Insights Of The Loyalty Programs Market [Best Guide]

Loyalty Programs Market

Loyalty programs encourage people who shop at particular businesses to continue using the business’s services. Over the years, loyalty programs have become one of the top marketing tools used by businesses all over the globe and they continue to be on the rise.

The global loyalty programs market had a value of more than $172 billion in 2018. In the same year, the market size of North America was $72 billion while Europe’s market size was $36 billion. Asia Pacific’s loyalty program’s market size was $27 billion at that time.

According to Beroe, procurement intelligence experts, the global market of loyalty program services will reach up to $216 billion by 2022.

Loyalty Programs Market- Countries & Regions

Beroe estimates that the loyalty programs market will grow at a CAGR of 6% until 2022. There are many high market maturity regions. These include Egypt, the UK, Australia, Singapore, France, Nigeria, South Africa, China, Germany, UAE, Japan, Hong Kong, and the east, west, and gulf coast of the US. The medium market maturity regions are many too.

These include Vietnam, India, Mexico, Portugal, Korea, Argentina, Morocco, Spain, Chile, Brazil, Poland, Canada, and central US regions. Beroe estimates that the loyalty program’s growth in the future will be driven by parts of the LATAM region and APAC.

As e-commerce is increasing in all regions of the world, the loyalty programs industry is booming and it is showing signs of growth in the future. Especially in regions outside of North America and Europe are showing interest in loyalty program services.

It is the APAC region that is likely to grow more than the Middle East and African regions. This is because the APAC regions are more willing to adopt loyalty program services as they have global and regional suppliers along with technology programs that are required.

The African and Middle East regions are behind APAC on the adoption rate because they do not have the technological advancement required and there are infrastructure limitations too.

Program Service Providers

The top global service providers of loyalty programs market are Maritz Motivation, BI Worldwide, Blackhawk Network, Dunnhumby, Collinson Group, Aimia, and Connexions Loyalty. There are many cost components that drive the price. But the main cost driver is the rewards to the customers which can account for anything between 65% and 75% of the total cost.

The key performance indicators are the quality of the particular loyalty program, how quickly the queries are resolved, the quality of the program, and how quickly a problem or issue is resolved. The industry trends indicate that the loyalty programs market is doing well and will continue to grow.

The suppliers of the loyalty programs market are improving the quality of their supply. They are doing this by using metrics to monitor how the customer loyalty program is doing and how the different channels are contributing.

The constant improvement in the supply is likely to push the growth of the market even further in the future. Beroe has found that one of the trends in the industry is that e-commerce is increasing the demand for business to customer loyalty.

On the other hand, customer retention is driving business to business. These are leading to the outsourcing of loyalty programs services. The main aim of marketers has become to safeguard their brand so it remains unique.

Loyalty Programs Participation Efforts

The Middle East is doing its bit in trying to push the participation of customers in the loyalty program since it has been low in the past. It is doing this by investing in tools such as those for business intelligence and analytics to better understand the market and the customers.

Through this newfound information, the region will be able to improve the loyalty programs and to grow in the market. They will be able to tailor the rewards according to customers and give proper incentives to customers which can help the growth of the industry in the Middle East. In the future, the other regions can follow suit to improve the market.

There are numerous drivers that will help boost the loyalty programs market. One of them is the cost benefits that come with outsourcing. The technology platform requires investment at the beginning which is during creation.

Once this is done, it can be customized according to the client’s needs. This means higher margins for the supplier in the long term. Another driver is operational benefits whereby buyers are able to have control over the service levels in more than one location.

Performance indicators can help push productivity higher and cost will be saved. Constraints such as subcontracting practices must be kept in mind to ensure they don’t hinder the market growth.

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