Various companies and retailers provide customer loyalty programs to customers who make repeated purchases because client loyalty is critical for success. For keeping a positive relationship with new and existing clients, these programs offer free merchandise, rewards, and coupons, among other things. These programs increase their coverage to include clients who buy things daily. Furthermore, programs present novel benefits for enhancing client response rates, which results in increased customer retention. Different alliances are also being focused on by various financial institutions to cut loyalty program costs.
Businesses across various industry sectors are rapidly turning from product-centric strategies to customer-centric methods. It has been noticed that producing customer value and putting customers first, in addition to a simple customer focus, provides the longest-lasting business value, regardless of time. Because the goal of loyalty management is to please/reward a company's repeat customers, adopting customer-centric tactics has become necessary to maintain a high customer retention rate, fueling the demand for loyalty management programs. Annually, American businesses issue more than USD 50 billion in perceived value in the form of reward points and miles.
Loyalty management is a strategic marketing method in which a firm focuses on retaining and expanding existing consumers through rewards. The customer proposition – the subjective evaluation by the customer of whether or not to acquire a brand based on the integrated combination of the value they receive from each of these marketing disciplines – includes branding, product marketing, and loyalty marketing. Increased use of omnichannel and multi-channel programs and technical improvements has become the growth drivers for the industry.
The global customer loyalty management software market size was valued at USD $930 million in 2022. It is projected to reach USD $1,970 million by 2031, growing at a CAGR of 8.7% during the forecast period (2023–2031).
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Customer satisfaction and loyalty are inextricably linked. The improved algorithms can help us use artificial intelligence (AI) and machine learning (ML) to analyze consumer behavior. AI and machine learning are used in loyalty programs to improve the consumer experience and affect purchase habits. Furthermore, the AI can keep an eye on loyalty point accounts and detect fraud. The advantages are expected to boost the market growth. According to Code Breaker, 75% of consumers say they'd be more likely to participate in loyalty programs if they could access them from their smartphones.
The advanced AI-based loyalty management platforms facilitate augmented analytics, reporting facilities, intelligently reward customers, and the increasing adoption of loyalty management solutions based on machine learning and AI enhance loyalty programs to boost the market growth.
In today's business world, a company's success is determined by the success of its customers. The higher the level of customer engagement, the higher the level of customer satisfaction. As a result, businesses require appropriate software solutions to monitor customer scores. Customer lifetime value ratings, Customer Effort Score (CEC), Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), and Recency, Frequency, and Monetary (RFM) analysis scores are all examples of customer scores. The analysis results of these various customer scores assist Customer Service Managers (CSMs) in developing campaigns and strategies to target specific customers to increase customer engagement, retention, and satisfaction. It also aids in increasing revenue and the economic value of a firm's investment.
Primary players have introduced personalization features into their loyalty platforms to derive significant growth. Its feature aids in capturing the customer's attention and improving their overall experience. Customers are interested in personalized recommendations, coupons, and promotions from brands to benefit from them. Such programs increase customer satisfaction, which drives their adoption across industries. Retailers prefer customized loyalty programs to increase sales, customer loyalty programs, online traffic, and profit. Customer loyalty programs, such as those offered by credit card companies, hotel chains, and retailers, are used by more than 75% of US adults. It drives the growth of the customer loyalty software market.
The market is divided into two segments based on deployment: on-premise and cloud. Cloud-based customer loyalty management software provides a network-based solution accessible from any location with an active internet connection. Integrating with third-party solutions is usually easier. The cloud deployment model supports various devices that are simple to use, such as tablets, mobile phones, social media, and many others. The cloud-based software allows real-time updates on customer queries and response rates at reasonable prices. Furthermore, they help organizations with scalability and ease of access to organizational content, regardless of employee location, assisting with business continuity. The global customer loyalty software market is expected to grow at an 8.6 % CAGR by cloud deployment.
The market is divided into two categories based on enterprise size: small and medium, and large. During the forecast period, the large enterprise segment will hold the majority of the market share. Multiple incumbents in various industries and industry verticals, such as BFSI, IT and telecommunications, and hospitality, are implementing loyalty management solutions. To defend their position in a highly competitive environment, they are investing heavily in loyalty management solutions.
Small and medium-sized businesses are crucial drivers of economic growth and job creation. Over the forecast period, the rising popularity of cloud-based deployment is expected to encourage small and medium businesses to use cloud-based loyalty management solutions. Small and medium businesses, in particular, can save money by using cloud-based loyalty management solutions.
The COVID-19 pandemic had a crucial impact on the transportation, banking, and hospitality industries. The COVID-19 pandemic, on the other hand, had only a minor effect on market growth. Lockdowns imposed in various parts of the world as part of efforts to stop the spread of the coronavirus hampered product sales; however, the popularity of e-commerce websites and online shopping grew significantly. As a result of the lockdowns, customers preferred to shop online, prompting sellers to make multiple efforts to keep their existing customers and attract new ones, resulting in the adoption of loyalty management programs. There has been an increase in the number of people using online media and entertainment due to strict lockdown regulations. It allows OTT vendors to offer more effective loyalty programs hence driving the market.
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Due to its technologically advanced infrastructure, widespread adoption of loyalty programmers, and strong presence of several established enterprises in developed countries such as the United States and Canada, North America offers a wide range of opportunities for the global customer loyalty software market. The majority of customers in the United States have loyalty cards. Retail chains, movie theatre networks, supermarket and fish market chains, and pharmacy chains are among the industries that require royalty cards from their customers. Customer loyalty programs are offered by companies such as Sephora, Starbucks, Amazon Prime, and Walgreens. According to the Oracle report 2020, 72% of the customers engage in loyalty programs.
Due to half of the world's population, high internet penetration, changing customer demographics, and the expansion of small convenience stores and mini-markets, Asia-Pacific is one of the providers of lucrative opportunities for the market. Furthermore, urban shoppers are looking for convenient options that fit their on-the-go lifestyles, and large retailers are offering promotional deals to keep sales growing.
Over the forecast period, the Asia-Pacific loyalty management market is expected to grow at the fastest rate. Some of the world's fastest-growing economies, such as India and China, are found in the Asia-Pacific. The regional market is expected to grow due to a growing preference for mobile technologies and a strong emphasis on pursuing a customer-centric approach to provide value-added services to customers.
The growing internet penetration rate and the unabated growth of the e-commerce industry in countries like China and India bode well for the regional market's growth. To reach out businesses have implemented multiple loyalty management solutions and services. For example, in January 2021, Flipkart launched SuperCoin Pay, a digital payment option to complement its SuperCoin Rewards program. Customers who shop on this platform will receive rewards and benefits under the new program.
Some of the key players in the global customer loyalty management software market are
May 2021- Salesforce introduced a new product of Loyalty management for the end-users such as retail, manufacturing, travel, and hospitality to boost engagement and trust. It is built on the Salesforce Consumer 360 platform to provide intelligent solutions for B2B and B2C customers.
June 2021- Comarch Launches New AI-Powered Loyalty Program Enrollment Security Service. The AI-powered Enrollment Security Service uses historical data to detect fraudulent new registrations and changes to personal information. It uses an ensemble of statistical and machine learning natural language processing models to analyze each new registration or change in personal data.
Report Metric | Details |
---|---|
Market Size | USD in 1,970 Million By 2031 |
CAGR | CAGR 8.7% |
Historical Data | 2020-2021 |
Base Year | 2022 |
Forecast Period | 2023-2031 |
Forecast Units | Value (USD Million) |
Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends |
Segments Covered | by Deployment (Cloud), Enterprise, Application (Campaign Management, SMS Marketing) |
Geographies Covered | North America, Europe, Asia-Pacific, LAME and Rest of the World |
Key Companies Profiled/Vendors | Apex Loyalty, CitiXsys Americas Inc, CityGro, Inc., Influitive Corporation, SiEBEN Yotpo, Ltd., Tango Card, Inc., Oto Analytics, Inc., Zoho Corporation Pvt. Ltd., and Loyverse., |
Key Market Opportunities | Rising Demand For Customer Loyalty Management Software In Technology Industry |