By now, you’ve probably caught wind of some changing perspectives in the loyalty industry.

Many businesses are beginning to recognize that transaction-based programs (those that reward customers based solely on spend/frequency) are losing their effectiveness. Meanwhile, programs that reward customers for other loyal behaviors are gaining traction. 

Loyalty is also becoming a business-wide function, driven by better customer experiences – rather than the sole responsibility of the loyalty program and the team that runs it.

These changes are all happening in response to shifting customer expectations – and those expectations are rising pretty fast. So if your current platform can’t support these initiatives, you’ll need to upgrade it (or “replatform”) within the next couple of years.

But if you’re like most marketing teams, you’ve got a lot of ideas and initiatives on the whiteboard. How do you decide whether migrating to a new loyalty platform is a high priority?

 

Signs it’s time to replatform

If your program is suffering from three or more of the following ailments, it’s a good indicator that your tech (and strategy) need an update.

 

1. Member engagement is low

The problem with low member engagement is obvious – if members aren’t engaging with the program, then they aren’t deriving value from it. And that means your program loses its opportunity to nurture loyalty. It can also lead to high points liability, which puts your business at risk.

To spot low engagement, look for a combination of declining enrollment, low reward redemptions, and / or fewer points being earned. 

But remember that low engagement can be caused by a number of factors – from lackluster rewards to a customer-facing portal that’s simply too awkward to use. And not all of these factors are platform-related. 

Before making a decision, then, try to determine the cause of poor engagement – and decide whether your software is holding you back from fixing it. If it is, it’s time to put replatforming on the to-do list.

 

2. It’s all about the transaction

Emotional connections beat transactional ones when it comes to building loyalty. And these connections happen when customers feel recognized, appreciated and valued. 

Unfortunately, many “legacy” loyalty platforms are limited to rewarding customers’ spend or frequency. They can’t recognize other behaviors that indicate loyalty. And often, they fail to personalize the program experience in a meaningful way. 

Ideally, a modern loyalty program should reward customers based on their behavior. Things like advocacy, engagement with brand content, attending an event or mastering a product feature. And everything about the experience – from the marketing messages a member receives, to the rewards they see first when they log-in to the loyalty app – should be tailored and relevant to them.

If your current platform can’t enable these things, your program will struggle to compete.

 

3. It’s expensive to update the software or make changes to the program.

Legacy platforms (and homegrown solutions) can be difficult and costly to upgrade – which is a problem when customer expectations change as quickly as they do. To continually deliver value and relevance to your members, your program must be able to adapt quickly.

But when you have a bespoke solution, you’ll often find that any updates to the underlying software aren’t compatible with your customized version right out-of-the-box. Rather, it will require a more manual approach to get the latest features live, generally for a fee. 

If you’re program is built in-house, changes are cheaper. But they’ll probably get prioritized alongside all the other tasks on your IT team’s to-do list, which means they may take longer than you’d like.

It’s also important to be able to optimize your program – testing new rewards, point-earning mechanics, redemption processes and so on. But with some solutions, changes like this often cost too much or take too long to really be worth it. 

A good platform should enable you to access the latest tech, and make changes to program design, with relatively low cost and minimal wait times. Without the ability to continuously improve your approach, you’ll see lackluster results. 

 

4. You’re struggling to measure ROI.

Flush with customer data, loyalty programs should be able to show that members purchase more than non-members – and more than they did before they joined the program. You should also see things like increased advocacy, higher lifetime values, and improved engagement.

But loyalty programs often end up siloed from other platforms and data sources, meaning it’s difficult to paint a full picture of the impact on members’ relationship with the brand. Without a way of proving your results, you’ll struggle to show other stakeholders the value of the loyalty program. 

Your platform, then, should integrate well with the other systems in your business. That way you can join up customer data from various touchpoints to understand how your program is shaping loyalty and behavior. A good loyalty platform should give you a snapshot of your program’s impact, as well as the ability to export all relevant data for deeper analysis.

 

5. You can measure ROI…there just isn’t any.

Being able to report on your program’s ROI is great – but it’s little consolation if all the charts are showing a downward slope. And if any of the above points resonated with you – especially low engagement or a focus on transactions – it’s pretty likely you’re seeing some disappointing results. 

But like low engagement, a lack of ROI can be caused by a number of factors – a platform is just one piece of the puzzle. And the best tech in the world can’t make up for an ineffective loyalty strategy. 

At the same time, tech enables your strategy to be implemented well – so it’s important to work out (quickly) what’s causing your program to falter. 

For example, if you’re also struggling to reward customers for behaviors beyond purchase, you’ll probably need a combined update of strategy and platform. On the other hand, if you’ve identified dull rewards as your biggest problem, there’s a chance you can correct that without switching software, depending on the capabilities of your current platform. 

Either way, if it’s clear that your program isn’t having much effect on things like retention, repeat purchase, or other key objectives, something needs to be done.

 

Great tech + smart strategy = success

Replatforming is a big project and shouldn’t be undertaken lightly. That said, if your existing platform isn’t fit for purpose, it’s worth prioritizing the search for a new one. Having the right tech to support your loyalty strategy has significant impact.

So if three (or more) of the factors above sound familiar, it’s time to add a platform migration to your list of projects. Before you go any further in the process, why not download The Ultimate Guide to Replatforming? It’s full of useful tips for every stage of the replatforming process, to help you get your project running smoothly.

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