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Understanding the Pros and Cons of Different Types of Loyalty Program Vendors

The hunt for the right loyalty program vendor can be a tough one. You want to find a provider who will be able to work with your budget, meet your needs, and get real results. It is important to understand the most critical criteria considerations when evaluating a loyalty program vendor.

Start your vendor evaluation by acknowledging your desired outcome(s): acquire new customers, improve retention, increase lifetime value, maximize AOV, or another goal that fits your needs. As you assess incentive solution vendors, specific criteria may help your business achieve these objectives. Consider the following as you evaluate:  There are two main types of vendors on the market: pure-play loyalty platform providers and loyalty managed services providers.

To start evaluating your vendor, review the results you want. Attract new customers, improve retention, increase lifetime value, maximize AOV, engage existing customers or other goals that meet your needs. When evaluating incentive solution providers, certain criteria help organizations achieve these goals. Consider the following when making an evaluation: There are two main types of vendors on the market: pure-play loyalty platform providers and loyalty managed services providers.

Pure-Play Incentive Platform Providers

A pure-play vendor provides organizations with the technology to manage and build incentive programs. This type of provider supports framework setup, program logic, implementation, strategic guidance, and analysis. Additionally, the company can manage, identify, track, and engage participants through the system without much support from the provider.

Characteristics of a pure-play incentive provider:

  • The organization is the owner of their program
  • 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
  • Sophisticated loyalty incentive system engine
  • Extended participant data integrations
  • Direct solution integrations, including third parties
  • Wide variety of pre-built rewards for engagement
  • Strategic account management

Pros: Quick to launch, pre-built reward options, Control over the program, ability to make agile decisions, access to customer data for applications beyond loyalty, custom-build templates, and configurations.

Cons: Requires time by ongoing, requires existing CDP & CRM, and in-house management.

Incentive Management Service Provider

This type of vendor provides the organization with program-specific advice on incentive programs to assist in strategy development, program design and management, performance measurement, market research, and other services as needed. Most management service providers work with loyalty technology platform providers to build technology. Some agencies can develop custom loyalty solutions for their clients.

Characteristics of an incentive management service provider:

  • Highly complex rule sets for personalization
  • Changes and updates to the program require discussions, decision tables, and approval
  • Granular campaign segmentation
  • Complete management of program execution and management
  • Services stacked on top of a set of technologies
  • Owns proprietary consumer data assets for prospecting and analytics

Pros: Less in-house resources required, hands-off program launch, and ongoing management. 

Cons: Agency controls program, less ability to be agile, lack of program access, no customer data for solutions beyond loyalty.

Deciding on the right incentive provider for your organization comes down to the level of control your team wants to have over your program and data. 

If you would like further information on how to choose the right loyalty program vendor, contact our team at All Digital Rewards by clicking the “Schedule Demo” button, or by calling 866-415-7703.

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