Ditch Traditional Approach- Opt for New Loyalty Program Pricing Model
- Posted on September 23, 2022 by Robert
- Reading time about 4 minutes
Winning customers ‘hearts and making them satisfied is one of the most important aspects of any business, which eventually helps to keep customers engaged with your brand for a long time. For this reason, many organizations are making use of Premium Loyalty Programs to reward customers with special benefits & offers for being loyal, thereby increasing their product sales and retention rate of existing customers.
The main challenge arises with the cost when it comes to building a good loyalty program! Often the traditional loyalty programs have a large upfront cost associated with the development of the program. In this blog, we will check out why you need to update your old traditional loyalty model and how the new pricing model will help you plan your budget better.
Why Do You Need an Update In Your Traditional Loyalty Model?
To know the issue in the traditional loyalty program, we need to first understand how the pricing model works. We follow this formula-
Here, a retailer pays a loyalty vendor up to 7 figures for a loyalty program they are using. This includes the platform along with additional consulting & customization costs, which may add later. The retailer is hopeful to see the result with positive ROI after 1 year or 1.5 years.
This pricing model of the program needs to be updated. Because, in situations where the loyalty vendor generates just a single customer or one million, they still get paid & make their money from the program build.
How Revenue Share Model of Novus Can Work Wonders?
Usually, the goal of effective Customer Loyalty Software is to provide the best customers for the businesses. Simply charging an upfront fee and leaving your retailer partners to manage the loyalty program alone is not the right solution. Instead, you must focus on providing enough value that program members stay engaged constantly. For that, you need ongoing program management and optimization.
This is not the case with the traditional loyalty program model. With the new model of revenue share Premium loyalty programs, things have changed tremendously for the better in the loyalty space.
Ways that show the revenue share model works best for both retailers & program vendors-
– Retailers & Platform Owners Share Revenue
Consumers pay a membership fee to the retailer for access to members-only benefits through loyalty programs. In the revenue share model, the loyalty platform owner makes its money from the percentage of those program membership fees that customers pay.
This means the retailer & owner share in the revenue, taking all the risk off the retailer. When a retailer makes money, then only the platform owner makes it.
– Work with Complete Alignment
Using the revenue share model, we work for complete alignment taking into consideration all the upfront costs/risks. The retail partners are confident in investing in the program as it is made clear from the very beginning where they are truly putting their money on.
Novus works as a robust loyalty platform that helps in customizing each loyalty program for the different needs of every individual retail partner. Programs can be up and running in just a few weeks and also enable brands to quickly launch pilot programs & build with time.
– Support After Launch
From building to managing and optimizing the loyalty programs, we manage everything and let retailers shift their focus on internal resources that can help to generate revenue. With all heavy lifting tasks done through Novus, retailers are free to deploy their resources in the right spots.
After the successful launch of the program, we continually work with the brand to evolve & update with the latest updates and features making brands stay ahead of the competition.
Being a trusted Loyalty Management Software, Novus enabled small startups as well as enterprises to thrive in the competitive market with custom-loyalty solutions built at an affordable rate. We believe in the revenue share model and don’t charge anything upfront to build a loyalty program. Many retailers are not aware of how the pricing model works and end up getting charged high. With Novus, we aim to bring a new model to the loyalty space.
The main motive of your loyalty program is not just to increase signups but to get your best customers more engaged & connected. Novus offers the best Premium loyalty programs to focus on turning your engaged customers to brand advocates. Using the revenue-sharing model, we are all incentivized to optimize and scale the loyalty program to attain successful success. Book a free consultation with our experts to know how Novus can help in making your program members engaged & loyal to your retailer brands.