Loyalty Program Management Software or Traditional Loyalty Programs

Customers are the final point in a sales cycle that drives business revenue, but getting to that point depends on the efforts and hard work of the channel partners and influencers (last-mile advocates). This explains why building loyalty among them is a need of the hour.

However, the main focus is on choosing between an advanced loyalty program management software and traditional loyalty programs. With the pros and cons involved in both aspects, there remains an ongoing question of, “Which is a better fit for my business?”

This comprehensive 1Channel guide will take compare loyalty management software and traditional loyalty programs to deduce which one is a better fit for your business.

Traditional Loyalty Programs: Pros, Cons, and Limitations

Starting with the most commonly used route of loyalty programs, the traditional routes. These usually involve tier-based rewards, discounts, and periodic bonuses. The biggest different between traditional loyalty programs and the loyalty management software (LMS) is the integration of technology.

Over the last few decades, especially when the advent of technology hadn’t infiltrated business operations, traditional loyalty programs have been the mainstay for most companies and continues to be for several businesses to this day.

To better understand how these compare to a loyalty management program, we will take a closer look into the pros, cons and limitations.

Advantages of Traditional Loyalty Programs

1. The biggest benefit that you can reap from traditional loyalty programs is the “no fuss approach” wherein the reward programs are easier to curate and execute. Furthermore, the channel partners and influencers that had been associated with the business for long are already accustomed with the process, creating a sense of normalcy and routine.
2. For small businesses, integrating a separate loyalty management platform can be an extra expense. So, with traditional loyalty programs not involving the use of any technology, it becomes a more cost-effective option for such businesses with limited resources and capital.
3. Another benefit of traditional loyalty programs is the customisation and flexibility options. Businesses can switch up the perks and bonuses based on actions, performance, revenue, etc., instead of having to stick to a pre-numbered requisite.

Challenges and Limitations of Traditional Loyalty Programs

1. While the benefits are profound with a traditional loyalty program, the biggest limitation is the lack of scalability. In industries where you have diverse channel partners and stakeholders, managing and scaling the loyalty program “manually” without the integration of technology becomes extremely complex.
2. Not only is it time consuming but manually managing the traditional loyalty programs is also costly since it requires extra resources.
3. Traditional loyalty programs rarely offer any kinds of insights into the performance and engagement of the channel partners and influencers, making it difficult to personalise the rewards based on the outcomes.
4. Since these loyalty programs have minimal to no technology integration, it is impossible to capture in-depth insights about partner behaviour and preferences.

As a business that is trying to foster a more meaningful and enduring relationship with their channel partners, the lack of personalisation and scalability with traditional rewards programs can be a hindrance.

Loyalty Management Software: A Technological Leap in Partner Loyalty

On the other side of the traditional loyalty programs is the loyalty program management software, which is transforming the way partner loyalty is being fostered across industries.

The inclusion of the advanced technological tools in such software provide insights into the partner’s behaviour, performance and the overall revenue from the sales. These platforms are specifically developed to offer a complete ecosystem that drives personalised engagement and make the channel partners and influencers feel fairly compensated with optimal transparency and access to real-time data.

Advantages of Loyalty Management Software

1. When it comes to running a business, the biggest goal is expansion and scaling. With the best loyalty management software, businesses get to prioritise scalability for growing networks. This means that if your distributor count has gone from 10 to 100 and the number of retailers has gone from 20 to 200, the loyalty management software will adapt to those growing numbers.
2. While there is an upfront cost for setting up a loyalty management program, the automated tracking, data collection and reporting takes out unnecessary costs that the businesses would otherwise spend. This, in turn, makes the use of LMS a cost-effective alternative in the long run.
3. The biggest benefit of an LMS is enhanced partner engagement with personalised dashboards, interactive portals and real-time communication tools.

For companies in industries such as manufacturing, FMCG, telecom and more, loyalty management software stands out as a superior solution for loyalty management.

1Channel: Tailoring Loyalty for Your Partner Ecosystem

The right choice ultimately depends on the size, scope, and goals of your loyalty program and the partner demographics you aim to engage. While traditional loyalty programs have been the go-to for businesses for decades now, things are switching and shaking up now. If you want to keep your channel partners and influencers appeased and motivated, the need for loyalty program management software is vital.

1Channel’s LMS is designed to cater to the needs of specific businesses and their networks. If you are ready to make a switch from traditional loyalty programs, book your free demo today!