A well-designed app can provide a virtual wallet of loyalty points and status and be an easy and convenient platform for redeeming rewards. Gamification elements such as badges, leaderboards, and challenges can increase engagement.
Providing users with a choice of interaction models (physical cards, apps, or wallet-based mobile programs) also increases program adoption rates.
In a world where people are bombarded with tons of communication, a loyalty program app creates dedicated channels and helps build a bond. This is especially important for brands that sell products that require repeated use or ongoing maintenance, such as skin care, fitness, and automotive.
When launching a loyalty program, the first step is to establish its basic structure and set a clear roadmap for its development. This includes determining a marketable name for the program, as well as the tiers, purchase requirements, and benefits that will be available to members.
Loyalty programs can help capture customer data and provide various insights marketers can use to increase sales. For example, a loyalty program could offer customers coupons to purchase a product they have already tried and liked. This can reduce churn rates, as it will remind customers of a positive experience with the brand. Also, loyalty programs that integrate advocacy marketing tactics can encourage customers to evangelize about the brand and help them generate more referrals and purchases.
Loyalty programs can add fun and excitement to a brand’s customer interaction. A new generation of loyalty programs uses gamification to engage members and reward nontransactional behavior. This program incorporates game-like elements like badges, levels, and rewards for repeat behaviours such as social media activity, registering an account, or subscribing to a newsletter.
Another emerging trend is value-based loyalty programs connecting with customers’ values. These programs often emphasize ethical sourcing and manufacturing, fair trade practices, and transparent data collection policies, among other things.
A frequent question is whether loyalty programs are cost-effective. But the answer is more complex than simply looking at a single transaction. The accumulated data from these programs can help businesses grow through personalized engagement and strategic partnerships, particularly in high-frequency industries like restaurants, credit card companies, and beauty brands. The resulting customer stickiness can boost revenue by driving up spending per person.
For a loyalty program to truly succeed in creating loyal customers, it needs to be seamless in its integration. This includes ensuring that your mobile app is integrated with customer wallets and popular payment platforms so users can seamlessly move between merchants. It also means offering a seamless experience for accumulating points and rewards.
Whether for coffee sales, ride-hailing services, credit card use, or beauty purchases, loyalty programs are the hub of many customer engagement strategies. That’s because they capture valuable data that can help marketers monetize through highly personalized customer engagement.
The best loyalty programs have been found to uplift sales significantly, and top-performing programs show that they drive customer stickiness and spending. But the key to a successful program is thoughtful design contextualizing your brand and product environment. Only when these programs are rooted in specific customer preferences and expectations will they be able to drive loyalty, retention, and referrals over time.
While omnichannel and mobile-first loyalty programs can potentially improve customer experience, they pose challenges. For example, a lengthy registration process, unclear terms and conditions, and technical difficulties with redeeming rewards will likely deter customers from making the most of these programs.
A simple, intuitive app can help overcome these barriers by simplifying the overall experience and making it easier for customers to use a brand’s loyalty features. A well-designed app can also encourage customers to check their digital loyalty points and purchase activity – increasing engagement.
Points-based programs are popular in retail environments because they allow customers to cash in their earned rewards for free merchandise and discounts. This program can also offer tier-based rewards, ranking members based on their sales performance and engagement.
Creating a successful loyalty program requires a cross-functional team. This includes people from eCommerce, branding, legal, innovation, and digital marketing, who must all understand and support the goals of a customer rewards program. This helps to contextualize the program to a company’s specific product environment and market position.
With native app software, loyalty programs can be shaped to fit customers’ preferences and expectations. The rich user experiences within these apps capture a wide variety of customer data — more than the desktop or mobile web — enabling brands to provide more personalized communications and offers.
Tiered loyalty programs offer a path for customers to reach higher levels with greater prestige and exclusive privileges. Many brands use loyalty programs to personalize the customer experience based on purchase history. For instance, almost half of buyers say they buy products that weren’t initially on their wish list after receiving a personalized recommendation from a business. These perks boost sales and increase CLV while turning loyal evangelists to the brand. Whether these perks are special offers, freebies, or gamification elements like badges and challenges, they will make your customers feel valued and appreciated.