Report:
The Forrester Wave™: Loyalty Technology Solutions, Q1 2023
How does Forrester define the Loyalty Technology Solutions market in 2023?
Loyalty technology solutions help B2C brands engage and retain consumers through profitable loyalty programs. With 53% of B2C marketing decision-makers planning to increase loyalty technology spend in 2023, brands are focusing on reducing technology ownership costs, improving customer lifetime value (CLV), and increasing incremental revenue. Economic uncertainty has renewed focus on loyalty program profitability, driving vendors to offer flexible pricing models, modular platform configurations, and expanded partnerships for better analytics and more agile programs.
Key Facts for The Forrester Wave™: Loyalty Technology Solutions, Q1 2023 in 2023
- Publication Date: 13-Mar-2023
- Document ID: RES178447
- Summary: In our 28-criterion evaluation of loyalty technology solution providers, we identified the 12 most significant ones — Annex Cloud, Bond Brand Loyalty, Capillary Technologies, Comarch, Epsilon, Kobie, Mastercard, Merkle, Oracle, Punchh, Salesforce, and Tenerity — 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, Cole Walsh, Emily Collins, Caroline Provost, Christine Turley
How did the Loyalty Technology Solutions market evolve in 2023?
- 53% of B2C marketing decision-makers plan to increase their spend on loyalty technology in 2023
- Economic uncertainty has renewed marketers' focus on the profitability of loyalty strategies
- Brands are concentrating on reducing technology cost of ownership, improving customer lifetime value (CLV), and increasing incremental revenue
- Loyalty technology solution vendors are adapting with flexible pricing models, modular platform configurations, and expanded partnerships
- Overall CX quality declined in the US in 2022, requiring brands to rationalize their martech ecosystem
- 50% of reference customers have used their loyalty technology solution provider for a minimum of four years
- 30% of reference customers have relationships lasting eight or more years with their loyalty technology provider
- Brands increasingly seek modular loyalty platforms to minimize overlap with their marketing technology ecosystem
What product features are required to be included in this year's evaluation?
- Substantial loyalty technology product revenue - Each vendor has at least $35 million in loyalty technology product revenue
- Strong support for multiple industries - These vendors natively provide all core functions of a loyalty technology platform and support buyers across a diverse range of industries including retail, entertainment and leisure, financial services, and telecommunications
- A solution with modular offerings - These vendors natively provide all core functions of a loyalty technology platform and offer several capabilities as standalone modules that can be purchased on their own (e.g., promotions and offer management, loyalty program management, measurement and analytics)
- A broad customer base - The vendors have an existing customer base of enterprise global clients and a focus on more than one region, with current evidence of mindshare and adoption among Forrester clients
What are the common features of top products in the Loyalty Technology Solutions space?
No common features specified.
Scope Exclusions
- Vendors with less than $35 million in loyalty technology product revenue
- Single-industry focused solutions without broad multi-industry support
- Solutions without modular/standalone capability offerings
- Vendors without enterprise global client base or multi-region focus
- Vendors without evidence of mindshare and adoption among Forrester clients
Inclusion Criteria
Vendors must, among other requirements:
- Substantial loyalty technology product revenue (at least $35 million)
- Strong support for multiple industries with native core functions
- Solution with modular offerings that can be purchased standalone
- Broad customer base of enterprise global clients with focus on multiple regions
Offering Strengths — Relative Weighting
- Member data management — 15%
- Loyalty program management — 20%
- Loyalty marketing — 15%
- Program optimization — 15%
- Measurement — 15%
- Marketer user experience — 10%
- Global and local support — 10%
Strategy Strength — Relative Weighting
- Product vision — 20%
- Planned enhancements — 20%
- Performance — 10%
- Supporting products and services — 15%
- Partner ecosystem — 10%
- Commercial model — 15%
- Community engagement — 10%
FAQs
Q: What does this research cover?
A: This research provides a comprehensive evaluation of 12 leading loyalty technology solution providers using 28 criteria across current offering, strategy, and market presence. It analyzes vendor capabilities in member data management, loyalty program management, loyalty marketing, program optimization, measurement, and other key areas to help B2C marketers select the right loyalty technology partner.
Q: Who should use this research?
A: B2C marketing professionals should use this research to evaluate and select loyalty technology solution providers that best fit their needs. It is particularly valuable for marketers seeking to invest in or upgrade their loyalty programs, understand vendor strengths and weaknesses, compare platform capabilities, and align technology choices with strategic business objectives around customer engagement, retention, and profitability.
Q: What are the mandatory features of vendors included in this market?
A: All vendors included must natively provide core loyalty technology platform functions including member data management, loyalty program management (tiers, currencies, rewards, referrals), loyalty marketing capabilities, program optimization tools, measurement and analytics, and support for multiple industries. They must offer modular capabilities that can be purchased standalone and demonstrate proven success with enterprise global clients across multiple regions.
Q: What are some reasons for not being included in this report?
A:
- Insufficient loyalty technology product revenue (below $35 million threshold)
- Narrow industry focus without demonstrated multi-industry capability
- Lack of modular platform architecture and standalone capability offerings
- Limited customer base without enterprise global clients
- Single-region focus without multi-geography support
- Insufficient mindshare or adoption among Forrester clients
- Inability to natively provide all core loyalty platform functions
Q: What should buyers consider when evaluating products in this market?
A:
- Look for providers that modularize their offerings to minimize overlap with existing martech ecosystem
- Seek vendors that excel in loyalty program management with flexible functionality for tiers, currencies, rewards, referrals, and fraud management
- Evaluate vendors with robust partner ecosystems offering seamless integrations with packaged and full-featured capabilities
- Select vendors that demonstrate a clear and future-fit vision with aligned roadmap and strong track record of delivering enhancements
- Consider vendors offering agile program management and regularly adding new rewards options
- Prioritize vendors using AI/ML to predict, identify, and take automated action on potential fraud
- Assess transparency around how capabilities are delivered and priced (platform vs. add-on)
- Evaluate vendors with minimum 4+ year client relationships indicating long-term viability
Q: How has the Loyalty Technology Solutions market evolved in 2023?
A:
- 53% of B2C marketing decision-makers plan to increase loyalty technology spend in 2023
- Economic uncertainty and marketing budget scrutiny driving focus on loyalty program profitability
- Brands concentrating on reducing technology cost of ownership
- Emphasis on improving customer lifetime value (CLV) and increasing incremental revenue
- Overall CX quality declined in the US in 2022
- Vendors adapting with flexible pricing models and modular platform configurations
- Expanded partnerships enabling better analytics and more agile programs
- Brands seeking to minimize martech ecosystem overlap and reduce redundant capabilities
- Growing importance of AI/ML for fraud detection and program optimization
- Increasing focus on privacy capabilities and zero-party data collection
Q: What differentiates Strength of Offering vs. Strength of Strategy?
A: Current Offering evaluates vendors' existing platform capabilities including data management, program structure, marketing execution, optimization tools, measurement capabilities, user experience, and support infrastructure. Strategy assesses forward-looking aspects including product vision, planned roadmap enhancements, company performance metrics, supporting services, partner ecosystem breadth, pricing models, and customer community engagement.
Reference
- Forrester, The Forrester Wave™: Loyalty Technology Solutions, Q1 2023, 13-Mar-2023, ID RES178447
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