The development of long-term relationships between businesses with the aim of higher customer retention drives the category

Loyalty Program Category - Procurement Intelligence

The loyalty program category is expected to grow at a CAGR of 12.7% from 2023 to 2030. Incorporating customer loyalty into a business strategy is crucial. The expense of acquiring new customers is five times higher than retaining existing ones. Numerous businesses achieve customer retention objectives through the implementation of loyalty programs, exploring affiliate-marketing avenues, and providing discounts on a customer's subsequent purchase.

According to Queue.it 2023 report, around 85% of consumers are likely to stay with the brands that offer loyalty programs. Various companies, such as Starbucks, Amazon Prime, Sephora, and DSW, offer loyalty programs in the form of cashback points, card balances, and other benefits on subscriptions. For instance, Starbucks Rewards members can earn stars on every purchase, which can be redeemed for rewards, such as free drinks, food, and others. Similarly, the Sephora Insider Rewards system consists of 1 point equal to USD 1. Thus, the purchase of USD 500 leads to 500 points, which offers a discount of USD 10 on qualified purchases. Such initiatives by companies help them retain customers and increase repurchasing.

The ongoing trends, such as loyalty partnerships, gamification, tiered benefits, and personalization, are anticipated to boost the category growth. Most consumers are likely to purchase from businesses offering personalized experiences. With personalized programs, businesses can use customer data to create an offer appealing to each specific customer. For instance, Marriott Bonvoy offers a variety of premium amenities and benefits based on the number of nights customers spend at the hotel. A gold elite member at Marriott Bonvoy who spends 25 nights per year gets the option of late checkout, room upgrade, and other offers. Enhancing personalization elevates the frequency of positive interactions between brands and customers.

The shift towards digital platforms and mobile applications for loyalty programs is a significant trend. Businesses are increasingly adopting digital technologies to enhance user experiences and make participation in loyalty programs more convenient. Creating mobile applications for shopping provides an excellent means to provide a seamless, omnichannel customer experience. Additionally, it simplifies the process of collecting data on the shopping patterns of the customers.

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Loyalty Program Sourcing Intelligence Highlights

• Loyalty program operators have established prolonged associations with their service providers, including technology providers and software developers. As a result, such partnerships have enabled loyalty program operators to yield some bargaining power in their transactions

• Establishing a loyalty program requires significant investment in technology, data analytics, and marketing. Existing companies with well-established programs have a competitive advantage. However, new entrants with innovative approaches could still pose a threat

• The category is fragmented as numerous small- and large-scale participants strive to distinguish their services. They achieve this through engagements in partnerships, mergers, and acquisitions with technology companies or various brands

• Staff salaries, IT costs, staff training and management, and marketing costsare some of the costs incurred in providing services.Other costs usually include rent, utilities, and office supplies cost

Loyalty Program Procurement Intelligence Report Coverage

Grand View Research will cover the following aspects in the report:

• Category Intelligence along with emerging technology and regulatory landscape

• Market estimates and forecasts from 2022 to 2030

• Growth opportunities, trends, and driver analysis

• Supply chain analysis, supplier analysis with supplier ranking and positioning matrix, supplier’s recent developments

• Porter’s 5 forces

• Pricing and cost analysis, price trends, commodity price forecasting, cost structures, pricing model analysis, supply and demand analysis

• Engagement and operating models, KPI, and SLA elements

• LCC/BCC analysis and negotiation strategies

• Peer benchmarking and product analysis

• Market report in PDF, Excel, and PPT and online dashboard versions 

Cost Intelligence Highlights

Grand View Research has identified the following key cost components for the loyalty program category:

• Staff Salaries

• IT Costs

• Staff Training and Management

• Marketing Costs

• Others

  • Rent

  • Utilities

  • Office Supplies Costs 

Staff salaries and IT Costsform the largest cost components of the loyalty program category. 

List of Key Suppliers in the Loyalty Program Category

• Ascendant Loyalty LLC

• Kobie Marketing

• Emakina Group

• Gotoclient S.L.U

• Capillary Technologies

• XGate Corporation Limited

• Zinrelo (Velocita, Inc.)

• Exponential Media

• Loyalty Gator Inc.

• LoyaltyLion Ltd.