Loyalty management or loyalty program is a marketing strategy that offers rewards to customers for their purchases. Loyalty programs main objective is to retain customer and increase customer base by providing multiple loyalty offers and benefits. Loyalty management is an important part of many organizations that helps them to increase their customer base and business to a next level. Loyalty management solution enables enterprises to enhance customer base and ultimately leads to an increase in the number of sales and revenue. Loyalty management organizations offer various loyalty programs such as rewards points, cashback, travel program, gift card, dining vouchers, and fuel purchase. These organizations had faced many challenges in managing same loyalty programs across the different locations in order to provide similar services and solutions to the customers. Loyalty management software solutions are used to manage all these loyalty programs with less human intervention and provide consistent services and solution across the world. These factors are expected to drive market growth during the forecast period.
The global loyalty management market is expected to witness significant growth during the forecast period (2020–2027) due to the increasing demand for advanced solutions to monitor customer score and behaviors and to enhance customer engagement. In today’s scenario growth of the business is determined by the success of its customers. More customer engagement and more will be the level of customer satisfaction. Hence, loyalty management software are used to monitor customers' scores simultaneously. For instance, in May 2019, Kobie, U.S. based loyalty marketing company launched Kobie Alchemy X, a real-time loyalty platform to enhance customer/user experiences. This latest platform is helpful to drive desired customer behavior and provide marketers with the tools to increase their revenue through loyalty program. The customer scores can be customer lifetime value ratings and customer score types will be Customer Satisfaction score, Customer Effort Score, Net Promoter Score, Recency, Frequency, And Monetary (RFM) analysis scores. Customer satisfaction scores help companies to know whether customer is satisfied with their product or services, net promoter score is used to know how likely customers recommend the brand to other companies and purchase product from the same company in the future. On the other hand, Recency, Frequency, and Monetary (RFM) analysis indicate how frequently the customer purchase drives the revenue of the company.
Moreover, loyalty management software helps companies to create a profile of the customers based on their behavior and analyze the same to understand customer engagement, subscription utilization, and usage frequency. This helps the customer service manager to develop strategies and create campaigns to target customers for increasing customer engagement, customer retention, and customer satisfaction. Thus, in turn, it helps organization to increase revenue and economic volume of the investment firm.
However, stringent government regulations is expected to hamper the loyalty management market growth. Various regulations such as credit card and Durbin Amendment of 2010, are forcing banking sectors to restructure its reward program portfolio. For instance, in January 2018, Ontario Protecting Rewards Points Act came into existence and changed the loyalty management program and reward point process in Canada. These factors are expected to hamper the market growth during the forecast period.
Moreover, Most of the countries across the globe are also asking all Loyalty management solution provider to keep all the customer PII(personal identifiable information) on soil and to fulfill this requirement lots of solutions provider are changing their system and this is also going to impact the growth of the market.
|Base Year:||2019||Market Size in 2019:||US$ 7.6 Bn|
|Historical Data for:||2017 to 2019||Forecast Period:||2020 to 2027|
|Forecast Period 2020 to 2027 CAGR:||15.9%||2027 Value Projection:||US$ 21.3 Bn|
BOND BRAND LOYALTY INC., Kobie, Brierley, Epsilon Data Management, LLC., Aimia Inc., Annex Cloud, ICF International Inc., Apex Loyalty, Apptivo Inc., Fivestars, IBM Corporation, Oracle, Comarch SA, SAP, TIBCO Software Inc., Maritz Holdings Inc., MicroStrategy Incorporated and others
|Restraints & Challenges:||
Loyalty Management Market - Impact of Coronavirus (Covid-19) Pandemic
COVID-19 pandemic is expected to drive the growth of the market during the forecast period. The outbreak of COVID-19 has majorly impacted various sectors such as BFSI, retail, transportation, tourism, hospitality, and others. The shutdown of banks and financial institutions has led to the decline in customer footfall. Now to attract customer and to increase the sales of product, organization are leveraging loyalty management solutions. However, during lockdown demand for e-commerce, media & entertainment has been increased and companies are leveraging this opportunity by providing offers on the products to increase the sales. For instance, in September 2020, Walmart, U.S. based retail company launched a new loyalty program that offers free shipping. The objective of this loyalty program was to provide the good service to the customers and to increase their customer base.
North America is expected to held dominant position in the global loyalty management market during the forecast period
North America held dominant position in the global loyalty management market in 2019, accounting for 38.2% share in terms of value, followed by Asia Pacific and Europe.
Figure 1: Global Loyalty Management Market Share (%), By Region, 2019
North America is expected to account for the largest market share during the forecast period, owing to the presence of key players in the region such as BOND BRAND LOYALTY INC., Brierley, Epsilon Data Management, LLC., IBM Corporation, and Oracle. For instance, in October 2019, Oracle, U.S. based multinational computer technology company acquired CrowdTwist, U.S. based loyalty Management Company. Through this acquisition, CrowdTwist offer discount, points, check-ins or rewards to the customers. Companies deliver personalized experience and customer loyalty programs to brand’s most beneficial customers.
Asia Pacific region is expected to exhibit highest growth during the forecast period, owing to increasing usage of mobile technologies and increased focused on customer centric approach to provide value added services to the customers. Growing competition and penetration of brands expected to boost adoption of loyalty program across region. For instance, in June 2019, Flipkart upgrades its loyalty program by adding new program called superCoins. This new program allow customers to redeem all points earned through online shopping on Flipkart. Moreover, the advanced loyalty program offerings are easy to use and available at affordable process. Many retailers companies are adopting new loyalty programs due to improved return on investment programs. Furthermore, increasing digitization and penetration of smartphone is expected to drive market growth in this region.
Cloud segment is expected to drive the market growth during the forecast period
Among deployment type, the cloud segment is expected to held dominant position in the global loyalty management market during the forecast period. The is due to growing need for real time and automated solution increases the deployment of cloud based solution. The automated marketing tools such as gmail, web conferencing and many other platforms are gaining popularity. These tools are providing opportunities for brands to enhance their loyalty services by sensing emails and messages. However, these tools are not that much effective and does not provide good customer experience. Hence, demand for cloud based solution is increased to analyze customer buying behavior and to track real time updates regarding customer queries, retention rates and many others. For instance, in February 2019, vPromos, Inc., U.S. based mobile marketing company launched new innovation loyalty program vLoyalty SMB to enroll, engage and reward their customers in order to increase their revenue.
Figure 2: Global Loyalty Management Market Value (US$ Bn) Analysis and Forecast, 2017 - 2027
The global loyalty management market was valued at US$ 7.6 Bn in 2019 and is expected to reach US$ 21.3 Bn by 2027 at a CAGR of 15.9% between 2020 and 2027.
Major players operating in the global loyalty management market include BOND BRAND LOYALTY INC., Kobie, Brierley, Epsilon Data Management, LLC., Aimia Inc., Annex Cloud, ICF International Inc., Apex Loyalty, Apptivo Inc., Fivestars, IBM Corporation, Oracle, Comarch SA, SAP, TIBCO Software Inc., Maritz Holdings Inc., MicroStrategy Incorporated and others.
Loyalty Management solution is used by retailers and corporations to offer multiple loyalty programs for customer retention and cross-selling. Loyalty management solution is adopted by many companies to retain customers and maintain sustainable customer relationships. This is attributed to growing competition in the market, and all the companies across the globe are trying their best to retain customer by providing Loyalty offers and benefits. Brands and retailers across the globe are focusing on expanding their business plans and trying to increase their customer base by providing multiple offers. Various organizations are focusing on adopting loyalty programs to gain competitive edge in market and increase the sales for brands. The evolution of loyalty programs has led to the creation of an Omni channel platform to encourage customers to earn points across a different channel such as websites, applications, and in-store. Loyalty management companies have the capacity to boost sales and revenue by increasing customer satisfaction and made personalized loyalty programs favorable among businesses.
The global loyalty management market is expected to grow significantly during the forecast period, owing to increasing demand from the BFSI sector. The adoption and implementation of digitalized technologies such as EVM chip cards and the internet of things (IoT) provide easy and convenient access to users for various complex services such as fund transfer, check balance, and others. The increasing use of digitalized payment options is expected to drive the market growth over the forecast period. Various companies are providing loyalty offers on every transaction to encourage people to opt for digital transactions instead of cash transactions. For instance, ElectraCard Services, a leading payment solution company launched a loyalty management solution for Barclay Bank in India. ElectraCard Services Private Limited enables Barclay bank customers to get rewards through various channels such as debit card, credit cards, internet banking, and mobile banking services.
Moreover, major global players across different regions are focusing on developing new products with new features and technologies to remain competitive in the market. Industries are focusing on developing new product with new features to cater to the demand from the end-users. For instance, in September 2019, Target Brands Inc. launched new loyalty program named Target Circle to increase customer retention and customer loyalty to their brands. This program provide many benefits such as birthday rewards, personalized offers and 1% saving on purchases that attract more customers towards brands.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.