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Loyalty Management Market
"Smart Strategies, Giving Speed to your Growth Trajectory"
Industries
"Smart Strategies, Giving Speed to your Growth Trajectory"
Region : Global | Latest Update: Sep, 2019 | Published Date: Aug, 2019 | Report ID: FBI101166| Status : Published
Global Loyalty Management Market valued at US$ 2,133.2 Mn in 2018 and is projected to reach US$ 7,126.8 Mn by the end of 2026, exhibiting a CAGR of 16.84% during the forecast period (2019 – 2026)
Owing to the competitive and rapidly evolving businesses environment, organizations need to take significant steps to maintain healthy relationships with their customers to strengthen their position in the market. Customer loyalty is a top priority of the companies to meet organizational and economical goals. Loyalty management programs are the most typical way to establish a permanent connection with clients. Loyalty can be defined as a new business philosophy, and a strategy, which enables identifying new customers, retaining the confidence of customers, personnel, and partners.
The expectations of customers, customer satisfaction, and customer engagement are closely related. When service providers give importance to customer service by responding to customer requirements, then making them happy and maintaining satisfaction would result in clients being committed to buy the company's products and services. Loyalty management can be viewed as a strategic goal for managers to enhance organizational performance. Indeed, investing in loyal clients would benefit the company in several ways, such as increasing efficiency and company profit.
The major factors which would drive the global market are growing usage of smartphones, increasing adoption of card loyalty systems, significant investments of organizations on loyalty management programs, and mandatory government rules and regulation on customer services. Also, the online reward management solutions are expected to drive the global loyalty management market, followed by the enhancements in big data analytics machine learning, and Artificial intelligence.
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An urgent need to retain customers to increase the adoption of loyalty solutions
Due to the increasing competition, organizations need to implement customer loyalty management solutions to retain existing customers and acquire new customers. Customer loyalty management programs help organizations to offer enhanced customer experience and improve business performance. Customer satisfaction, combined with various personalized services are the key factors to show the customer that they are highly appreciated by the brand. This would eventually cultivate customer loyalty and connectivity towards the brand. Through short term discounts or reduced shipping charges, response rates could be encouraged. Hence, it is essential to deploy loyalty management models.
Rising technological advancements and mobile services to propel the global market
Emerging trends in technologies such as big data analytics, artificial intelligence, and machine learning would positively impact the market. Big data analytics integrated with AI systems enhance the steps in analyzing and understanding customer requirements. Big data analytics also helps in comprehensive data management, whereas various machine learning algorithms are developed to understand customer’s requirement. Artificial Intelligence helps in replicating a human-like communication environment. Deployment of these technologies enables the organization to centrally track the database of the customers, analyze their behavior and preferences, automate workflow, enforce data privacy, and serve efficient loyalty management services.
As the online and physical services merged, it has started providing seamless integration of services to the customers. The customers get continuous updates regarding real-time and time-limited offers about the product through their mobile applications or social media. Mobile-based services would trigger loyalty management market growth.
Customer retention segment is anticipated to hold the largest market share in the global loyalty management market
Customer retention refers to the organization's efforts to satisfy the customer requirement so that the customer doesn’t switch to other brand or services. Loyal customer spends more than others; they share positive experiences about the brand with their family and friends, and they also act as a point of reference for the brand which helps the brand to strengthen its market position. Word-of-mouth marketing is way beneficial than advertising on social media and other means.
It is a fact that it costs more to satisfy a new customer than retaining an existing customer. Indeed, customer retention is an effective way of increasing an organization’s revenue. Customer retention leads to the sustainable growth of the organization. Loyalty programs keep the customers engaged and informed about the loyalty services of the brand and brand benefits. This helps the customer create a strong connection with the brand.
Followed by customer retention, loyal customer segment would ensure to gain a significant share. Customer retention and loyalty are closely related. A loyal customer is a key person who would tell the organization about the flaws in the service and how it would be made better.
The growing need for automated solutions to inflate the demand for cloud-based loyalty management solutions
There are various automated software tools which are used for marketing purposes, such as Gmail marketing, video conferencing, and others. Updating the customers about loyalty services through email, messages, or telephonic conversation are, however, conventional ways. Not every single customer would be updated by implementing either of these common ways.
A cloud-based loyalty management solution could overcome this drawback. Today, many organizations maintain a database of their customers. Due to the evolving technologies like big data analytics, machine learning, and artificial intelligence, organizations are tracking this customer data to help conclude sensible market insights.
The cloud-based solution would provide an instant solution to the real-time queries of the customer. Cloud-based loyalty management service gives loyalty marketers the ability to communicate with customers and deliver system-generated messages to update the customers regarding various offers and services and also provide multichannel support.
The customer data is analyzed on the cloud and stored in the master marketing database of the organization, which enables the organization to build a comprehensive view of the customers. Cloud-based software could help the organization to keep a track on the real-time updates regarding the retention rate, customer queries, and response rates.
Due to the adoption of cloud-based software solutions, SME’s would hold the highest market share in the forecast period
The organization size segment is classified into SME’s and large enterprises. Owing to the adoption of cloud-based solutions, the SME’s segment is augmented to grow at a remarkable CAGR during the forecast period. SME’s are the main drivers of the economic growth and employment generation. Through business-to-business loyalty reward programs, SME’s would increase customer acquisition and retention.
Large enterprises tend to witness high purchase frequency and repeat purchase rates from the customers owing to diverse products and multiple distribution channels. This drives the need for loyalty management; a more significant customer database would lead to a mass number of loyalty program participants, which will also bring potential publicity to the brand and strengthen its place in the market.
The retail segment is projected to exhibit notably high CAGR during the forecast period, followed by the BFSI segment
The retail sector is projected to dominate the industry vertical segment in the forecast period. Managers in the retail industry are mainly focused on customer retention, generate repeat orders, and measure the profitability of the customers; these factors drive the loyalty management need in the retail sector.
The online retailing is a new market trend which would slowly replace the traditional channels of retailing. Loyalty programs enclosed with this channel would make it appealing and encouraging for the customers to buy products from these channels rather than physically visiting a retail store. This creates enormous opportunities for the loyalty management service providers to deploy loyalty management solutions in the sector.
Customer loyalty and profitable relationships are the ultimate goals of the banking industry. BFSI sector is analyzed to hold the second-largest position in the market, by industry vertical.
In the banking sector, the introduction of credit cards, debit cards, and reward points have boosted the loyalty management market. Enhanced profitability, sustainable growth, and descent cost efficiency are the factors influencing the development of loyalty management programs in the sector.
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Increasing services of online reward programs and sophisticated loyalty programs across North America would contribute to market growth of the Loyalty Management solutions in the region
North America generated a revenue of US$ 778.8Mn in 2018 and is anticipated to emerge dominant in the global loyalty management market during the forecast period, due to adequate technology infrastructure, presence of several technologically developed organizations, and active loyalty programs in the region.
Leading loyalty management solution providers in the region are turning towards providing unique loyalty online reward programs across organizations. Major players in the region are adopting loyalty management solutions to achieve the best customer experience and drive profitability.
The U.S and Canada are forecasted to elevate the North America market. In the U.S., independent store owners have started implementing loyalty management programs to compete with large chains and collect a strong customer database.
Moreover, Asia Pacific generated a revenue of US$ 462.3Mn in 2018 and is expected to witness growth in the investments of the large enterprises for adopting the technologically enhanced loyalty management solutions. Increasing usage of mobile technologies and more focus on customer-centric relationships add value to the market.
Due to the fast development of the e-commerce industry, increasing cardholders ' population and unlimited use of internet services, Asia pacific would drive the loyalty management market growth. Particularly, in Asia-Pacific nations, loyalty programs have been observed to gain tremendous momentum.
PAYBACK is India’s largest union loyalty program, with over million members, several partners, and various outlets. Singapore has successfully executed three largest loyalty programs, which include Plus!, WorldCard and SAFRA Card.
Among the key players Comarch, IBM AND Oracle are expected to dominate the global loyalty management market
Comarch has been actively working in providing loyalty management solutions. Comarch has launched its very own Comarch loyalty management cloud offering a wide variety of features to build efficient marketing strategies.
IBM has developed a Smarter loyalty solution for the IBM commerce sector, which helps organizations to manage their loyalty programs in a real-time and efficient way. They are continuously working on innovative approaches to loyalty management solutions.
Whereas Oracle’s Siebel loyalty manager enables the organizations to execute loyalty programs and provides market analytics insights.
North America Loyalty Management Market, 2018
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A growing trend observed in the penetration of the Loyalty Management solutions across the industries.
The report provides quantitative and qualitative insights on the global loyalty management market and a complete analysis of market size & growth rate for all likely segments of the market. The market is segmented by type, deployment, organization size, end-user, and geography. By type, the market is divided into customer retention, customer loyalty, and channel loyalty. Based on the deployment, the market is, categorized into on-premise and cloud. By Organization Size, the market is classified into SMEs and large enterprises. By end-user, the market is bifurcated into Banking, Financial Services, and Insurance (BFSI), IT and Telecommunication, Retail, Travel and Hospitality, Manufacturing, Media and Entertainment, Hospitality, and others. Geographically, the market has been analyzed across five major regions, which are North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The regions are further categorized into countries.
Along with this, the report provides elaborative analysis of the market dynamics and competitive landscape. Various key insights presented in the report are the price trend analysis, recent industry developments such as mergers & acquisitions, the regulatory scenario in crucial countries, macro, and microeconomic factors, SWOT analysis, and key industry trends, competitive landscape and company profiles.
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