Benefits of using loyalty as a service

The benefits of using loyalty-as-a-service will not only be in financial terms but they will also be in the form of non financial long term benefits such as improved customer loyalty and satisfaction, strong referral market and excellent reputation.
Strategic and tactical benefits of Loyalty-as-a-service are;

Greater productivity
The business can benefit from superior productivity because the level of investment is inferior when compared to the output of the program. The output far outweighs the monthly payment or fee when adopting a loyalty-as-a-service platform. The capital expenditure and operating expenses will be significantly lower since the company will not be purchasing any dedicated hardware components for the program.

Differentiation
The organization can differentiate its loyalty program because it can address and reward customer needs real time with unlimited amount of flexibility to test and implement far more superior campaigns than its competitors. This is done because of the use of Cloud technology.

Integration with third parties
Loyalty-as-a-service has the capability to integrate with third parties when offering a loyalty program. For example in a points system the members can redeem points with selected merchants and this service can be used to integrate with such merchants and communicate with them. Moreover the amount of third parties can be extended based on the company’s requirement.

Loyalty as a service continued...

The loyalty program can be viewed as a service to the firm and this enables organizations to gain competitive advantage because the loyalty program will grow to be more robust, more creative, and more intuitive. Cloud services provide infinite amount of flexibility and this gives the businesses the capability to be more creative by testing different types of campaigns that appeal to its customers. Further, with the popularity of the program and growth, the firm can extend the capacity of its package without much effort. It also has the capability to connect to businesses’ backend systems and deliver real time campaigns. Real time campaign creation facilitates companies to identify a sudden change in consumer demand and modify its loyalty program to address such changes.

For example Virgin America provides just one example of how Cloud services can be used to create competitive differentiation through their frequent flyer program. Its frequent-flyer population of 1.8 million is the industry’s fastest growing at over 40 percent a year and they are also the most engaged.

Loyalty as a service

Businesses can use Cloud services to deliver new capabilities and experiences. The potential of Cloud based solutions is unlimited. Thus, IT savvy organizations seek to gain a competitive advantage by improving their efficiency and overall profitability. Cloud services can be used in numerous ways to improve customer care, information sharing, and sales transactions. Companies turn to loyalty program service providers for support across the loyalty value chain from program strategy, technology, and program management.


One way of delivering new experiences for both the customer and the business through the use of Cloud services is to adapt loyalty programs that are hosted in the Cloud. These are called as “loyalty-as-a-service”. Organizations can implement loyalty programs without the need for heavy infrastructure. All necessary hardware and software components will be hosted in the Cloud. Any business irrespective of the size can execute customer loyalty programs with the benefit of Cloud computing.
All features that are available under traditional rewards programs will be available under this Cloud based service. Firms which offer loyalty-as-a-service have different packages, and businesses can select the package most suitable for them. This will require the business to pay a small upfront payment together with a monthly fee for the continuation of the service.

More information in my next post.