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How to choose between a connected or integrated loyalty platform
March 2021
When
considering building a loyalty platform you can make the distinction between loyalty platforms that are just ‘connected’ on a technical level versus platforms that are completely ‘integrated’ with your business and systems. Both types of loyalty platforms have their merits. There are a lot of things to consider, but it always starts with your customer loyalty strategy and the scale at which your company operates. Smaller organizations often operate in smaller markets, making them less demanding in terms of requirements for a loyalty platform. They can benefit greatly from the standard functionalities SaaS solutions provide. Organizations that operate at scale (internationally) must often balance the needs of many stakeholders, resulting in complex requirements that are not completely met by features that come straight out of the box. For them, the relative investment in a custom-built platform is also lower and makes for a better business case compared to smaller companies, especially considering the control and flexibility it provides. For them, the relative investment in a custom-built platform is also lower and makes for a better business case compared to smaller companies,
especially considering the control and flexibility it provides. In the end, every company is different and there is no right or wrong. Find the solution that best fits your situation. Here are some thoughts that will help you to decide:
In the end, every company is different and there is no right or wrong. Find the solution that best fits your situation. Here are some thoughts that will help you to decide:
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Customer Experience Loyalty is generated by customers interacting with your company. Loyalty communication, like creating awareness, priming behavior with loyalty cues or showing appreciation after specific customer behavior; it's all done in your existing channels. You want the experience of such digital components to be completely in line with your brand and the related design system. Make sure the solution you go for offers enough freedom for you to integrate notifications and messages in a way that customers won’t notice the difference. If you want to use personalization for such components, make sure all your available data and algorithms work with the content system that handles the loyalty messaging. This also applies to other customer related systems. Make sure customer service, CRM, email clients and invoicing all seamlessly connect to your loyalty platform.
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Data & security You want to be 100% sure that you stay in control of the data. Data is arguably the most valuable asset in the world right now. Storing personal data or running it through an external party should not be taken lightly. Most SaaS platforms keep customer data in their own system. Involve your compliance department to check whether the security measures are in line with your security standards. The question is however, if you want customer data, partner data or (virtual) currency to live in another location at all. Having data stored in multiple locations can be harder to maintain, cause synchronization issues and make retrieving data more laborintensive.
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Management features A large part of making a loyalty program successful has to do with how well you can manage it. This is where SaaS platforms shine. There is often an abundance of powerful, user-friendly features and automation options. If your loyalty strategy is in line with the design philosophy behind such systems, those features will help you a lot. Deviating from the standard offer can prove problematic.
Apart from this there are two other things to consider: How much of this functionality is available in other systems you have, and will that lead to issues? And, will the people working with the platform actually use them?
Often, the more advanced features are never touched by employees, because they don’t imatch how they work or think. If they don’t need such features to be successful, chances are they will not use them, and you might want to go for a cheaper subscription. Or, in case of a custom-built integrated platform, features will only be made per request of your team and it’s smooth sailing from there.
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Localization Companies that operate in multiple countries or have plans to do so, will encounter different needs and business requests from different countries. Laws around loyalty offers will differ, market needs will var, and cultural differences will apply. Make sure the platform you choose can handle local differences. Think about how you will govern local loyalty teams and if you need your loyalty platform to be able to support that (approval systems, rights management, etc.). Then, there are language (and currency) settings. Chances are you already have a content platform set up to manage languages in a specific way. Make sure your loyalty platform can use the same setup. Or, even better, leverage your existing content platform to also manage loyalty content as well. That way content creators can use the same image libraries and content processes already present in your company.
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Flexibility The larger your business, the more likely it is you will have to deal with internal politics and departments with conflicting targets. Since loyalty will be affecting a lot of different departments, your loyalty team will have to compromise to get things done. They will need the platform to be flexible instead of the other way around. Luckily SaaS predefined features are set up to deal with the most common needs for customization. But there are limitations and especially in large corporate environments that can become a burden, fast. Make sure that you have a good relationship with your SaaS provider. You don’t want to be last in line when requesting new features, after all. Or investigate setting up a custom platform to avoid this altogether.
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Technical integration If you build a custom platform, you can design it to integrate with your systems from the start, minimizing the need for excessive synchronizations and thus reducing the time it takes to hook up to the rest of the IT landscape. On the other hand, most third-party platforms support predefined technical integrations to a set of wellknown systems (some offer open APIs).
This can speed up initial integrations, but doesn't mean that it’s all plug and play. In almost all cases, you will still need to configure your connections. For instance, the way your data is set up in your existing systems might not be compatible with how data works in a loyalty platform, requiring you to set up translation tables. This can be a lot of work and quite honestly, annoying.
Also, make sure to investigate what ‘straight out of the box’ technical integrations really do. Descriptions can be vague, so read up on their API tech descriptions and estimate how much time and effort it takes to set it up the way you want. Finally, think about what these integrations mean for your data management (and security). In other words: involve your IT department early.
Involve your IT department early in this
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Lock-in When setting up a loyalty program for your customers, you are building a long-term relationship. Changing the rules or how things work is something that must be done carefully. Think about this when choosing a provider (and, to a lesser degree, when building a custom system). With any loyalty platform, business rules
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and logic structures into that system. It can be hard to move that intelligence somewhere else after. Some SaaS providers are not optimized for their customers migrating to a competitor. For custom platforms there is less reason to migrate. And if it does occur, at least you will be in control.
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IT capacity Setting up a loyalty platform will always require some development capacity. Setting up a SaaS platform will greatly reduce the effort your IT staff has to make since the platform itself is already built. Integrations and configurations, however, still must be made. When building a custom platform, you will be leveraging existing platforms way more, but the core features still must be developed. Once you are done with that, continuous optimization of your own platform will probably cost you less in resources than subscription fees to a SaaS provider. If capacity is a problem, but an integrated platform is a better fit to your organization, you can always hire a third party to build it for you. This is what Just Eat Takeaway did when they hired INFO. We built their custom platform on their systems, in their programming languages so that they can take over once their IT department has more breathing room.
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Costs
Most SaaS loyalty platforms have different pricing levels per month. Costs are relatively low considering how much functionality you get. The general rule of thumb is that having more customers in your program or wanting more types of integrations will cost you more. For large companies that operate worldwide this can ramp up fast. Initial costs for a custom platform can vary. Initially, your costs per month will be higher than with a SaaS solution, but over time the system will flesh out and cost will be minimal. Additionally, you will not be paying for features you don’t need and there will be a perfect fit to your IT landscape saving you costs on workarounds or unnecessary maintenance.
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Want to learn more about how you can choose the right loyalty platform? Contact: Floris Nijdam Strategy & Design Lead Floris@info.nl
We are INFO, your digital partner. We’ve been translating your business challenges into digital products with impact, since 1994. Together with our team we define, design and develop solutions that make our clients future-proof. Enabling organizations to innovate towards the future, and create meaningful products that improve people’s lives is what we love to do best.