How to Choose A Loyalty Solution: Findings from Researching 100+ Loyalty Programs

At SnowShoe, we’re committed to helping retail stores find the perfect loyalty solution for their business. With so many options available, it can be a daunting task to try to understand each different program enough to choose one with confidence.

So SnowShoe did the research for you.

Our research team took a deep dive into the current landscape of loyalty solutions. We interviewed retailers. We talked to leaders in the retail industry, including Intel Retail, retail software developers, and small grocery store innovation leaders. We also interviewed a variety of loyalty program providers, from Loyalti to CouponTools to global leader Merkle. We looked at over 100 loyalty solutions.

Our research uncovered a set of key questions business owners should ask themselves when choosing a solution. And here’s everything we discovered about loyalty programs and what makes a program successful over the long term.

Loyalty Still Matters

Our digital world has changed consumer shopping behaviors tremendously. Brands have entered social media feeds, encouraging consumers to make impulse purchases from their couches. Shoppers are empowered to price-compare at the click of a button.

However, brand loyalty to a retailer remains a big part of the decision-making process. Loyal customers mean higher sales, as loyalty-driven purchases are actually worth more than a purchase from a one-time buyer. In fact, highly-engaged customers spend 60% more per transaction and buy 90% more often than less engaged customers (Research: Customer Loyalty in the Time of Covid).

A 2020 Simmons Research survey found that at least a quarter of all purchases at grocery stores, drug stores, gas stations and restaurants were made in conjunction with a loyalty program. And for grocery stores and supermarkets specifically, 66% of consumers were using a loyalty solution at the time of purchase.

Three Basic Types of Loyalty Solutions

Loyalty brands on the market today tend to fall into three basic categories:

Off-the-Shelf System
All in one loyalty solutions are tremendously helpful for small retailers because they are time savers. The loyalty activities sync with a mobile interface, your website, and point of sale system, allowing you to focus on creating your promotions and communicating with your customers. These systems are ready for use straight out of the box. Minimal set-up is required, and they are designed to integrate well with a wide variety of retail store set-ups and POS systems. There are no customizable options, which keeps costs low.
Off-the-Shelf System with Customization
For mid-level retailers and multi-site franchises, having a loyalty program with some customization options can be beneficial. There are more options to brand the hardware and software for these programs, including materials such as stamp cards. Some loyalty solutions in this tier may offer customer activity tracking and CRM integration. Depending on customer and budget needs, this type of loyalty solution can be a great option for mid-level and specialized businesses.
Fully Customized System
Fully customizable systems are primarily used by major brands and global players. These systems are huge investments and require dedicated teams to maintain customized experiences throughout every touchpoint of the customer journey. With complete customization, brands are able to personalize each communication with individual customers and collect data with a high level of detail to be used in future business and marketing decisions.

Key Questions to Ask When Choosing a Loyalty Program

Loyalty solutions show up in many different ways across brands and industries. There is no one “best” type of program, and what works well for one company may not work for you. It’s important to understand your individual business objectives and your customers so that you can choose the loyalty solution that will be most effective for you.

Start by asking yourself these questions:

What types of rewards would benefit my customers the most?
Rewards can be as simple as a discount and as imaginative as a one-of-a-kind VIP experience. The important thing is that your rewards match up with what your customers value most. If your customers are price-driven, they will value discounts and freebies. If your customers value exclusivity, they might value early access and VIP experiences.

How do my customers want to receive points?
Points can be used to incentivize any type of customer interaction you choose. You can award points for “checking-in” to your physical store, for making a purchase or for subscribing to your newsletter. You can also deliver your points in a number of ways, from stamping a stamp card to sending a text or email. Take a look at how your customers currently interact with your business and evaluate which interactions are most valuable to you and your customers.

What type of data do you want to collect?
Loyalty programs are an excellent opportunity to learn about your customers’ behaviors and collect contact information. You may want to learn which of your customers visit your store or make a purchase most frequently. You may want to test the effectiveness of mailing a postcard to your customers. No matter what ideas you come up with, chances are there is a loyalty solution that can deliver this data.

Do you want a customized solution or will white label work for you?
Branding can be a great option for loyalty programs with many consumer-facing components. However, as customization can be an added investment, it may not be necessary for every retailer. So how much notoriety do you need around your business? Are you a major company that needs to maintain brand consistency and presence? Or do you need a premade solution with an easy way of affixing your logo?

Making Your Loyalty Solution Choice

There are so many viable loyalty solutions to choose from. Ultimately it comes down to which solution will address your specific customer needs. It can be tempting to get wrapped up in the urge to brand everything around your program. But the purpose of a loyalty program is to incentivize engagement and purchases, reward customer loyalty, and provide businesses with valuable data to inform strategic decisions. As long as your program is delivering on these key outcomes, you’ve chosen the right one.

We want you to make the right choice for you and your customers. Our team at SnowShoe delivers one of the best customized loyalty solutions, used by partners at Merkle and other major vendors.

If your customers need what we deliver, you can get started today with the SnowShoe loyalty solution today.

Learning More

Read more about the retail customer journey and how to measure retail loyalty program success: