Loyalty programs are key to customer retention. In today’s digital age, software-as-a-service loyalty solutions (SaaS loyalty) have emerged as a powerful alternative to traditional loyalty solutions. However, there’s still a wide range of non-SaaS loyalty solutions, each with its own set of unique features and benefits.

In this blog post, we’ll look at the pros and cons of both SaaS and non-SaaS loyalty solutions. By the end of this article, you’ll gain a better understanding of which loyalty platform is best for your business.

The alternatives to SaaS loyalty

Businesses have several options when it comes to loyalty programs, each with their own advantages and disadvantages. Here are a few popular loyalty solution alternatives:

1. Simple loyalty platforms: Simple technologies were created to allow for a digitized version of the old cardboard punch cards. These types of programs are popular with high purchase frequency organizations. They’re effective in rewarding repeat purchasers. The downside of these platforms and programs is that, ultimately, both are extremely limited in functionality and capability. A true loyalty program can bring you and your organization much further.

2. Email service providers: This isn’t loyalty per so but gives you a way to collect a simple database of email addresses to communicate with your customers. An email strategy will allow you to collect basic information from your customers and communicate on a regular basis. An email service provider vs. a loyalty provider can support this effort.

3. Ecommerce loyalty platforms: There are a number of loyalty providers focused on loyalty for ecommerce brands. These platforms are developed to support transaction tracking, track spend to a specific amount and trigger discounts. Some of these platforms may also offer the ability to earn points, then redeem online. These are great starter solutions. If you’re looking to expand to brick and mortar or collect customer data, you’ll want to consider a more sophisticated solution.

4. Custom or bespoke loyalty programs: Customer loyalty platforms allow an organization to build their loyalty program to a specific specification. The platform will have exactly what the specifications of the strategy are—no more, no less. This is a great solution until you need something you didn’t foresee in the initial specifications, or you want to jump on a new trend. It’ll take significant investments of time and money to make that happen.

5. Platform-as-a-Service (PaaS): This type of platform has a foundational element of data management, including rules engine and other core loyalty functionality. Then the platform provider will build out your strategy specifically to your specifications. These platforms are typically less expensive and faster to market than a custom solution. Yet, there’s still significant cost and time required to build out your vision. This option will also mean longer lead times and additional budget to add features and functionality.

6. Software-as-a-Service (SaaS): This type of platform has one code base that all customers use. All the features and functionality are available to all customers. Each customer configures the (no code) platform to their specifications. Adding to your program or running new campaigns down the line can be done with a few simple re-configurations that take minutes. In addition, because all customers are using the same code base, the platform gets richer with each new client. When clients have additional requirements, those are added via frequent sprints, typically at no cost to the client.

No matter which loyalty platform you decide to use, all have the potential to encourage customer loyalty and generate repeat business.

Pros and cons of custom loyalty platforms

Custom loyalty platforms provide customized solutions for loyalty initiatives that are tailored to meet the needs and goals of a business while considering its products, target audience and brand. A well-designed custom loyalty program can increase customer engagement and encourage repeat business.

The major advantage of custom loyalty solutions is they can meet specific requirements without sacrificing features or functionality. Brands can ensure their loyalty program accurately reflects the values of their brand while providing tailored experiences by leveraging customer loyalty data. It can also be easier to develop comprehensive analytics capabilities with a custom platform, allowing businesses to better understand their customers’ behaviors and preferences.

Custom loyalty solutions typically require a larger upfront investment due to their design and implementation costs. Customizing a loyalty platform also requires significant technical expertise and resources to manage ongoing development and maintenance requirements.

For businesses seeking full control over every aspect of their customer loyalty program, a custom solution may be the right choice—but it’s important to carefully consider the costs and challenges that come with it.

Pros and cons of Platform-as-a-Service (PaaS) loyalty solutions

Platform-as-a-Service (PaaS) loyalty programs offer several advantages and disadvantages. On the plus side, PaaS loyalty programs provide a straightforward way to deploy loyalty programs, as well as the ability to modify the loyalty program as needed. PaaS loyalty programs also offer a range of analytics and data-driven features, giving them the ability to track customer behavior and create more targeted campaigns.

However, there are some drawbacks to PaaS loyalty programs. While PaaS solutions make it easy to build a loyalty program, they’re often limited in scale and it’s costly to develop new features or functionalities, even if the provider has already developed them for another client.

Many PaaS loyalty programs are offered as part of a larger suite of services, which can increase the overall cost of the loyalty program. PaaS loyalty programs may also require specialized technical knowledge to set up, making it difficult for businesses with limited technical resources to take full advantage of the platform.

PaaS loyalty programs can be a great option for businesses that want to quickly deploy loyalty programs and take advantage of data-driven features. However, businesses should weigh the potential costs and resource requirements against the potential benefits of a PaaS loyalty program before deciding to move forward.

Pros and cons of SaaS loyalty solutions

From data security and scalability to quick time-to-market capabilities, SaaS loyalty solutions offer a myriad of advantages compared to traditional loyalty vendors and services. These solutions can be integrated with other cloud-based systems such as CRM and ecommerce platforms for a more comprehensive view of customer behavior.

Here are some of the key benefits of choosing a SaaS loyalty solution:

• Easily and affordably accommodate business growth

• Gain instant access to new features and functions to maximize your competitive advantage

• Gain insights about customer behavior to inform more timely, relevant campaigns and rewards

• Drive more meaningful customer engagement with personalized experiences

• Leverage built-in analytics to quickly and easily evaluate performance

• Make informed decisions & create targeted marketing campaigns that drive better results

• Access your loyalty solution from anywhere with an internet connection to enable on-the-go productivity

• Easily budget with a pay-as-you-go subscription model

• Lower cost by eliminating hefty upfront capital outlays and on-going maintenance, including updates and traditional license management

• Optimize resource utilization by paying only for what you use

• Free up IT resources to focus on strategic, growth-oriented projects

• Increase security by leveraging your SaaS provider’s significant investment in security technology and expertise

SaaS loyalty providers, like Annex Cloud, allow businesses to reap the benefits of a robust loyalty program while minimizing costs, hassle and risk. With a common code base and customer input, new features can be added quickly, and all customers can benefit from them at the same time. This ensures access to the latest features and functionality, maximizing a brand’s competitive edge. Companies should consider the flexibility and scalability of such solutions, as well as the analytics capabilities and potential personalization options to make the best decision for their business and customers.

Because SaaS loyalty offers superior flexibility, with accessibility from anywhere with an internet connection, it allows brands to manage their loyalty programs from any location. SaaS solutions can also easily accommodate business growth, making it easier and faster for companies to expand their loyalty programs as needed.

Working with a loyalty vendor like Annex Cloud equips companies with the technology necessary to gain insights about customer behavior, driving customer engagement and improving customer satisfaction with personalized loyalty experiences. Built-in analytics help you make well-informed decisions about current customers and create targeted marketing campaigns.

SaaS loyalty vs. alternatives
SaaS loyalty platforms	Alternative loyalty platforms
Cloud-based	Lack of flexibility & scalability
Unlimited flexibility	Limited flexibility
Cost savings & control through subscription model	High startup costs & on-going maintenance costs
Available anywhere with internet	Limited accessibility
Drive meaningful engagement with personalization	Limited ability to collect, segment and action on data
Built-in analytics	Lack of experience
Ability to track loyalty metrics across all customers in one platform	Fewer features & more costly to add features
Seamless omnichannel experience	Difficult to integrate into martech stack
Improved security	Increased risk
Instant access to new features & functionality	New functionality requires custom development

Internal SaaS benefits

SaaS loyalty solutions provide relief to IT and Marketing teams by allowing them to deploy loyalty programs quickly and easily with minimal technical resources required. By harnessing the power of technology, organizations can drive deeper customer connections and create more meaningful interactions.

Marketing

SaaS loyalty enables organizations to streamline their customer engagement process and automate processes like customer segmentation, targeted messaging and omnichannel reward delivery. This helps marketers reach the right customers with the right message at the right time, while also making their jobs easier.

SaaS loyalty solutions often come with built-in analytics and data-driven features, which can provide marketing teams gain better insights into customer behavior and help them create more targeted campaigns, while giving them more independence from the IT team. And all these features and functionality are readily available for use.

IT

These solutions also provide IT teams with the ability to scale and modify the loyalty program as needed, without having to worry about the technical labor and cost drains normally associated with designing, deploying and maintaining loyalty platforms. SaaS loyalty solutions often come with dedicated customer service and support teams, which can help IT teams quickly troubleshoot any issues or problems that arise.

SaaS loyalty solutions provide IT and Marketing teams with a reliable and cost-effective way to deploy loyalty programs, gain insights about customer behavior, and create targeted campaigns. This can provide a major relief for IT and Marketing teams, freeing up their resources to focus on growth-oriented initiatives.

In addition to SaaS versus non-SaaS platforms, there are other key factors you should consider when evaluating loyalty vendors. Get the complete guide, so you can make an informed decision.

Experience scalable, configurable and secure loyalty with Annex Cloud

Annex Cloud has years of loyalty experience, and we know exactly how to help enterprises make the most of their loyalty programs. Our intuitive dashboard is easy to use, and it offers a range of features that can be easily configured to fit your brand. Businesses can easily track customer behavior, reward loyal customers and create targeted campaigns. And our extensive integrations make your loyalty program the heart of your tech stack, enhancing every customer touchpoint.

Annex Cloud’s distributed deployment allows for the program to be deployed in any country, making it easier for IT security teams to stay compliant with data hosting and privacy laws. And our API frameworks make it easy to customize the loyalty program to fit their brand, outcomes and optimized interaction behaviors.

Now’s the time to build a modern loyalty program built on a trusted, proven SaaS platform. One that makes it easy to recognize, reward and delight your customers in real time.

Curious how to deliver unique, memorable experiences your members can’t find anywhere else? Talk to one of our experts to see if Annex Cloud’s SaaS loyalty solution is right for your business.