Generally, larger issuers have greater economies of scale. A low scale program presents cost challenge in managing administration and redemption expenses.
Program administration costs increased with the rise in complexity of loyalty programs, and can range from between 10-20% of the overall loyalty costs. This can drop to 2-5% with an increase in the customer base and loyalty program spend due to economies of scale.
By delivering a flexible platform that enables issuers to adopt various business models, program costs can be distributed among participants. Issuers have access to the tools needed to improve loyalty program design and management to minimize administration costs.