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Customer loyalty programs -- pricing for vendor programs vs. homegrown programs

Michael Lowenstein EXPERT RESPONSE FROM: Michael Lowenstein

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QUESTION POSED ON: 05 September 2006
My company is considering purchasing a loyalty solution or starting our own loyalty program. If we decided to buy an off-the-shelf solution, what can we expect to pay? What is the typical industry price range for a loyalty solution -- both set-up and ongoing/maintenance fees? Could you please recommend any helpful sources to help us perform a cost evaluation?

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EXPERT RESPONSE
While I'm not a strong proponent of off-the-shelf, or cookie-cutter loyalty programs, the best resource for this kind of information is Colloquy, a company responsible for many of the major players' loyalty programs. Another great resource is The Loyalty Guide, an encyclopedia of loyalty program information published by The Wise Marketer. As a rule of thumb, any program designed to optimize desired loyalty behavior should be customized and empirically tested for effectiveness, because customers of different suppliers have varied needs and perceive value in different ways.


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