The global loyalty management market is expected to reach $20,44-billion by 2030, growing at a CAGR of 9,2% from 2024 to 2030, according to the recent reports from Grand View Research.
Loyalty management software helps view realtime data about how customers engage with the brand. Access to this information enables organisations to develop innovative and effective strategies for improving loyalty programmes and the brand. The software can also create individual profiles for each customer. In addition, based on customers’ behaviour, organisations can analyse and understand customer engagement, subscription utilisation, and usage frequency. Customer Service Managers (CSMs) create campaigns and strategies to target required customers for increasing customer retention, customer satisfaction, and customer engagement.
Around 60% of Internet users cite receiving rewards as a valued aspect of retail shopping. Online reward programmes help increase the company’s overall revenue by 5% to 10%. According to Forbes, approximately 80% of online shoppers shift to a competitor if they experience bad customer service in the initial period. Intensifying competition among brands has become essential for retailers to satisfy their customers and prevent them from switching to other brands. Furthermore, as smartphones and mobile devices are becoming faster and smarter, communication and the exchange of information is becoming more convenient and efficient.
This is expected to boost the demand for online shopping, leading to an increasing demand for loyalty management.
A rapid increase in the number of smartphone users suggests that more individuals are exposed to online ads and prompted to consider online shopping. The number of individuals owning a smartphone or using the Internet remains high in developed economies, whereas it is increasing in emerging economies. The growing number of Internet users – particularly in the developing economies of Latin America, Middle East, and Asia Pacific – is expected to contribute to industry growth.
Therefore, the rising usage of smartphones and the Internet, coupled with rising consumer preference for online shopping, will boost market growth.
Additional highlights of the report include:
• The service segment is expected to register a CAGR of 9,6% from 2024 to 2030. The increasing competition in various industries including retail, hospitality, and financial services has prompted companies to adopt loyalty programmes to differentiate themselves and retain customers in saturated markets.
• The channel loyalty segment is expected to register a CAGR of 9,8% from 2024 to 2030. Many businesses combine their loyalty and referral programmes to enhance engagement and client count. Giving referral codes or assisting in the addition of a new client is also a tactic to increase engagement while paying the referrer with a reward such as discounts, coupons, and free months of subscriptions which enhances the organisation’s revenue and sales.
• The managed services segment is expected to register a significant CAGR from 2024 to 2030. Managed services help businesses focus on core competencies while leveraging the expertise of specialised firms to design, implement, and maintain their loyalty initiatives.
• The business-to-business segment is expected to register a considerable CAGR from 2024 to 2030. Loyalty programmes specialise in implementing and developing loyalty solutions that cater to the unique needs and dynamics of B2B relationships.
• The cloud segment is expected to register a CAGR of 9,8% from 2024 to 2030. As companies become more focused on cost-effectiveness and scalability, cloud-based loyalty-based solutions are becoming increasingly popular in the market.
• The growing popularity of cloud-based solutions encourages various cloud service providers to expand their businesses. For example, in July 2023 IBM launched a new cloud region in Madrid, Spain. This new cloud region comprises three data centres in Madrid, Las Rozas, and Alcobendas.
• The SME segment is anticipated to grow at a CAGR of 10% from 2024 to 2030. The benefits of cloud-based deployments including cost savings and compatibility with their customer relationship management (CRM) systems entices small- and medium-sized businesses to choose cloud-based loyalty management solutions.
• The hospitality segment is expected to register a CAGR of 10% from 2024 to 2030 due to the increasing adoption of loyalty management solutions by various restaurants, hotels, and resorts to enhance their customers’ experience and loyalty to the brand.
• Asia Pacific is anticipated to emerge as the fastest-growing region at a CAGR of 10,3% from 2024 to 2023 due to SMEs’ increasing adoption of loyalty management solutions to attract potential audiences and gain a competitive edge.