Choosing the Right Reward and Incentive Vendor
Part three of this guide will explore some essential factors to consider when researching and selecting your loyalty and incentive solution company. The goal of every incentive program is to have excellent UX satisfaction scores while maintaining operational efficiency. Implementing the right technology makes this much less elusive than in previous years.
Technology manages participants, activities, event processing, different use case redemptions, validations, QA, reward fulfillment, reporting, and more. Program managers can now easily access accurate program data for better customer service and present robust dashboards to inform decision-making while maintaining security, compliance, and customer confidence.
Organizations use the vendor selection process to look for ways to use technology to improve incentive payout processing, management, and fulfillment for their employee recognition, health and wellness, customer surveys, product rebates, sales incentives, and channel partner initiatives.
This guide is to help the reader better understand the criteria and considerations needed during the incentive and reward vendor selection processes.
Table of Contents:
– Types of Providers
– Pure-Play Incentive Platform Providers
– Incentive Management Service Provider
– Choosing the right type of incentive solution provider
– Vendor Evaluations
– The Wrap-Up on Evaluating Vendors
Types of Providers
Understand the most critical criteria considerations when evaluating a loyalty program vendor.
Start your vendor selection process by acknowledging your desired outcomes. That may include:
- Acquiring new customers
- Improving retention
- Increasing lifetime value
- Maximizing AOV
- Driving engagement from existing customers
As you continue the process, develop specific criteria for what you’re looking for. One differentiating factor is whether you want a loyalty-managed or pure-play loyalty platform provider.
Pure-Play Incentive Platform Providers
A pure-play vendor offers organizations the technology to control and build their incentive program. Selecting this type of vendor means having a support framework establishment, program logic, implementation, strategic guidance, and analytics. Still, the business can manage, identify, track, and engage participants via their system without a heavy lift of support from the vendor.
Characteristics of a Pure-Play Incentive Provider:
- The organization is the owner of their program
- Sophisticated loyalty incentive system engine
- Extended participant data integrations
- Direct solution integrations, including third parties
- Easy and fast user adoption
- Quick to launch and bring to market
- Wide variety of pre-built transactional reward options, including points accrual, codes, games, and redemption templates
- Wide variety of pre-built rewards for engagement
- Strategic account management
Pros: Control over the program, ability to make agile decisions, access to customer data for applications beyond loyalty, quick to launch, pre-built reward options, custom-built templates, and configurations.
Cons: Requires time by ongoing, requires existing CDP & CRM, and in-house management.
Incentive Management Service Provider
This type of vendor can be a major asset as you continue the vendor selection process. An incentive management service provider offers incentive program-specific consulting to your organization and assists with developing strategies, building and managing programs, and more.
Most management service providers link up with a loyalty technology platform provider to enjoy the vendor incentive of having help executing the technology build. Some agencies can develop custom loyalty solutions for clients.
Characteristics of an Incentive Management Service Provider:
- Granular campaign segmentation
- Complete management of program execution and management
- Services stacked on top of a set of technologies
- Highly complex rule sets for personalization
- Changes and updates to the program require discussions, decision tables, and approval
- Owns proprietary consumer data assets for prospecting and analytics
Pros: Less in-house resources are required, as well as a hands-off program launch and ongoing management.
Cons: The agency controls the program, has less ability to be agile, lacks program access, and offers limited customer data.
Deciding on the right vendor incentive provider comes down to how much your team wants over your program and data.
Choosing the right type of incentive solution provider
Organizations under pressure to easily access data and leverage it quickly prefer a provider that gives them ownership over their program during the vendor selection process. Their marketing teams prioritize the capabilities to iterate and update the incentive program in-house rather than rely on the service provider to deploy and enact changes to mitigate disconnect and maximize agility.
Though managed services providers can relieve your organization of an additional channel, it is important to note the market is primarily moving towards pure-play solutions. The SaaS-based incentive platforms provide enterprise teams with the customer data necessary for applications beyond loyalty, including customer service and marketing efforts.
Managed services providers function as strategic partners and advisors, helping to establish and grow an organization’s vendor incentive program.
Established, Enterprise-Grade Organizations
A pure-play incentive solution provider is advisable to find during the vendor selection process if your organization has a well-developed CRM (customer relationship management) and an existing CDP (customer data platform) system.
This solution type is ideal for organizations that prioritize control of their program and accessibility to their data as they see fit. If there is a need to leverage the data collected across additional marketing channels such as omnichannel, look to a pure-play incentive software solution provider
Limited Staffing Bandwidth
A managed services provider works wonders supporting in-house teams that lack the bandwidth or expertise to build and manage their loyalty solutions. The services provider offers vendor incentives for an organization that does not plan to leverage customer data to enhance its loyalty program or other marketing channels and prefers an outsourced solution.
The best option for a business that does not need to interact with or manage the program in an agile, personalized way should look at a managed service provider when selecting a vendor.
Vendor Evaluations
Strategic Partnership
Your incentive vendor should be available to provide strategic guidance throughout your program partnership.
The provider should offer the right technology, but you must also ensure that the provider team can leverage their industry expertise to help your organization achieve long-term business goals. They should provide a proven data-driven framework and methodologies to assist you in measuring the expected participant behavioral outcomes and motivations to meet business objectives.
It’s also important to assess how well their team understands the market and the industry vertical. In this case, a vendor incentive is to have a team that can offer support at the granular level of your program as a strategic partner and solutions expert, even if the vendor is not a managed services provider.
Program Logic
During the vendor selection process, a few key factors determine if a provider’s incentive technology is the right type for your business:
- The kind of incentive program supported
- If participant behaviors are tracked and/or validated
- The mode of reward delivery
- The level of insights and reporting.
Consider how and at what rate your participants earn now and what behavioral outcomes you want. Establish the vendor’s logic capabilities when it comes to building out rewards. That includes not only transactions but also cross-channel engagements with your brand.
Innovation
If a vendor works with companies like yours, they probably understand your needs better than those that don’t during the vendor selection. That quality can mean your business enjoys the vendor incentive of providing your company with the information it needs to improve the user experience for participants. Check review sites to see what their client participants are posting. During your product demo, ask: “What industries and customers do you work with that resemble me?”
Adaptability
The relationship between the program, brand, and participant is constantly changing. Your approach to engaging participants with your brand and program requires you to be dynamic enough to adapt to changes.
During the vendor selection process, choose a company that reinforces your need to be agile. You want to iterate on the program to take advantage of technology changes, market shifts, client customer demands, industry news, and time-sensitive campaigns.
Implementation
While building an incentive program does require resources, taking your program to market shouldn’t be overly time-intensive. The obvious choice to avoid a long-term implementation may seem like out-of-the-box programs during the vendor selection process, but they often lack customization capabilities, a key component needed for enterprise brands.
The right vendor won’t make your business choose between a custom build and speed-to-launch. They should offer a system with a secure, high-functioning technical foundation that can quickly add feature-rich microservices to meet business objectives while at the same time having custom-build capabilities.
Some organizations’ programs might require greater cross-functional vendor support, while smaller programs can quickly be set up and go to market. Stated another way, using software and services that offer a dedicated relationship manager, customer support, and success at all levels are major vendor incentives that can give you a substantial leg up. Some incentive platforms require service hours to get set up. Others, like us, go so far as to offer live reward fulfillment support.
Ideally, your potential vendor will add value from the start by listening to your goals and providing unbiased advice on achieving the best results. A customer success team can coach you on proven approaches to implementation that align with your business model after selecting a vendor.
Does the solution require training? Can you set it up yourself? Will customer success teams be there to support you if you need it? These are all excellent questions to ask. The self-serve style usually translates to limited customer support and expanded FAQ content.
If you are a small business and that’s all you need, these programs can be good options. But if you are a larger company with more sophisticated needs, having a relationship manager in your corner can make all the difference.
As your business conducts research while selecting a vendor, choose a loyalty solution that takes an object-based modular approach. Step-by-step, the right vendor should provide the guidance and technical support to enable your brand to build an on-brand, customized program without an extensive implementation process.
Integrations
Ensure the vendor has a straightforward integration process with the other systems in your technology stack, including your online and third-party solutions.
The team should be willing to discuss a custom build, a plan for integration, or another solution if the vendor does not offer a current integration for an essential technology solution in your stack to ensure your program operates seamlessly.
Omnichannel Capabilities
Businesses with retail locations should consider a company that provides a solution that can integrate with in-store and online operations during the vendor selection journey.
Discuss what types of applications the vendor provides to engage your loyalty program in physical stores, including receipt scanning, point-of-sale integrations, and QR codes. The system should simplify enrollment and redemption via mobile devices, and users shouldn’t have to rely heavily on a store associate.
Comprehensive Analytics
A vendor should offer comprehensive, real-time data on your incentive program. Ensuring you can gauge the program’s effectiveness and optimize it as needed.
Basic metrics to look for during this part of the vendor selection process include:
- Activities
- Sales claimed
- Validation
- Quality control
- Earn rate
- Product redemption
- Average redemption value
- Enrollment participation rate, with the ability to go beyond these data points with Meta base and ad hoc reporting.
Built-in performance reporting can help you easily understand the top-line revenue impact from your incentive programs.
Security
Organizations are experiencing data hacks almost daily, and no one needs reminding that security must be a top-level priority during the vendor selection process. It helps if you have confidence that your vendor is well-prepared and has a history of being proactive and adapting to new security issues on an ongoing basis.
Government-Compliant Data
When a vendor is hosting your rewards program, they should demonstrate that their hosting environment meets government security and compliance requirements, including the provisions of FedRamp, FISMA, etc. Google Cloud is an excellent example of a hosting environment that meets the above conditions.
There are hundreds of security measures required for the FedRAMP High baseline alone, and many incentive processors do not have the technical understanding or policies in place to meet these requirements. So, finding one that can during the vendor selection process can be a good sign.
PCI Compliance
The Payment Card Industry Data Security Standard (PCI DSS) comprises 12 requirements for all companies and organizations accepting card payments. If your vendor is providing card services, they must demonstrate that they meet all these requirements during the vendor selection process.
SSAE18 and SOC Certifications
Voluntary certifications that show a next-level vendor’s commitment to security include SOC certifications. SSAE18 is the audit standard that dictates the SOC report components. A high-quality incentive processor will have SOC 2 certification and operate under SSAE18.
Use of Tokenization
Tokenization is related to payment processing and replaces the primary account number (PAN) with a surrogate value. Tokenization aids data security by replacing sensitive data with unique identification symbols (tokens) that retain all the essential information about the data without being interpreted. Once data is tokenized, it helps ensure the security of the data if it is intercepted or stolen.
End-to-End Encryption
End-to-end encryption is a vital consideration during the vendor selection process because you are open to a breach if there are holes in the process where tokenization isn’t in place. Every payment processor will use tokenization.
It is essential to know that not all processors ensure that tokenization starts at the point of issuance and continues through the entire process. Suppose you’re relying on multiple vendors for various parts of your payment environment. Encryption is another reason it’s beneficial to work with a robust end-to-end payment processor.
The Wrap-Up on Evaluating Vendors
You may want to start making your vendor selection list by first talking to friends and/ or colleagues who have used an incentive software solution provider before (and have recommendations). Once you have your prospective vendor list and all the right questions, request a product demo from two or three vendors.
Demos can tell you a lot about a company. And, once you schedule a demo, notice which companies respond fastest—it’s your first look into how customer-centric they really are and how they will treat you in the future. Find out everything All Digital Rewards offers by scheduling a demo with us today.
