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In Customer Service Last updated: November 21, 2022
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Do you want to maximize the profits you get from your loyal customers? Looking for a customer retention software that’d be best for your business?

FACT: 82% of companies worldwide agree that customer retention is cheaper than acquisition.

In this article, we will explain to you what customer loyalty is, why it is necessary for your business, and mention some of the best customer loyalty software you can use to maximize your profits.

What Is Customer Loyalty? 

Customer loyalty is the rate at which a customer is likely to make repeat purchases from a company or brand. 

It’s the byproduct of customers’ overall satisfaction from using your products or services.

When customers are loyal to your company, they prefer purchasing your product regularly. 

Such customers don’t get lured by other brands’ offers or products. 

Isn’t it amazing to see people being loyal to an artificial entity?

But, customers may not be exclusively loyal to your brand! They might make repeat purchases from multiple brands in the same category.

That said, here’re some key characteristics which define a loyal customer:

  • Not actively searching for your competitors
  • Trust you and are willing to pass on the message in their network
  • Not open to offers and sales pitches from competitors
  • Stay by your side even if you make a mistake
  • Actively providing feedback on how you can improve your product or service
  • Keep purchasing from you as long as they need the product

Customer loyalty will likely fail if these characteristics don’t come into play.

Customer loyalty and customer retention go hand-in-hand. Retention is a metric or KPI that tracks customer engagement and the resulting sales from these loyal customers.

Here’s the thing, do you want to lose your existing customers? Of course not; after all, you’ve put in the effort to get them.

Customer loyalty and retention strategies are developed to provide and extract more value from your existing customer base.

What are some of the best customer loyalty programs?

1. Starbucks: Rewards customers with free coffee or food depending on the amount spent
2. Virgin Atlantic: Earn points with every flight ticket you purchase and spend them on upgrades, bookings, and much more
3. Amazon: Buy Prime membership to get exclusive deals, 1-day shipping, and much more

Why Is It Necessary For Business?

Did you know that new customer acquisition costs have increased by 50% in the past 5 years?

And also, existing customers are 50% more likely to try your new product and spend 31% more than new customers.

Even though your loyal customers comprise 20% of your audience, they generate up to 80% of your revenue.

With these mind-boggling stats, it’s crystal clear why customer loyalty is necessary for your business. To add on, here are some of the major customer loyalty benefits.

Increased Share-of-Market

Share-of-market refers to the portion of the market a brand acquires compared to its competitors.

This market share defines how much money a customer spends on a brand compared to other brands in the same category. 

Evidently, customers spend more time and money on the brand they are loyal to. Thus, allowing the brand to build a strong market presence and dominate its competitors.

Create Brand Awareness

Loyal customers help you spread brand awareness in two ways – Word-of-mouth marketing & User Generated Content (UGC).

Customers trust their friends and family. That’s why word-of-mouth marketing is the most valuable source of marketing. 

It’s like referral traffic – a loyal customer of your brand tells their family about your brand, they buy your product and refer other people – and the chain goes on.

The other is User Generated Content (UGC).

For example, Starbucks offers to write a message or your name on its coffee cup when you buy a coffee from them.

Consuming coffee from a premium coffee brand is a delight for many!

Customers willingly share their photos on social media, allowing the brand to promote itself without creating any content of its own.

Likewise, these loyal customers will share any new product or service launched by Starbucks. The below image shows that #starbucksusa has 130,251 user-generated posts. 

starbucks ugc

That’s precisely the impact UGC can bring into play.

Increased Trust

Customer loyalty is built from trust. When customers frequently return to your company, the value they’re getting from your brand outweighs the benefits provided by your competitors.

And since we know, the amount of acquiring new customers is relatively higher than retaining existing customers. The idea of engaging present customers should excite marketers and customer success managers.

But how to do it? How can you preserve customer loyalty?

The answer lies with customer loyalty programs. According to reports, 77% of customers are likely to stay with a brand that has a loyalty program.

Why Do You Need A Customer Loyalty Software?

Investing in software to set up loyalty programs is essential to make your business scalable. When you’re just starting things off, you can send out personalized messages and promote new products manually.

But what will you do to scale it?

Analyzing data of hundreds of customers manually would take ages, let alone sending them personalized offers.

You can set up loyalty programs with customer loyalty software in a few minutes. With the help of AI, the tool will automatically analyze data, segment your audience, and send personalized emails automatically.

A customer loyalty software would save you time and will be cost-effective in the long run.

For your ease, we’ve curated a list of the best customer loyalty program software. Let’s dive in to explore more about them and find the best fit for your brand.

Square Loyalty

Square Loyalty is an easy-to-set-up customer loyalty program software. 

square loyalty

It allows your business to enroll and reward customers directly from your POS (Point of Sale) without additional hardware or software.

The software enriches your repeat customer visit by up to 40%.


  • Personalization: Quickly view your customers’ points and rewards in one dashboard and provide a personalized experience with loyalty programs
  • Tracking and Analytics: Track essential loyalty data to compare average spending and visits from customers under one dashboard
  • Notification and Alerts: Send automated text messages to customers whenever they earn points or rewards
  • Quick Enrollment: Enroll and reward your customers from your POS or website checkout page within seconds

Square Loyalty monthly costs start at $45. It gets automatically adjusted based on each location’s total loyalty visits per month. So, you only pay more when you earn more.


LoopyLoyalty is the one-stop customer loyalty solution for small businesses. Its customer-friendly software allows you to provide your customer with a 100% mobile experience.


The platform cherishes digitization and offers digital loyalty cards, stamps, and easy-to-understand loyalty programs for your customers’ convenience.


  • Rich Customer Insights: Track and analyze the ROI of your loyalty programs with the help of uncensored and real-time data
  • Online Stamper Tool: Use the LoopyLoyalty’s Digital Stamper app to issue stamps and rewards remotely across the globe in a single scan
  • Customizable Stamp Cards: Create beautiful digital stamp cards in minutes with no design or coding experience
  • Location-Based Alerts: Automatically trigger notifications or messages when your customers are near you (compatible with iPhone/Apple Wallet)

With LoopyLoyalty, you get unlimited of everything – customers, push messages, stamps, rewards, and transactions. It’s easy to set up and offers a free trial of 15 days, with no-risk cancellation.


Capillary is a cloud customer loyalty program software for enterprises. It helps businesses build a community of loyal customers by offering real-time, omnichannel, and personalized rewards.


Capillary’s loyalty program is trusted by the likes of TATA, Puma, Redtag, and many more.


  • Gamification: Keep your customers hooked by gamifying their loyalty program experience with leaderboards, rank-based rewards, and referral bonuses
  • Personalization: Improve engagements by targeting customers with personalized rewards at crucial touchpoints in buyers’ journey
  • Omnichannel: Easily integrate all your consumer channels to enhance your customer loyalty experience; allow your customer to earn and redeem rewards remotely
  • Real-Time Tracking: Measure vital KPIs and track key metrics of your campaigns in real-time with a live dashboard; easily manage single brand and Multi-brand campaigns simultaneously

With Capillary, you can even build your online community of loyal customers by rewarding them for social interactions with your brand– Likes, reviews, and shares.


Since we are talking about loyalty, is the world’s most trusted loyalty software, with over 125 million users.

Its intuitive design and customer-centric features allow businesses to increase their repeat customer rate and build a true brand community!


  • Intuitive Design: Create a user-friendly reward panel with customizable fonts, colors, and design to make it easy to use for customers
  • Easy-to-Understand Dashboard: Build and manage your loyalty program with Smile’s all-in-one admin dashboard
  • Advanced Integration: Connect reward program with other eCommerce tools such as Mailchimp, Gorgias, Okendo, and more
  • VIP Program: Segment your top customers with Smile’s VIP program to provide them with exclusive perks and rewards

Over 100,000 small enterprises use to reward their customers. You should, too.


Did you know 1 in 6 Americans use Fivestars? Fivestars is a powerful marketing platform that helps businesses retain customers 10X more effectively than traditional marketing.



  • Tagging: Personalize CX by tagging customers based on gender, age, spending habits, and anything that helps in personalization
  • Secured Database: Prevent fraud by logging every activity and transaction made by your customers into a secured database with Fivestar’s TCPA compliant program
  • Tracking and Analytics: Track and measure everything from the performance of your campaign to rewards redeemed under one dashboard
  • Easy-to-Use: Fivestar’s Connect software allows you to engage with your customers directly at POS or with Fivestar’s provided tablet

Over 12,000 businesses trust Fivestars customer loyalty software. The best part is that you can join Fivestar for absolutely $0/month and continue with a flexible monthly contract system thereafter.

Open Loyalty

Open Loyalty is a 100% customizable headless customer loyalty program with an API-first approach.

open loyalty

It provides a flexible and secure framework for creating personalized loyalty solutions from scratch.


  • Personalization: Flexible building blocks and API-first approach to creating a fully personalized loyalty program.
  • Scalability: Micro-service ready architecture and cloud infrastructure to easily scale your loyalty program as you grow.
  • Easy Integration: Robust API framework and webhooks to integrate the software with your existing tools.
  • Quick Launch: Choose from pre-built loyalty blocks and use components from its loyalty accelerator tool to craft your loyalty program quickly and hassle-free.

Open Loyalty’s headless loyalty software is best suited for enterprises with a complex multiple touchpoints infrastructure. It helps to carry out loyalty programs on a massive scale in minimal time.

Annex Cloud

Founded in 2010 – Annex Cloud is the world’s leading provider of enterprise-based customer loyalty and technology services.

annex cloud

It combines best-in-class loyalty management with powerful and effective user engagement tools to offer an engaging customer experience.


  • Dynamic Insights: Track onsite customer activities in real-time and gain in-depth insights from your loyalty campaigns to understand your customers better
  • Progressive Web Apps: Transform your website with PWA and make it look like an app that can be viewed offline
  • Gamification: Hook customers to your loyalty program with exciting game elements like a leaderboard, badges, and ranks
  • Native SDKs: Easily import loyalty program reward information and other data to your app with native iOS & Android SDKs

With over 11+ years of industry leadership, top B2B and B2C companies trust Annexe Cloud’s loyalty software.


Antavo is an API-centric SaaS loyalty technology provider that builds enterprise-focused loyalty programs to enrich the overall customer experience.


This software is the leading customer loyalty technology for fashion and retail businesses.


  • Omnichannel Solution: Extensive outreach with pre-integrated channels to engage with the customer anywhere, whether online/offline
  • Hyper-Personalized Incentives: Antavo’s offer management module assists in generating engaging reward ideas and present each customer segment with unique offers
  • No-Code Loyalty Engine: Customize and manage your customer loyalty campaigns and workflows without entering a single line of code
  • Social Engagement: Bond with customers outside the buying cycle by rewarding them for social interactions such as likes, shares, reviews, and more

Antavo’s no-code customer loyalty technology has delivered a 52% increase in customer retention rates for its clientele, including KFC, United Colors of Benetton, Pepsico, and many more.


LoyaltyLion is an award-winning loyalty and engagement platform designed for eCommerce stores to grow exponentially.


Best suited for eCommerce platforms, LoyaltyLion is trusted by businesses across the globe for its customer loyalty and retention technology.


  • Highly Customizable: Build a fully customizable loyalty program with an intuitive CSS theme editor
  • Advanced Integrations: Seamlessly integrate LoyaltyLion with your eCommerce platform and third-party tools such as ESPs, subscription partners, and help desks
  • Foster Referrals: Encourage customer referrals via LoyaltyLion’s standalone referral widget or reward referrals made via socials, emails, or links
  • Notifications and Alerts: Create and trigger email alerts and onsite notifications in real-time to keep your customers hooked

LoyaltyLion offers monthly and annual subscription plans. The pricing is based on monthly order numbers, so you don’t empty your pocket paying for disloyal customers.


LoyaltyGator is a Canada-based marketing agency that provides affordable customer loyalty program software to enterprises.


It’s one of the most flexible and easy-to-use loyalty software in the industry.


  • Data Ownership and Security: High-end secure servers to protect your data; you own 100% of your data anytime
  • Marketing Templates: Promote your loyalty program using Loyaltygator’s free countertop marketing templates
  • Customer Satisfaction Meter: Easily track customer satisfaction in real-time and get immediate email notifications about poor reviews and ratings
  • Comprehensive Reporting: Get in-depth insights into your customer loyalty programs and track online customer activities to make data-driven decisions

LoyaltyGator allows you to perform unlimited transactions without charging any transaction fees. It also comes with a free 30 days trial period, so you can figure out what’s working for you.

Why do customer loyalty programs fail?

1. Rewards you give are either unappealing or unattainable
2. You’re not using customer data and personalizing rewards correctly
3. Not using an omnichannel approach to launch your customer loyalty program
4. Lack of knowledge among customers about what your loyalty program offers
5. Poor user-interface

Wrapping Up

Customer loyalty software has been a game-changer for brands. It has helped brands generate millions in sales just by nurturing their existing customer relationships.

In this article, we have explained why customer loyalty is necessary for your business and mentioned the top loyalty software with their best-in-class features.

Here’s a quick recap for you to figure out which customer loyalty software is best suited for your business.

E-commerce StoresLoyalty Lion
Fashion & Retail StoresAntavo
Large EnterprisesAnnex Cloud, Open Loyalty, Capillary
Customers FavoriteFivestars
Small & Medium EnterprisesLoyalty Gator, Smile, Loopy Loyalty, Square Loyalty

Choose the one you think might be the best fit for you and your business. Whichever software you choose, do it fast. If you don’t take advantage of your loyal customer, you are already missing out on a big chunk of profit.

  • Tanish Chowdhary
    Tanish is a digital marketing geek and a super creative writer. He has been researching, analyzing, and writing about digital marketing for 4 years. Before stepping in to the world of Digital Marketing, he was an engineer. In his free time,… read more
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