Is Your Loyalty Agency Overcharging You?

Loyalty management agencies have long been the go-to for brands looking to build and scale loyalty programs. But are they charging more than what’s necessary? Many businesses unknowingly pay for outdated models with high overhead costs, complex integrations, and rigid structures that no longer align with modern customer engagement needs.

With the rise of SaaS loyalty management platforms, brands now have a cost-effective, scalable, and more flexible alternative. These platforms streamline loyalty program management, eliminating agency markups while offering end-to-end loyalty management at a fraction of the cost. If you’re questioning whether your loyalty marketing agency is worth the investment, it’s time to evaluate smarter solutions that drive better results.

Why SaaS is Disrupting the Traditional Loyalty Agency Model

In the USA and Europe, over the last couple of decades, legacy agencies and consultancies have dominated the loyalty marketing industry. These firms are good at designing loyalty programs and thinking through a problem statement but in this age of AI, they severely lack the technology know-how and depend on 3rd party vendors for implementing a program. And this is where the problem starts.

Massive Technological Costs of Loyalty Management Agencies – Are You Overpaying?

Let’s look at some real-world examples:

1. Early in September, a conglomerate in the USA wanted to go live with multiple employee offers, 25+ promotions (including cashback deals), and a game – all in one day. They went to their agency which quoted $250K as a change request on developing and delivering these promotions by coding on the platform. And, it’d take 3 months to make these changes!
2. One of the top retailers in the USA wanted to kick-start their loyalty program. On an agency model, it took them more than 30 months and cost them upwards of 6 million USD to go live. The time and amount are enough to bootstrap an entire loyalty technology company! Partnering with existing SaaS-based loyalty platform vendors would have enabled this fuel retailer to go live in a matter of 6 months and at a fraction of the cost!
3. One of the largest hotels globally wanted to add a new Tier to their loyalty program. This can be done without any cost on a SaaS platform but the agency they were working with charged the hotel 300K USD along with a 4-week timeline to implement! We’re in an age when technology can help brands do this instantly and platforms like Capillary are built in a way that all of this flexibility is built-in the product.

Why SaaS Loyalty Platforms Offer a More Cost-Effective Alternative

The last decade has been the decade of SaaS (software as a service) for a reason. As a brand marketer, your role is to ensure your customers receive the best experience while shopping with you and that they keep coming back to you. Along with this, the company should meet its business objective. For this, it is essential for brand marketers and loyalty marketers to spend more and more time with their end customers, designing campaigns, creating new trends, and ensuring customers get what they want. And technology should be an enabler in this.

But what ends up happening while deploying and running loyalty programs is that teams responsible for handling loyalty end up wasting too much time on understanding technology and ensuring that the program functions!

This is where the beauty of SaaS comes in: At Capillary Technologies, we’ve worked with more than 250 enterprise brands across the globe including a range of verticals (Shell, Tata, Domino’s, Al-Futtaim Group, Puma, NASCAR, and many more). In this process, we’ve taken intelligence from all these programs and it is already baked into our AI-powered loyalty technology platform which has a holistic product roadmap. With Loyalty+, Engage+, Rewards+, and Insights+ – the product suite that is powered by a robust consumer data platform, brand marketers get the perfect SaaS solution through which they run agile and flexible loyalty programs.

Capillary’s Loyalty Management Platform: What Sets It Apart?

Along with Brierley’s consultancy services, the Capillary platform is perfectly suited for running end-to-end loyalty programs at scale that deliver real ROI. Some of the key areas where Capillary truly distinguishes are:

• Create custom, targeted, and region-specific offers and promotions (while allowing each region to control point liability)
• A truly multi-tenant solution (Features built with configuration to rollout across tenants vs update and test for each client. Upgrades are easy, automatic, and seamless)
• Go live quickly and easily with Capillary’s extensive technology integrations
• AI-powered personalization (AI algorithms help tailor offers and rewards to individual customers, increasing redemption rates and driving customer loyalty)
• Highly secured and data-privacy-compliant platform
• Global presence with expert consultancy (with offices and physical presence in different regions, Capillary truly understands the regional nuances)

Final Thoughts: Should You Rethink Your Loyalty Agency in 2025?

The loyalty landscape has evolved, yet many brands are still tied to expensive loyalty marketing agencies that may not justify their cost. An agency-led model in loyalty management is good for consultancy but when it comes to technology, they will have to charge through the nose because everything has to be built from scratch, again and again. Their reliance on outdated technology and manual processes often leads to higher loyalty program costs than necessary.

As we stride through 2025, switching to a SaaS-based loyalty management platform is an obvious choice for brands. These platforms offer a ready-to-use, data-driven roadmap with greater flexibility and agility, enabling you to run winning customer loyalty programs without the hefty price tag. If your brand is re-evaluating its customer loyalty agency, now is the time to explore alternatives that provide better value, transparency, and long-term growth.

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Jubin Mehta is the Associate Director of Marketing at Capillary Technologies. He is a full stack marketer with 10+ years of experience as a tech journalist and B2B SaaS marketer. Also a meditation instructor, he is a proponent of non-dual philosophy. He can be reached out on Twitter @jub_in.