The loyalty application market has changed. Gone are the days when large agencies would build a stand-alone custom solution for Fortune 500 brands. This approach is breathtakingly expensive and prone to major technical challenges. Traditionally, loyalty management has been an agency-led model where a brand would work with agencies to design and deploy a loyalty program. Some of the finest programs in the history of loyalty have been designed in this fashion but like any other industry, technology has revolutionized loyalty marketing as well. And SaaS (software as a service) is making a case for itself. 

Market overview and what is SaaS

The loyalty management market is estimated to be more than $10 billion and the USA is the most advanced in terms of acceptance. Most of the major brands have had ongoing loyalty programs and for many of them, Loyalty is a separate business line in itself. For instance, in the first six months of 2023, Delta reported cash sales from loyalty marketing agreements worth $3.4 Billion, or approximately 12% of their revenue over the same period (read more).

With the advent of cloud-based technologies (AWS arrived in 2006), a loyalty SaaS offering also came into the picture, and at Capillary Technologies, we’ve had the privilege of being one of the pioneering companies offering a SaaS platform for loyalty marketing (we started in 2008). Software as a service is basically a platform that brands can use to implement loyalty programs in a quicker, more flexible, and more cost-effective manner. 

Why choose SaaS over any other approach

There are multiple reasons why brands are opting for SaaS technology over the traditional agency-led approach. 

• Flexible & Cost-effective

With SaaS, a brand doesn’t have to invest as much in technology resources, worry about integrations, or take a large risk. Brands can choose to start with a small pilot and scale as they succeed. The SaaS provider does all the technological heavy lifting of managing data and having integrations in place through APIs so that it can work with your existing technology systems. Along with this, SaaS platforms also offer a high degree of flexibility. 

For example, a large conglomerate in the Middle East shifted from an agency-led model to Capillary because it wanted to do a lot many things with its loyalty program and deliver a superior customer experience. Early in September, the brand wanted to go live with more than 50 employee offers, 26 promotions (including six cashback deals), and a game – all in one day. And this wasn’t part of the earlier plan but they could still do this easily and efficiently with Capillary. If this were repeated on any agency model in the USA, customers would need to spend around $300K as a change request on developing and delivering these promotions by coding on the platform. It would have taken at least 2 months to deliver! But with a SaaS platform, this is instantly possible and without any extra cost.  

• Get the best product offering

Taking forth the first point, this is also possible because a loyalty SaaS platform has a product roadmap in place. Customers get access to the best in class technology which is being built by working with more than 250 brands across industries. 

Capillary’s platform with its suite of products- Loyalty+, Engage+, Rewards+, Insights+; sitting on top of a powerful consumer data platform has touched more than a billion end customers and has offerings with learnings from implementing more than 100 enterprise loyalty programs. 

Developments in the field of emotional intelligence (BLQ and Yawye partnership), investments in AI technology, nudge framework, and such results in pathbreaking features that would help loyalty marketers run better programs, delight customers, and achieve business goals. These features are not being built for a specific brand but the product roadmap is built with every sector in mind and any development gets rolled out to all brands on the platform.  

• Faster go live

Another big advantage of headless technology like Capillary is the extensive integration marketplace it comes with. For any brand, it is inevitable that it’ll have a number of technology systems in place, and for a new one to be implemented, it has to be compatible. Capillary comes with integrations for POS systems, to communication gateways to social integration, and more. Through APIs, a brand can connect to many of the major systems to ensure seamless data flow. With existing integrations, there is minimal technology resource requirement from the brand’s side which lets it go live much faster.  

• Ensured data privacy & security

In the modern digital age, consumers are increasingly concerned about their personal data and it becomes critical to have airtight data security. For a brand to do this in-house is an uphill task considering this isn’t their forte. In an agency-led model, more third-party consultants would need to be brought in to ensure compliance. But in case of a SaaS platform like Capillary, it inherently needs to be compliant with regulations like GDPR, CCPA & PDPA for it to be able to offer its services across the globe. This again means that the brand can focus on what it does best and leave the data privacy regulations to the SaaS platform. 

Conclusion- With Capillary+Brierley, get the best of both worlds

As an enterprise brand looking to expand on your loyalty program or build a new one, you get the best of both worlds with Capillary Technologies. How? Earlier in 2023, Capillary acquired Brierley+Partners which is a renowned loyalty consultant with its marquee BLQ (Brierley Loyalty Quotient) for measuring emotional loyalty. Along with Capillary’s best-in-class technology platform (a Leader on the Forrester Wave), clients get an excellent combination to deliver great RoI-driven loyalty programs.  

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Sridhar Bollam is the co-founder of Capillary Technologies and currently serves as the Chief Customer Officer, North America. An IIT Kharagpur alumnus, Sridhar has more than 15 years of loyalty management experience and has played a key role in Capillary's success over the years.