An Overview of Loyalty Management Software for 2022

An Overview of Loyalty Management Software for 2022

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It is widely recognized that keeping existing customers is easier and less costly than finding new ones. Utilizing a loyalty program is one crucial way for businesses to strengthen their connections with customers. After all, over 90% of today's businesses have embraced the practice of integrating loyalty programs within their business, according to Accenture. Customer loyalty program solutions have the potential to convert one-time purchases into devoted customers. Imagine a customer visiting your grocery store to get some fresh salsa for a summer party, and realizing they can earn some sweet incentives (let’s say it’s a percent off their favorite product or a free mini cooler) by joining your loyalty program, they can end up becoming regular customers. Customers grow closer to the business they frequently visit over time, and they see a greater value in the relationship as a result of you integrating a loyalty rewards management system into your business.  

Modern customer loyalty programs need the appropriate technology to operate. Loyalty software solutions are designed to provide businesses with everything they require to manage their loyalty program. The software controls a wide range of program forms and provides a variety of features. This blog will go into greater detail about the operation of loyalty program software and how it can help businesses in operating their programs more effectively. 

Loyalty Management Systems: An Overview 

A software solution called a loyalty management system (LMS) enables you to design and control every element of an eCommerce loyalty program. It gives retailers and program administrators a dashboard to manage the program. Business users can set the program's rules and view performance reports on the dashboard as well. Users can register, update their preferences, and access their rewards while on the customer facing dashboard. 

The platform's wide range of features make it the ideal solution for any retail company looking to modernize their customer data management. In order to give comprehensive performance metrics, it first keeps all customer data in the system and then collects data from customer engagement. In addition to the loyalty features, retailers can use the program as a customer relationship management (CRM) system or customer data platform (CDP). 

How Does a Loyalty Management System Work? 

A completely functional loyalty program needs to be maintained through a few essential procedures. It all begins when the retailer develops their loyalty program using the loyalty management system. The system then gathers data as customers start to sign up for the program. We'll look at every action that loyalty software takes.  

1. The system is used by retailers and operators to specify the guidelines for the loyalty program. 

2. The LMS is then linked to several touch points (POS systems, websites, etc.). By doing so, they can collect signups and enable customers to redeem their incentives. 

3. The business advertises the customer loyalty program. 

4. By providing the necessary information, customers register for the loyalty program. 

5. Data from the customer is entered into the LMS database, and the user is given access to their account. 

6. Customers actively interact with the brand, and in exchange, they receive incentives that automatically apply to their account and are specified in the program rules. 

7. By looking through the list of loyalty members, retailers can examine details for every customer. Individual accounts can receive discounts and perks. 

8. Customers can examine their point totals and update their personal information on their account page, where they can also track the status of their program. 

9. Customers can use many ways to redeem their incentives. For instance, customers might utilize their points to receive an item for free or use a coupon code on their purchase. 

10. The customer's rewards balance is updated by the loyalty management system after the redemption is completed. 

11. The system gathers all information relating to customer purchases and redemptions into an analytics platform, allowing the retailer to receive reports outlining the operation of various program components. 

The Components of a Loyalty Management System 

The Ability to Experience Omnichannel Integrations  

Be it a mobile app or a physical store, the loyalty management system expands your loyalty program to all of your touch points. Customers can open an account using any available channel, and their information is subsequently added to the system. Customers can redeem their rewards through any channel because the software connects to each touch point in real-time. With an omnichannel link, businesses can monitor all customer activity and create a single profile for each customer. 


Application programming interfaces, or APIs, are available with contemporary loyalty management software through a variety of endpoints. The loyalty management system can connect to a variety of programs thanks to these APIs, including point of sale systems, mobile apps, and cart services. Additionally, APIs enable data integration with other sources, such as customer data platforms (CDP), which provide comprehensive customer profiles that retailers can utilize to manage their campaigns. 

Dashboard for Retailers  

Businesses can administer their loyalty programs through the system, and this is where they set the guidelines for their unique program. Important functions like report analysis, promotion creation, and account viewing can all be done on the dashboard. Additionally, you can examine each member's orders, points/rewards balance, and preferred payment methods by visiting their profile, to highlight a few. 

Dashboard for Customers  

Loyalty software offers a user interface for customers. Customers can use this dashboard to manage their loyalty account. They can check their loyalty tier, manage their points, and update their personal information on it (phone number, email, etc.) They can also communicate with the retailer if an issue arises or decide on marketing preferences (for instance, if they want to be excluded from receiving emails regarding a particular product).  

The Capability of Managing Rewards 

Retailers can design a variety of loyalty program structures using the LMS, including subscription-based, tier-based, and points-based ones. A rules-based engine built within the software allows the business to automatically implement the requirements of their loyalty program. For instance, the system will automatically add the necessary number of points to the user's account if you design a points-based program that awards a set number of points for each dollar the customer spends on a specific product. Additionally, this engine enables businesses to manage many incentive types for a single program. To determine how the two structures interact with one another, they can set up combinations based on rules. 

The Creation of Hierarchical Structures 

Businesses organize their loyalty programs using hierarchies. They can then modify the user categorization to meet their unique requirements. By making it simple to grasp the many tasks that people are playing in the loyalty program, hierarchies help businesses. 

Segmenting Customers  

Segments are a great way to identify your customers and provide them with the right content, and this can be done with a loyalty management system. Any variety of factors, including location, demographics, and past purchases, might be used to identify a segment. You may tailor your program and messaging to each user by using precise customer segments. Let’s say for instance that a customer is a vegetarian. You can ensure that they won’t receive any email promos regarding a sale on meat-based products. Additionally, you can automatically apply gifts and other benefits to members' accounts by using customer segmentation. 

Promotional Offers and Coupon Codes 

The systems for managing loyalty programs give retailers the opportunity to design and administer promotions, including time-limited deals that are only accessible to loyalty program members as well as online coupons that customers can add to their orders. The ease of automatically allocating these incentives to specific customer segments is available to you as a business owner. Through the merchant dashboard, you may also offer discounts to specific user accounts, such as a birthday coupon for a free item or $5 off a future purchase as a thank-you for being part of a business for a year. 

Point of Sale Integration  

The ability of a loyalty management system to integrate with a point of sale (POS) system is another significant benefit. The same as with an online order, customers are free to use their points or discounts in-store. The LMS keeps track of every purchase in order to adjust the rewards amount in accordance with the transaction. Customers can monitor the status of their rewards and programs in-store thanks to the POS integration. 

Analysis of Performance  

The performance insights for your loyalty programs are provided by the loyalty management system after processing its data. You gain a thorough knowledge of how people interact with the program and which approaches produce the best outcomes. These insights can help you identify program improvement opportunities. The merchant dashboard contains the analytics and reporting. 

Integrating SMS and Email  

Loyalty software enables communication with program participants via email or SMS (short messaging service). You can choose to either have third-party marketing services integrated with the messaging feature or have it built directly into the software. Retailers can utilize the messaging feature to schedule and automate communications with members of their loyalty programs. A scenario would be a jewelry store setting up an automated text or email regarding a surprise promotion for an exclusive charm at half off to be sent to members. 


Referral marketing is one of the most efficient methods for growing your business, and the loyalty management system enables a number of referral marketing features. Each member of a loyalty program can have their own special referral code, which they can use to share with others. The member who referred someone gets rewarded when the person they referred signs up using the code. For instance, a friend of a member could sign up to join your loyalty program, and in return, the referring member can receive, let’s say, $5 towards an appetizer of their choice at your restaurant.  

Loyalty Program Wallet   

As a means to streamline rewards and payment, it is crucial for loyalty software to include some kind of wallet functionality so there’s a place for points, coupons, and other rewards to be stored. Furthermore, it can also store a member’s payment information, allowing them to check out faster when logging into their account. We’re all familiar with the inconvenience of having to get up from our couch to retrieve our debit card to make that late-night purchase for an item we had our eye on. However, with the help of a wallet function, there’s no need to worry about that hassle! A customer has all of their payment in one spot to easily proceed with their online purchase.  

What Are the Benefits of Utilizing a Loyalty Management System?  

A Boost in Sales  

Programs that reward customers' loyalty have been shown to drive sales. Customers are more inclined to engage with your business frequently when they are rewarded, which results in recurring business and a higher lifetime value per customer. 

Efficient Business Procedures 

Managing an effective loyalty program is a challenging task. Compared to manual procedures, you can manage your program for your business on an entirely new level with an LMS. You can handle every facet of your program on a single platform thanks to a loyalty management system. The software centralizes the data for easy access and links to several touch points. 

Fraud Risk is Decreased 

The use of loyalty management software is vital for lowering the likelihood of fraud in your program. When you offer rewards to your audience, it's only inevitable that you'll draw some people who attempt to take unfair advantage of your generosity. People might attempt to register for many accounts, for instance, in order to get double benefits. To receive more benefits, they can even try sending referral codes to themselves. However, loyalty management software helps you keep an eye on your program and stop any abuse before it starts. To stop anyone from abusing your program, the LMS can evaluate the program data and look for unusual patterns. 

Customer Experience is Improved  

To give your customers a fantastic loyalty experience, you need to use loyalty software. The unified system will ensure a seamless experience for customers. By creating customer segments, you can guarantee that each member of your loyalty program receives the personalized loyalty experience they deserve. 

Enhanced Customer Data Usage 

Businesses have the chance to make more use of their customer data thanks to a loyalty management system. By integrating your data with an LMS, you can leverage the knowledge you have gained from each participant to increase the program's value to them. One of the best ways to retain customers is by sending personalized offers and recommendations to them, which can be successfully done with the help of a loyalty management system.  


It is well known that a strong loyalty program can be beneficial. That is why the vast majority of businesses invest in their programs to entice customers. It's imperative to remember that you must provide your customers with a valuable experience if you want to create a successful loyalty program, and everything begins with the right loyalty management technology. And if you're searching for a rewarding and engaging loyalty management system, look no further than Loyal-n-Save! We offer a user-friendly, customizable loyalty management solution suited for any business of any size, whether you own a large retail enterprise or you’re a small business trying to get your hair salon customers excited for more than just a fresh color and haircut. Looking to learn more about us? Get in touch with one of our specialists today to help give your business the fresh start it deserves. 

This article was written by Loyal-n-Save, an omni-channel customer loyalty solution for retailers looking to increase customer retention and new customer acquisition.
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Danielle Dixon
Written by Danielle Dixon

Danielle is a content writer at Loyal-n-Save. She specializes in writing about implementing loyalty solutions proven to help a company grow.

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