How Much Does a Loyalty Program Cost in 2025?

“How much should a loyalty program cost?” If you are considering running a loyalty program, this question must be on the top of your mind.

Whether it’s a traditional loyalty program or an ultra-sophisticated loyalty software for business, creating and running a channel, brand, or influencer loyalty program requires a serious financial commitment.

But what if we tell you that the cost involved in creating and running loyalty programs are worth every penny when compared with the return on investment (ROI)?

As per responses summarized in a new report, loyalty programs accounted for 31% of the total marketing budget, up from 22.8% in 2022. The report also revealed that 83% of loyalty program owners reported a positive ROI, with a strong average of 5.2x.

To put things in perspective, the loyalty program’s profit from increased sales and value is over five times greater than the total investment and maintenance costs! Let that sink in!

At LoyaltyXpert, we have created the right types of loyalty programs for a wide array of businesses for the best price. If you are pondering over the “What would be the cost of implementing a loyalty program in 2025?” question, this blog post is just for you.

Loyalty Program Software Cost vs Traditional Loyalty Program Cost

At present, many successful businesses are not just looking for ways to optimize their loyalty programs but also reduce the costs associated with running them. In such a scenario, leveraging technology and having a digital-first mindset is extremely beneficial.

Just imagine; if you choose to design and create traditional (or Excel sheet-based) loyalty programs, then it will require you to create everything from scratch. Besides, you will have to spend a lot of time and effort tracking and managing all your loyalty activities manually.

But you can cut your costs by leveraging technology and investing in high-quality loyalty software for business. The loyalty program software cost is far less than the costs incurred in running and managing traditional loyalty programs. That’s why the global loyalty market size is expected to grow at a double-digit figure.

Factors Affecting the Costs of Loyalty Programs

The price that you are going to pay for your loyalty programs is going to be determined by a wide range of factors. Several factors influence costs in different ways. Here are some of those:

1. Types of loyalty programs

Different types of loyalty programs involve different costs. The cost of creating, running, and managing a stamp-based loyalty program can start from USD 100 and the recurring maintenance costs for a customized loyalty app can go up to several thousand (even million) dollars.

Let’s take some examples of leading companies that command strong loyalty from their business partners and clients. For instance, let’s look at Lenovo’s Leap Program, which is considered one of the best B2B loyalty programs in the world. To design, create, run, and manage the loyalty program the personal computer behemoth invested in a bespoke loyalty solution. It also leveraged high-end technology and app-based loyalty programs to provide excellent brand experience and build robust engagement.

But small and medium enterprises cannot afford to invest in such programs. They, however, can invest in small and medium-scale technology to create and run their loyalty programs.

2. Technology costs

How could we not have technology costs on the second slot when we have discussed technology in the above point? This, however, doesn’t apply to businesses that don’t use any type of technology tool to design, create, and run loyalty programs.

But if a business uses any type of technology then it has to incur some types of technology costs. As discussed in the above point, Large and enterprise-sized businesses invest a lot in technology and their expenses (read investments) are quite considerable compared to their smaller counterparts.

This is where small and medium-sized businesses should look for the right technology partner to run and create loyalty programs. Many loyalty solution providers offer free trial periods, which can help in making informed buying decisions.

The setup costs of digital loyalty programs are usually low. After paying the nominal setup fee, you can start your program with just a click of a few buttons. If you are planning to run an app-based loyalty program, then you will need to invest in the right software that can work for your business. That’s why you must consider the loyalty program software cost.

3. Implementation costs

After investing in the right loyalty software for business, you also need to implement the loyalty program and the costs associated with that known as the implementation cost. The cost of implementing a loyalty program increases with its size, scope, and complexity.

It is critical to consider implementation costs as they can have a huge impact on the total budget. The technology costs also considerably affect the implementation cost. The bigger the tech stack, the more will be the implementation costs.

This is where SaaS loyalty software is highly beneficial. As per the 2025 Global Customer Loyalty Report, 28.8% of respondents chose the “ease of managing the loyalty program” as the most valuable aspect of third-party loyalty technology.

4. Marketing costs

Marketing a loyalty program is as important as creating and running it, if not more. This type of cost involves designing and creating marketing strategies for loyalty programs, paying for the creation and printing of marketing materials, and incurring the costs of promotional and advertising campaigns.

As per responses summarized in Global Customer Loyalty Report 2025, on average, companies with a loyalty program allocate 31% of their total marketing budget to customer loyalty program management and Customer Relationship Management. The number has risen 5.4% from 22.8% in 2022.

5. Customer support cost

Creating and implementing loyalty programs is one thing but providing the right customer support is an altogether different ball game. From onboarding clients to assisting them in collecting and redeeming loyalty points, customer support is a huge part of loyalty programs.

When you create a loyalty program, you need to figure out the types and levels of support you intend to provide to your clients and set aside the right budget for that. If you create and run your loyalty programs in-house, it will require you to hire dedicated customer support representatives to provide customer support. But if you partner with a loyalty solution provider, then the provider will bear the customer support cost.

6. Location

Location plays a huge role in determining the costs of a loyalty program. For instance, a company that’s based in New York will have different costs to create and run a loyalty program than a Mumbai-headquartered firm. Let’s take a look at the cost of loyalty programs in different countries:

• As per several reliable sources, the average annual cost per device for small and mid-sized loyalty programs ranges between USD 100 and USD 500 in the United States and Canada.
• Likewise, in the UK, the average yearly cost per user for small and medium-sized loyalty programs ranges between GBP 75 and GBP 400.
• In Australia and New Zealand, the average annual cost for small and medium-sized loyalty programs ranges between AUD 150 (or NZD 160) and AUD 750 (or NZD 810).

In India, the cost of loyalty programs is the most cost-effective. Many loyalty companies in India can design the same quality loyalty software and app-based loyalty programs just for a fraction of costs.

7. Add-on or update costs

Add-on costs are the expenses incurred by businesses when they add new features or functionalities to their existing loyalty programs. Update costs are the expenses that keep existing loyalty programs up to date. Both these costs apply to the companies that have existing loyalty programs and they just pay for the addition of more features or update costs.

8. Knowledge costs

As the name suggests, knowledge costs include the costs of skilled technical experts, such as frontend and backend developers, UX/UI designers, project managers, and more such professionals.

In the US, market rates for these professionals range from $104,000 to $180,000 per year.

In India, the market rates are much lower. If you contact some reputable and trustworthy loyalty program companies in India and ask about their pricing plans, you will be surprised to learn how cost effective they are compared to their counterparts not only in North America, Western Europe, or Oceania, but also in other parts of the world such as the Middle East, South Africa, and many Southeast Asian countries.

9. Platform costs

The cost of integrating a loyalty platform into the existing systems is something businesses must keep in mind. 

Based on an organization’s internal processes, the platform implementation costs can range between $4,000 to $8,500 per month.

After the development of the loyalty program’s core functionalities, the real work begins. The platform needs to be integrated into Customer Relationship Management (CRM), billing, and sales systems.

Best Practices to Optimize Loyalty Program Cost

Creating and implementing loyalty programs is going to cost money. But it’s easy to optimize the costs and pay the right price for your loyalty campaigns. Let’s find out what are those:

1. Determine the features you need

An average loyalty software solution comes with several features, some of which may not be as useful as others. Before looking for any loyalty solution provider, list out the features you want and need in your software. This will help you ensure that you do not pay for features that you won’t ever need.

2. Set aside a reasonable budget

After determining the features you need, setting aside a reasonable budget will help you in a lot of ways. First, it will guard you from overinvesting in the software. It will create a maximum upper ceiling beyond which you mustn’t go. Second, it will also prevent you from the temptations of ‘offers’ and ‘discounts’ on loyalty solutions and save you from low-quality products.

3. Select the right loyalty solution provider

This is the most critical step of all. In a highly-crowded market, you won’t find it difficult to find loyalty solution providers. But it would be extremely challenging to find the right one. Selecting anything less than that will be costly and wasteful in the long run. Nowadays, many loyalty software providers are providing free demos. You can search the internet and find some promising companies that provide free trials, which will help you in making an informed decision.

4. Create coupons with a minimum spend limit

To make sure that loyalty discounts don’t hamper your margins, create coupons with a minimum spend limit. The value should depend on your product’s margin and pricing. Also, start stringently and adjust your rewards as you go. But don’t make rewards, benefits, and points hard to obtain as it can be detrimental to your loyalty program.

5. Provide tailored and relevant rewards to your customers

The type of loyalty rewards you provide to your customers plays a huge role in determining your costs. If you choose transactional and financial incentives over experiential and non-transactional rewards, then it’s going to pinch your pocket more. But when you know your customers well and determine how many of them value non-financial rewards, then creating tailored and relevant rewards for them can prove to be cost-effective.

Industry-Specific Loyalty Program Costs

Would you be surprised to know that loyalty program costs in one industry varies from another? You shouldn’t. That’s because when it comes to retaining customers, some sectors have it easier than others. The ones that face more difficulties in retaining a majority of their customers are more likely to spend more and exert more effort into making their loyalty programs successful. Here are loyalty program costs as per different industries.

1. Retail industry

As per a latest study the cost of running a loyalty program in the supermarket industry is between 1-1.5% of revenue. As per the report the cost of running a loyalty program in other retail sectors can range from 2-5%.

2. Quick service restaurants (QSR)

According to a PayiQ report, the cost of a loyalty program in the QSR space averages approximately 10% of total company budget due to high transaction frequency and low average order values.

3. Hospitality and travel sector

As per a release by Lodging Magazine says that hotel loyalty programs cost an average of 1.5% of total operating revenue. As per the report airlines invest even more substantially.

4. E-commerce sector

According to a recent study, the initial setup costs of loyalty programs in the e-commerce industry could range between $10,000-60,000 and the monthly software fees can be about $50-$500.

5. BFSI sector

In the banking, financial services, and insurance (BFSI) sector, the cost of retaining customers is a bit higher and takes more effort. Apart from that, many lenders and financial institutions are known to offer attractive cashback, fee waivers, partner discounts, travel miles, interest rate boosts, and more. The average cost of implementing a loyalty program in the BFSI sector is relatively higher compared to other sectors.

Conclusion

The cost of a loyalty program depends on several factors. And it is critical for businesses to carefully evaluate these factors and make informed decisions. Teaming up with the right loyalty partner and leveraging sophisticated technology can enable businesses to reduce their loyalty program costs in the long run.

Choosing a loyalty software provider can make a huge difference when it comes to cost optimization. At LoyaltyXpert, we have a proven track record of designing, creating, and implementing the right types of loyalty programs for the best price. To book a free demo, contact us today!