help you align internal resources and existing providers and partners, as well as better understand what gaps to fill with new partners.6
› Where does customer loyalty sit within your organization? While we find that marketing is commonly responsible for loyalty, accountability spreads across functions including customer experience, market research, customer service, finance, and eCommerce.7 Companies that take their customers’ loyalty seriously recognize that an enterprisewide approach is best.8 But this requires careful coordination and collaboration. identify who is responsible for making customers more loyal, who else should be involved, and where loyalty sits today (e.g., marketing, operations, service, and/or as a standalone function).9 then, consider the processes and governance needed to encourage the appropriate levels of collaboration and communication across groups.10
Tools And Technology: The Customer Loyalty Playbook
› What resources are available to support loyalty? Whether you have a program or not, managing customer loyalty in-house requires significant investments in both integrated technology and human capital. take stock of the internal capabilities that support loyalty today, including tools, processes, and people that manage the strategy, customer data, marketing execution, and analytics. Are you looking for a partner that brings loyalty-specific expertise to the relationship? or do you want a solution that allows you to do it yourself (DiY)? if you have internal technology management and marketing chops, a self-service technology solution may be a more cost-effective choice.11 But organizations looking for hands-on support will benefit from a solution that includes professional services that offset some or all of the technology management and operational burden.
Vendors Address Loyalty Capabilities With technology And Services
As loyalty continues to gain importance and momentum, providers of all kinds want to lay claim to a piece of the loyalty pie. And they address the market in slightly different ways around delivery of loyalty-related technology, services, or a combination of both (see Figure 2). But no matter how you slice and dice the landscape, all providers offering loyalty support possess one or more of the following competencies:
› Loyalty strategy. to truly earn customer loyalty, companies need an approach that’s rooted in customer understanding. We define strategy development as the research, planning, and design of loyalty strategies, initiatives, and programs. Specific strategy capabilities include consumer market research, financial modeling, program design, and loyalty measurement and analytics frameworks.
› Loyalty management. to effectively track, recognize, and reward loyalty customers, companies need tools and technical expertise to manage the coordination of data, insights, and business rules. We define loyalty management as back-end orchestration of loyalty initiatives and programs. Specific loyalty management capabilities include currency management, data management, business rules definition and management, integration, call center management, and rewards fulfillment.
› Loyalty marketing. to deliver contextually relevant content to loyal customers, companies need flexible and integrated marketing tools. We define loyalty marketing as the execution of loyalty initiatives across channels. Specific loyalty marketing capabilities include campaign management, content creation, and consistent message delivery across channels.
• eCommerce, point of sale (POS), and payment processing platforms
• Vertical solutions
• Technology platforms
• Marketing automation and analytics solutions
• Customer feedback management
• Digital, creative, CRM, and other agencies
• Social and digital engagement
• Mobile• Referral and
word-of-mouth marketing
• Systems integration
• Management consulting
focus on Three Categories When outsourcing Loyalty Initiatives
the loyalty market is mature, and the lines dividing various types of loyalty providers are blurring. Vendors that traditionally delivered custom loyalty solutions via services continue to productize and improve their technology platforms, and pure-play loyalty technology platform providers are shoring up their professional services offerings. Adding to the confusion, every organization that embarks on a loyalty journey has different requirements and resources, which makes finding a single point solution difficult. As a result, firms often work with multiple providers to build their loyalty strategy, source and fulfill rewards, execute communications across channels, and manage customer data.12 As such, we now see a market with three main categories of providers that help companies devise, execute, and measure their loyalty strategies:
› end-to-end loyalty solutions address the broadest spectrum of loyalty-specific needs. these vendors offer purpose-built solutions for customer loyalty with functionality to support a full range of loyalty requirements including strategy development and program design, customer and member data management, operational support, measurement, and analytics (see Figure 3). the breadth and depth of capabilities vary by target market needs. For example, vendors targeting enterprises offer feature-rich solutions that can support large and complex programs and integrations, whereas vendors targeting midsize and small organizations focus on simpler plug-and-play solutions with a lower total cost of ownership.
Tools And Technology: The Customer Loyalty Playbook
› Specialized solutions offer narrower but deep capabilities. these vendors offer point solutions that focus on one piece of the loyalty value chain such as program design or rewards fulfillment, solutions aimed at a specific vertical, or larger solutions of which loyalty is a key component (see Figure 4). For example, points management and rewards solutions are often embedded within point-of-sale (PoS) solutions. they also typically have resources — including products, services, sales, and/or account management — dedicated to customers who want loyalty-related solutions.
› Complementary solutions boost engagement and performance. the providers in this bucket offer solutions that closely relate to or enhance existing loyalty implementations (see Figure 5). the solutions do not solely serve the loyalty market but typically offer ancillary support through sophisticated marketing automation, mobile offers and apps, deeper digital engagement, or feedback capabilities. these vendors often establish partnerships with end-to-end solution providers or engage clients directly.
fIGUre 3 End-to-End Loyalty-Solution Example Vendors
End
-to
-end
so
luti
ons
Category Example
Providers deliver a full suite of tools, partners, and services to support the large and complex loyalty program and marketing needs of large enterprises. Services include strategy and design, campaign and offer management, segmentation and analytics, fulfillment, and operational support.
This is the same as above, with breadthand depth of capabilities that cater to the requirements and needs of small and midsize organizations.
ExampleStrategy Marketing Management
Aimia, BLUE by Belly, Bond Brand Loyalty, Brierley+Partners, Collinson Group, Comarch, Epsilon, Exchange Solutions, HelloWorld, HTK, Ketchup Loyalty Marketing, Kobie Marketing, Maritz Motivation Solutions, Merkle Loyalty Solutions, Olson 1to1, SessionM
Belly, Clutch, CrowdTwist, DataCandy, FiveStars, Inte Q, Thanx
Agencies offer loyalty-speci�c consulting to help companies conduct market research, develop strategies, build programs, and select execution partners.
Providers expand the value proposition of existing loyalty programs through mall networks, loyalty currency commerce, physical rewards, gift cards, incentives, offer content, sweepstakes, and merchant-funded offers.
Solutions provide integrated earn- and-burn points solutions as part of a larger eCommerce, transaction, and payments processing suite.
Solutions include self-service end-to-end loyalty program manage- ment technology.
Solutions cater to the unique loyalty requirements for verticals like travel, retail, CPG, or gaming.
Example vendorsStrategy Marketing Management
Hani�n Loyalty, Lavender Communication, The Lacek Group, Lenati, LoyaltyOne, rDialogue, Walker Information
Tools And Technology: The Customer Loyalty Playbook
fIGUre 5 Complementary Loyalty-Solution Example VendorsC
om
ple
men
tary
so
luti
ons
Category Description
Technology and service providers support loyalty marketing through analytics and insights development, database hosting and support, and strategy services.
Solutions collect and analyze customer feedback across channels, measure results, and quantify the impact on customer loyalty.
Agencies provide unstructured loyalty strategy, data management, and campaign development and support.
Solutions encourage engagement with loyalty programs and campaigns through gami�cation and offer rewards for engagement across social, mobile, and web channels.
Example vendorsStrategy Marketing Management
Adobe, Applied Predictive Technologies, IBM, Oracle, Salesforce, SAP Hybris, SAS
Perform Due Diligence Prior to Putting out Your request For Proposal
As a B2C marketing professional, you may already have plenty of vendors that want to earn your loyalty business knocking on your door. But don’t get ahead of yourself. this is a good time to assess your firm’s loyalty maturity, vet your approach, and outline general selection criteria.13 Before you start taking vendor sales calls:
Tools And Technology: The Customer Loyalty Playbook
› Define your loyalty objectives by approach. once you’ve laid out your intentions for increasing customer loyalty — through a structured, unstructured, or blended approach — outline the specific objectives that you hope to achieve. Most organizations implement loyalty initiatives to increase retention, frequency, and engagement, but you may also be interested in collecting customer data, improving customer satisfaction, activating customer advocates, or boosting lifetime value.
› map requirements to vendor capabilities. Consider the high-level technical, functional, and business requirements that you seek from your loyalty partner or partners, and plot them to the three core capabilities of loyalty providers: loyalty strategy, marketing, and management. this sets a minimum threshold for your search and will help you begin to narrow the field. it also provides clarity as you start to build out detailed requirements.
› Create a shortlist that takes into consideration your approach and the support required. Conversations with clients reveal that they are looking for holistic loyalty solutions — increasingly including service providers, agencies, and software-as-a-service technology platforms in the same request for proposal. While you may not have total control of who ends up in the final list — especially if procurement and technology management have strong influences in vendor selection — lean on this report and our Forrester Wave™ evaluations of loyalty solutions to cross-check each provider’s core strengths and weaknesses against your functional requirements.14
Tools And Technology: The Customer Loyalty Playbook
Engage With An Analyst
gain greater confidence in your decisions by working with Forrester thought leaders to apply our research to your specific business and technology initiatives.
forrester’s research apps for ioS and Android.Stay ahead of your competition no matter where you are.
Analyst Inquiry
to help you put research into practice, connect with an analyst to discuss your questions in a 30-minute phone session — or opt for a response via email.
Learn more.
Analyst Advisory
translate research into action by working with an analyst on a specific engagement in the form of custom strategy sessions, workshops, or speeches.
Learn more.
Webinar
Join our online sessions on the latest research affecting your business. Each call includes analyst Q&A and slides and is available on-demand.
Learn more.
Supplemental Material
Survey methodology
the Forrester/DMA Q3 2016 global State of Loyalty online Survey was fielded to 192 marketing professionals with knowledge of their companies’ customer loyalty marketing strategy and priorities. only a portion of survey results are illustrated in this report.
Forrester fielded the survey from August 2016 to September 2016. respondent incentives included a Forrester report highlighting the findings of the survey and a Direct Marketing Association (DMA)-hosted sweepstakes for event tickets to its annual &then conference.
this survey used the DMA customer engagement and loyalty community as a respondent panel to ensure subject expertise and knowledge of respondents’ organizations’ customer loyalty practices, and it is therefore not random. this data is not guaranteed to be representative of the population,
Tools And Technology: The Customer Loyalty Playbook
and, unless otherwise noted, statistical data is intended to be used for descriptive and not inferential purposes. While nonrandom, the survey is still a valuable tool for understanding where users are today and where the industry is headed.
Tools And Technology: The Customer Loyalty Playbook
Sapientrazorfish
SessionM
t3
tiBCo
Vibes
Willowtree
Endnotes1 thirty-two percent of global marketing decision makers whose firms focus primarily on B2C indicate that their
organization is implementing or is expanding implementation of loyalty solutions. An additional 15% indicate that their organization is planning to implement this year. Source: Forrester Data global Business technographics® Marketing Survey, 2016.
2 Forrester’s Customer Experience index (CX index) methodology measures how well a brand’s customer experience strengthens the loyalty of its customers. See the Forrester report “the US Customer Experience index, 2016.”
3 Source: kate taylor, “Starbucks’ controversial new rewards program launches today — here are the major changes you should know about,” Business insider, April 12, 2016 (http://www.businessinsider.com/starbucks-rewards-makes-major-change-2016-4) and Starbucks rewards (https://members.starbucks.com/).
4 See the Forrester report “the US Customer Experience index, 2016.”
5 For more information on how to get your agency and ecosystem of loyalty providers to play well together, see the Forrester report “Marketers: Leverage Your Agency Ecosystem to take Loyalty Beyond the Program.”
6 to effectively embed loyalty into broader marketing efforts, B2C marketers must make sure their service and technology providers are aligning on loyalty data and insights to most effectively execute on a cohesive strategy. See the Forrester report “Marketers: Leverage Your Agency Ecosystem to take Loyalty Beyond the Program.”
7 Source: Forrester/DMA Q3 2016 global State of Loyalty online Survey.
8 Loyalty is an outcome of many company activities, including branding, marketing, customer experience, and customer service. And the impact of insights that are gathered from loyal customers should radiate out across customer-facing strategies. See the Forrester report “Be A Loyalty Company, not A Company With A Loyalty Program.”
9 See the Forrester report “get All Hands on Deck to reinforce Customer Loyalty.”
10 See the Forrester report “Harness Loyalty insights to Build Business Advantage.”
11 See the Forrester report “Brief: Simplify Your Loyalty technology Buying Decision.”
12 Source: Forrester/DMA Q3 2016 global State of Loyalty online Survey.
13 Standout loyalty strategies address the major competencies: strategy and approach, data, performance management, organization and resources, program design, and program execution. Forrester’s self-assessment will help you establish the maturity of your organization’s loyalty initiatives across these dimensions and identify areas for further improvements. See the Forrester report “Advance Your Approach to Customer Loyalty.”
14 For Forrester’s 2016 evaluation of the top end-to-end customer loyalty-solutions providers, see the Forrester reports “the Forrester Wave™: Customer Loyalty Solutions For Large organizations, Q1 2016” and see the Forrester report “the Forrester Wave™: Customer Loyalty Solutions For Midsize organizations, Q1 2016.”
note that we are currently refreshing our evaluation and plan to publish a 2017 version in Q3.
We work with business and technology leaders to develop customer-obsessed strategies that drive growth.
Products and services
› core research and tools › data and analytics › Peer collaboration › analyst engagement › consulting › events
Forrester research (nasdaq: Forr) is one of the most influential research and advisory firms in the world. We work with business and technology leaders to develop customer-obsessed strategies that drive growth. through proprietary research, data, custom consulting, exclusive executive peer groups, and events, the Forrester experience is about a singular and powerful purpose: to challenge the thinking of our clients to help them lead change in their organizations. For more information, visit forrester.com.
client suPPort
For information on hard-copy or electronic reprints, please contact client support at +1 866-367-7378, +1 617-613-5730, or [email protected]. We offer quantity discounts and special pricing for academic and nonprofit institutions.
Forrester’s research and insights are tailored to your role and critical business initiatives.
