Report:
The Forrester Wave™: Loyalty Services, Q2 2024
How does Forrester define the Loyalty Services market in 2024?
Loyalty services providers help brands design and execute strategies and programs that generate value for both consumers and businesses. In a landscape of accelerated consumer change driven by economic, lifestyle, and social values trends, most companies haven't invested in required loyalty program evolution, leaving lackluster offerings. The best providers invest in data science, creative, and technology capabilities to support companies launching or refreshing loyalty initiatives. This evaluation assessed eight providers across 26 criteria, highlighting Leaders (Kobie), Strong Performers (Publicis Groupe, The Lacek Group, Bond Brand Loyalty, Capgemini), and Contenders (Concentrix, PwC, Material). Key differentiators include enterprisewide strategy capabilities, data science and behavioral science integration, and versatile services that enable brand agility.
Key Facts for The Forrester Wave™: Loyalty Services, Q2 2024 in 2024
- Publication Date: 02-Jun-2024
- Document ID:
- Summary: In our 26-criterion evaluation of loyalty services providers, we identified the most significant ones and researched, analyzed, and scored them. This report shows how each provider measures up and helps B2C marketing professionals select the right one for their needs.
- Authors: Mary Pilecki, Emily Collins, Cole Walsh, Caroline Provost, Christine Turley
How did the Loyalty Services market evolve in 2024?
- Brands struggle to keep up with accelerated pace of change in consumer needs driven by economic, lifestyle, and social values trends
- Most companies haven't invested in required loyalty program evolution, leaving lackluster and homogeneous offerings
- Loyalty services providers invest in data science, creative, and technology capabilities to support companies launching or refreshing loyalty offerings
- Growing customer loyalty requires deep understanding of customer behaviors, emotions, and preferences
- Generating lasting value from loyalty initiatives requires regular strategy adjustments to accommodate changing business objectives and consumer needs
- Eight providers were evaluated: Kobie, Publicis Groupe, The Lacek Group, Bond Brand Loyalty, Capgemini, Concentrix, PwC, and Material
- Evaluation uses 26 criteria grouped into current offering, strategy, and market presence
- Providers must have minimum $60 million in loyalty services revenue and broad delivery abilities to be included
What product features are required to be included in this year's evaluation?
- Services revenue of at least $60 million from loyalty services engagements for the four fiscal quarters prior to May 2023, with revenue from loyalty technology solutions not considered
- A loyalty services offering that doesn't require purchase of a loyalty technology solution
- A comprehensive suite of loyalty services demonstrated by focusing on the majority of core business scenarios and the majority of the capabilities defined in The Loyalty Services Landscape, Q3 2023
- Sufficient Forrester mindshare based on the level of interest from Forrester clients through guidance sessions, inquiries, advisories, consulting engagements, and other interactions
What are the common features of top products in the Loyalty Services space?
No common features specified.
Scope Exclusions
- Loyalty technology platform revenue (only loyalty services revenue was considered)
- Providers with less than $60 million in loyalty services revenue for the four fiscal quarters prior to May 2023
- Providers requiring purchase of a loyalty technology solution to access services
- Providers lacking comprehensive loyalty services across majority of core business scenarios
- Providers with insufficient Forrester client mindshare and interaction
Inclusion Criteria
Vendors must, among other requirements:
- Services revenue of at least $60 million from loyalty services engagements for the four fiscal quarters prior to May 2023
- Loyalty services offering that doesn't require purchase of a loyalty technology solution
- Comprehensive suite of loyalty services demonstrated by focusing on the majority of core business scenarios
- Demonstrated capabilities across the majority of capabilities defined in The Loyalty Services Landscape, Q3 2023
- Sufficient Forrester mindshare based on client guidance sessions, inquiries, advisories, consulting engagements, and other interactions
Offering Strengths — Relative Weighting
- Enterprise loyalty strategy design — 15%
- Business case development — 5%
- Organization design — 5%
- Employee engagement and alignment — 5%
- Customer experience design — 5%
- Customer engagement — 8%
- Loyalty program design — 10%
- Loyalty program management — 3%
- Customer data processing and management — 4%
- Rewards management — 3%
- Personalization strategy and services — 5%
- Campaign and offer design and execution — 4%
- Emotional loyalty measurement and optimization — 5%
- Loyalty measurement and optimization — 5%
- Data science, analytics, and insights — 9%
- Customer data privacy — 5%
- Platform-independent technology consulting — 4%
Strategy Strength — Relative Weighting
- Vision — 30%
- Innovation — 25%
- Partner ecosystem — 20%
- Pricing flexibility and transparency — 5%
- Talent strategy — 10%
- Global delivery strategy — 10%
FAQs
Q: What does this research cover?
A: This research evaluates eight loyalty services providers based on 26 criteria examining their current offerings, strategy, and market presence. It analyzes how providers help brands design and execute loyalty strategies and programs that generate value for both consumers and businesses through data science, creative capabilities, and technology expertise.
Q: Who should use this research?
A: B2C marketing professionals should use this research to select the right loyalty services provider for their needs. It helps brands looking to launch or refresh loyalty offerings by comparing providers' capabilities in enterprise loyalty strategy, customer engagement, program design, data analytics, and implementation across different verticals and maturity levels.
Q: What are the mandatory features of vendors included in this market?
A: All providers included in this evaluation must have: (1) at least $60 million in loyalty services revenue (excluding technology platform sales) for the four fiscal quarters prior to May 2023; (2) a standalone loyalty services offering that does not require purchasing a loyalty technology solution; (3) comprehensive loyalty services capabilities covering the majority of core business scenarios and capabilities defined in The Loyalty Services Landscape, Q3 2023; and (4) sufficient Forrester mindshare demonstrated through client guidance sessions, inquiries, advisories, consulting engagements, and other interactions.
Q: What are some reasons for not being included in this report?
A:
- Loyalty services revenue below $60 million threshold for the evaluation period
- Loyalty services bundled exclusively with required technology platform purchases
- Limited loyalty services scope not covering majority of core business scenarios
- Insufficient breadth of capabilities compared to those defined in The Loyalty Services Landscape, Q3 2023
- Lack of sufficient Forrester client engagement and mindshare
- Declined to participate in the evaluation process
- Only partial participation in the evaluation, not providing complete required materials by March 7, 2024 deadline
Q: What should buyers consider when evaluating products in this market?
A:
- Begin engagements with an enterprisewide loyalty strategy that drives collaboration across functions, coordinates initiatives, and aligns business goals
- Choose a services provider that can influence the entire C-suite and foster collaboration across silos to develop an overarching loyalty strategy and value exchange
- Look for providers that can measure emotional and behavioral loyalty and are proven experts in human-centered and inclusive experience design
- Ensure the provider manages insights with the right technology and can derive actionable insights from customer data
- Engage a provider that maximizes speed and agility in loyalty planning, journey development, and implementation
- Select providers that operate flexibly, adjusting their approach based on vertical, target customer, level of loyalty maturity, and martech stack
- Partner with providers that have a sharp vision for the future of loyalty and thoughtfully incorporate emerging technologies
- Prioritize providers that excel at creative differentiation to stay ahead of competition
- Verify the provider's global delivery capabilities match your geographic needs
- Assess the provider's partner ecosystem for technology, CX, and rewards partnerships
Q: How has the Loyalty Services market evolved in 2024?
A:
- Accelerated pace of change in consumer needs driven by economic, lifestyle, and social values trends
- Need to accommodate new consumer preferences and recognize generational distinctions while maintaining profitable strategies
- Sea of lackluster and homogeneous loyalty offerings due to lack of investment in loyalty program evolution
- Growing importance of data science, behavioral science, and human-centered design in loyalty initiatives
- Brands seeking to grow profitability through customer devotion while consumers maximize economic value
- Need for regular strategy adjustments to accommodate changing business objectives and consumer needs
- Increasing importance of measuring emotional and behavioral loyalty
- Rising focus on inclusive experience design across all customer touchpoints
- Emphasis on speed and agility in loyalty planning, journey development, and implementation
- Thoughtful incorporation of emerging technologies into loyalty practices
Q: What differentiates Strength of Offering vs. Strength of Strategy?
A: Strength of Current Offering (vertical axis) evaluates the provider's existing capabilities and service delivery across 17 specific loyalty service areas including strategy design, customer experience, data management, measurement, and technology consulting. It focuses on what providers can deliver today. Strength of Strategy (horizontal axis) assesses the provider's future direction and competitive positioning through 6 dimensions: vision for the loyalty market, innovation investments, partner ecosystem breadth, pricing models, talent development, and global delivery capabilities. It focuses on the provider's ability to evolve and lead in the market.
Reference
- Forrester, The Forrester Wave™: Loyalty Services, Q2 2024, 02-Jun-2024, ID
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