Select and Implement a Loyalty Program Platform Solution
Choose a system that aligns with the business’ strategic digital goals and opportunities.
Although the gaming and hospitality industry has good intentions to drive guest loyalty (94% consider driving guest loyalty as a top priority), it falls short in acknowledging that updating and integrating the martech stack is the key to smooth operations (only 21% include modernization of tech stack as an area of focus for digital initiatives).
Our Advice
Critical Insight
Unlocking the digital value of a loyalty program is restricted by the technology stack in place. Without establishing the right loyalty management solution, the organization will be unable to break through the digital loyalty transformation barrier, missing the mark on differentiation and sustainment.
Impact and Result
A well-prepared loyalty management platform selection will mitigate digital initiative risks. Implement a strategic loyalty management selection process by:
- Distinguishing between core, advanced, and strategic loyalty functionalities and assessing each functionality’s support of your loyalty program value chains.
- Examining and determining the deployment architecture that aligns with the organization and loyalty program objectives.
- Analyzing the vendor landscape, focusing in on those vendors that support your designed deployment architecture and satisfy current functionality and gaps.
Select and Implement a Loyalty Program Platform Solution
Choose a system that aligns with the business’ strategic digital goals and opportunities.
Analyst Perspective
Breaking through the digital loyalty transformation barrier.
In the previous report, Info-Tech’s Optimize Your Loyalty Program Through A Digital Strategy, we leveraged Info-Tech’s Digital Business Strategy to develop a digital loyalty strategy that identifies what aspects of the program to transform, technologies to embrace, processes to automate, and new growth strategies to create.
With digital loyalty initiatives in place, a loyalty program platform analysis must be the next step toward a digital loyalty program because establishing a proper loyalty management solution selection is the critical enabler that will veritably drive digital loyalty transformation.
In this report, we offer a strategic loyalty management selection process that will allow the organization to determine how loyalty functions support the value chains, what deployment approach to select, and what vendors are in the market.
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Monica Pagtalunan
Research Specialist, Gaming & Hospitality Info-Tech Research Group |
Where does a Loyalty Platform System sit in the Marketing Tech Stack?
| Casino Management System
- Property Management System - Point-of-Sale System |
Customer Relationship Management | Loyalty Management Platform |
Player Host Tool | Customer Data Platform |
| Operational industry systems that hold and feed guest data to the rest of the marketing tech stack. | Software that consists of applications designed to automate and manage the customer lifecycle. | Software that lets you create, launch, manage, and track your loyalty program. | Software that is designed to manage the customer lifecycle on the casino floor. | Software that enables a unified customer profile for marketing purposes. |
The tech stack must be ready for digital guest loyalty
The CX programs of the future will be holistic, predictive, precise and clearly tied to business outcomes. Evidence suggests that the advantages will be substantial for companies that start building the capabilities, talent, and organizational structure needed for this transition.” McKinsey, 24 February 2021.
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The industry acknowledges the need to change...94%IT departments that consider driving guest loyalty as a top priority (Hospitality Technology , 2021)...but has little intention to change.21%Include modernization of tech stack integration as an area of focus for organization’s digital initiatives. (Adobe, 2021) |
Your loyalty management solution will critically enable digital transformation
Unlocking the digital value of a loyalty program is restricted by the technology stack in place. Without establishing the right loyalty management solution, the organization will be unable to break through the digital loyalty transformation barrier, missing the mark on differentiation, and even sustainment.A successful solution will result in the following:
Visit Info-Tech’s Build a Business-Aligned IT Strategy Blueprint Visit Info-Tech’s Define Your Digital Business Strategy Blueprint |
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Unlocking the digital value of a loyalty program is restricted by the technology stack in place. Establishing a proper loyalty management solution selection is the critical enabler that will veritably drive digital loyalty transformation.
Understand the different components necessary to develop a guest-centric, unified, and agile enterprise loyalty program architecture
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IT’s Role in Enhancing the Organization’s Loyalty Program1 – Digital Loyalty Program Opportunities
Focus of Report
3 – Data and Integration Strategy
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https://architect.salesforce.com/design/architectu...
https://architect.salesforce.com/design/architectu...
A loyalty program’s objective should be focused on making the guest’s experience as seamless as possible, while enabling the organization to keep record of services consumed
Determine whether your current loyalty management solution can support your digital goals and initiatives
Sample Data: Integrated Resort X elicited a goals cascade to identify the organizational goals, initiatives, and capabilities, mapped back to IT goals, initiatives, capabilities.
A Well-Prepared Loyalty Management Platform Selection Will Mitigate Digital Initiative Risks
To mitigate risks, a loyalty program management solution must support its digital initiatives through the enablement of two overarching systems:
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A poor platform selection may result in risks:
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Info-Tech’s Methodology for a Strategic Loyalty Management Selection Process
| Phase Steps | 1. Determine Loyalty Functional Support for Loyalty Value Chains | 2. Adopt the Right Deployment Approach | 3. Evaluate the Loyalty System Vendor Landscape |
| Phase Outcomes | Determine whether stakeholders are experiencing challenges with functionality, the impact on the business, and the tasks that can be accomplished to establish current state gaps. | Examine and determine the deployment approach that aligns with the organization and loyalty program objectives. | Analyze the vendor landscape, focusing in on those vendors that support your designed deployment approach and satisfy current functionality and gaps. |
Determine what value your loyalty program creates
| Value streams and value chains connect business goals to the organization’s value realization activities. They enable an organization to create and capture value in the marketplace by engaging in a set of interconnected activities. Loyalty programs create value by attracting, entertaining/servicing, and retaining guests (Value Stream) through the following loyalty program management and operation processes and activities (Value Chains):
Different types of value your organization creates
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Value Streams
Value Chains
Each value chain has a stakeholder associated with it. This is the primary stakeholder that seeks to gain value from that value chain |
Analyzing Loyalty Program Value Chain Components
| Collection of data on guests (such as needs, wants, and habits) to segment and build profiles, and to activate the customer experience. | The creation of loyalty schemes for the guest's lifetime journey based on guest data and profiles. Examples of schemes include perks, gamified loyalty, earn and burn promotions, etc. | The creation and coordination of exclusive events and experiences for high-value loyalty program members. | Development of loyalty program rules and ensuring the transparency and clarification required by members. This also involves the administrative tasks involved for promotions and incentives. | Management of partnership relations and contracts, specifically loyalty terms, point blocks, billing, accrual templates, and distributed ledger management. | |
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| Involves enrollment and registration to expand membership. This process focuses on creating awareness while making the registration and onboarding steps as easy as possible. | Executes loyalty schemes in the guest lifetime journey through promotion recommendations, personalized rewards, etc. This process focuses on what promotions and incentives the guest sees and how they see them. | Refers to the concept of front-line employees knowing your members and being able to provide personalized service. | Allows for the accrual and visibility of points after enrolling or taking advantage of promotions and incentives, as well as the redemption of intangible and tangible rewards. The function assesses and keeps track of points based on tier classes, and point and voucher expirations, etc. | Track and analyze member behaviors based on their transactional and non-transactional activities such as bet tracking, rollover tracking, and non-gaming purchases. | |
Measure the value of your loyalty management solution based on the individual processes it supports
Processes |
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Objective |
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KPI Metrics |
| Loyalty Program Management
Guest Profile Management Loyalty Scheme Management Loyalty Event Management Partner Management Loyalty Administration |
Accessibility and ability to successfully use data to segment out and identify accurate guest profiles (Profile/Segmentation Quality). Based on guest profiles, flexibility and agility to design and develop loyalty schemes that engage the right customers. The ease of developing, designing and coordinating loyalty events for high value members. Ability to successfully management partnerships through collaboration as well as the number of partners engaged with and their contribution rate. Ability to maintain a flexible rules engine that allows for a complex network of rules and tiers with the goal of providing transparency to guests. |
Loyalty Program Management
Customer Acquisition Cost, Usage, Time Spent Customer Lifetime Value, Active Engagement Ratio, Reward Redemption Rate, Customer Churn Rate, Reward Liability Rate Conversion Rate, Transaction Accuracy, Average Basket Size Engagement Ratio, Revenue Increase, Number of partners, number of partner-related schemes, sales volume, gross margins via partners Customer Satisfaction Score – Survey Feedback (Education of Limitations), Customer Retention Rate, First Time Resolution Rate |
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| Loyalty Program Operations
Enrollment Promotions and Incentives Member Service Integration Transaction Processing Behavior Tracking and Analysis |
Guest attraction to loyalty program and from there, usability and user-friendliness for guests to enroll in a loyalty program. Right guest, right time, right message, right channel. Ability for front-line staff to successfully support and service members Ability to distribute Points, Rewards and Perks to the appropriate guests with speed. Ability to track and analyze loyalty program member behavior. |
Loyalty Program Operations
Enrollment Rate, Customer Acquisition Rate, Click-Through Rate, Conversion Rate, Customer Attention, Frequency Customer Lifetime Value, Active Engagement Ratio, Reward Redemption Rate, Customer Churn Rate, Reward Liability Rate Customer Lifetime Value, Customer Churn Rate, Customer Satisfaction Transaction Accuracy, Conversion Rate, Usability, Point Scoring Customer Acquisition Cost, Customer Lifetime Value, Sentimental Analysis |
Calculating KPI metrics
| KPI Metric | Definition | Calculation |
| Customer Acquisition Cost | Cost of winning a customer to purchase a product or service | (Cost of Sales + Cost of Marketing) / New Customers Acquired |
| Customer Lifetime Value | Total worth to a business of a customer over the whole period of their relationship | Average Value of Sale X Number of Transactions x Retention Time Period |
| Active Engagement Rate | Percentage of customers who are “active” in the program. For example, referring friends, redeeming rewards, etc. | Number of active members / Number of total program members |
| Reward Redemption Rate | Measure of how many points are being redeemed by members to see whether the program is engaging enough | Number of points spent on rewards / number of points issued |
| Customer Churn Rate | Rate at which customers leave the loyalty program | (Members at beginning of period - members at end of period) / Users at beginning of period |
| Reward Liability Rate | Cost to your company of the redemption of all outstanding loyalty points | Outstanding Points x Cost Per Point x Redemption Rate |
| Conversion Rate | Percentage of customers that convert to loyalty program members | Number of visitors that converted / total number of visitors |
| Average Basket Size | Average amount spent by your loyalty members in one transaction | Total value of transactions / number of transactions or sales |
| Enrollment Rate | Percentage of customers that enroll in your loyalty program | Number of program members / total number of customers |
| Click-Through Rate | Percentage of people who click your loyalty program advertisements | Number of clicks that your ad receives / number of times your ad is shown |
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