In the current landscape of fickle consumers and countless brands, customer loyalty is the Holy Grail. To help companies reach that Grail, a new Forrester Wave reports looks at the loyalty service providers that are most successfully inducing customers to keep coming back.
The report, “The Forrester Wave: Loyalty Program Service Provider, Q4 2013,” points out that loyalty service providers have evolved way past points or discounts, to building relationships centered on customer value and engagement.
The market for such providers is growing, the report said, because of marketers’ needs to differentiate and to obtain resources they do not have internally, including technology, advanced analytics and expertise, all of which can be differentiators for acquiring loyalty.
Forrester found several commonalities among the providers. “Every vendor we evaluated,” the report said, “provides a packaged platform that requires configuration – not customization – to meet client requirements,” so platforms can get up and running faster than earlier customized, sometimes one-off solutions.
Vendors are also providing more strategic services, such as the predictive and industry-specific analytical models from Aimia and Brierley+Partners, and there’s more of an emphasis on relationship management than the “do this, get that” model.
The vendors were evaluated against 61 criteria, and each of the chosen vendors have a comprehensive set of loyalty service offerings, demonstrated market momentum and strong interest from clients. The top Leaders are Brierley+Partners, Epsilon, Kobie Marketing, Maritz Loyalty Marketing and Aimia, followed by two Strong Performers – Olson 1to1 and Tibco Loyalty Lab. Connexions Loyalty was the only vendor in the Contenders category, and none were selected as Risky Bets.
Leaders, Strong Performers
Epsilon, back for a second time as a Forrester leader, is praised for its investment in improving its middle-of-the-pack technology functionality and for upping its product development. Also a second timer in this category, Brierley+Partners has the best customer references of all the surveyed vendors. Maritz Loyalty Marketing employs a psychological approach to loyalty strategy and is cited as a strategic partner and thought leader, although it is dragged down by “lagging technological capabilities.”
Aimia is the largest vendor examined in the report, and its international presence, loyalty analytics and program operations in particular received commendation. The fast-growing Kobie Marketing is praised as having the best current offerings of all the surveyed vendors, as well as high marks for loyalty technology functionality, collaboration and understanding of client’s needs.
Tibco Loyalty Lab, one of the two Strong Performers, features a self-service technology platform, although it had the lowest customer reference scores. The other Performer, Olson 1to1, is the “youngest provider” evaluated since it started in this area as Denali Marketing in 2006, and it scores well for flexibility and responsiveness.
The Only Contender
Connexions Loyalty, the only vendor in the Contenders category, provides what Forrester calls “a reasonable offering for financial services, travel and automotive clients looking for deep vertical experience and robust rewards catalogs and fulfillment features,” but is dinged for a lagging strategy.
Overall, this report provides a top-level evaluation of selected providers in this increasingly important field. But a better picture of what these vendors actually provide in terms of differentiating services and products would have helped.
For instance, what are some of the loyalty programs vendor X frequently recommends and why? Or, if Maritz Loyalty Marketing’s “special sauce” is, at least in part, its psychological approach to loyalty strategy, what does that entail? One of the key takeaways from the report is that the vendors “don’t just support points programs,” but build customer relationships – but how, and how do the vendors differ in this? Perhaps Forrester’s next iteration of this report could offer a ground-level sense of how a given vendor’s approach might be utilized in a client’s efforts.