Mobile Loyalty. How to Create a Loyalty Program in a Mobile App
Today, the lion’s share of loyalty programs comes primarily in the form of mobile apps. The apps are appreciated by both club members and organizers. The former value them primarily for their convenience of use. The latter, on the other hand, for their efficiency and huge functional capabilities. In this article we will look at the role of mobile apps in the loyalty program industry. We will analyze the benefits and explain why this form is exceptionally popular among companies.
The Role of a Mobile App in a Loyalty Program
While some time ago the programs mainly functioned in two forms – the traditional plastic card, and the app served a complementary function, today, it is increasingly the only form of access to the loyalty program. What is its role?
The mobile app is first and foremost the main communication channel between the brand and its audience. It allows sending push notifications about new promotions, sales or special offers, which cost nothing. Compared to the cost of sending SMS to a base of several hundred thousand, this is a huge saving for the company in terms of communication expenses. This keeps customers up to date with attractive bargains and encourages them to buy more often. That’s not all, however, as mobile applications allow the implementation of two-way communication. This allows the brand to not only speak, but also listen and respond to the needs of customers.
The program organizer can easily update offers and promotions on the mobile app. This keeps him up-to-date with his audience. This makes it possible to provide fresh content and avoid outdated information. Users value ease of use and usability in apps. In the app, they find up-to-date information about promotions, upcoming offers, special actions, so they can plan their purchases and enjoy the available benefits.
While the cost of designing and implementing a mobile app may seem high at first, at the end of the day it turns out to be easier and cheaper to maintain overall. They eliminate the problem of manufacturing and logistics of plastic cards or registering by filling out a paper form. In addition, any change can be made remotely within minutes. Both on the part of the company and the user who wants to update, for example, his or her email address or preferred store.
Why Customers Demand Mobile App Loyalty Programs
Customers wholeheartedly embrace mobile loyalty programs for a multitude of reasons, primarily centered around convenience and enhanced control. One major draw is the quick and easy registration process, which often takes just a few taps, eliminating the hassle of lengthy paper forms or physical card sign-ups. Once enrolled, users gain instant access to their complete transaction history, allowing them to track purchases and points effortlessly. Mobile apps also foster community and engagement by offering the ability to share product opinions, giving customers a voice and influencing future offerings.
Beyond personal account management, these apps serve as powerful shopping tools. Customers can easily browse the brand’s offerings at their leisure, and critically, search for product availability in specific stores, saving time and preventing wasted trips. What truly sets mobile loyalty programs apart are the special offers exclusively available to app users, making the app a gateway to unique savings and promotions. Furthermore, the power of data enables brands to provide personalized offers, delivering deals and recommendations that are genuinely relevant to each individual, fostering a stronger sense of value and connection. This blend of accessibility, utility, and personalization transforms the shopping experience, making loyalty programs a truly indispensable part of many customers' daily routines.
Key Features of Mobile Loyalty System
A good mobile application must, first and foremost, provide functionality and value to users. This way they will feel the need not only to install it, but also to use the app and the offers available in the program on a regular basis. It will include not only basic functionality such as a virtual card, transaction history or available offers, but also additional features that make the program easier to use and improve the customer experience, such as click & collect shopping, mobile payments, an up-to-date promotional newspaper or a price scanner, among others. Push notifications can only be sent to active users, so care must be taken to ensure that club members use the app regularly
With mobile apps, you can take your loyalty program to the next level and engage customers more. Using gamification elements, you can encourage customers both to use the app regularly and to visit stores more often.
Integrating mobile payment options, such as popular digital wallets or secure payment gateways, is a game-changer. This allows customers to make purchases directly within the app with unparalleled convenience. By streamlining the payment process, the app not only simplifies transactions but actively encourages users to engage with the loyalty program at the very moment of purchase, closing the loop between earning and spending.
A smart loyalty app includes a robust feedback and ratings mechanism. This gives users an easy way to share their thoughts, suggestions, and even concerns directly within the app. For program operators, this is invaluable, providing direct insights for continuous service improvement. Allowing users to rate their experience or leave reviews also plays a vital role in building trust and credibility, showing potential new members that the program is valued by its existing community.
Among the best practices, it is also worth highlighting the need to monitor and analyze the effectiveness of the loyalty program. Collecting data on user activity, conversions or reactions to various actions in the application will allow continuous adjustment of the strategy. This will make the program increasingly effective and deliver value to both users and the company.
Advantages of Loyalty Programs in Customer Apps
Mobile loyalty cards have many advantages. First of all, they provide great potential for building a strong customer bond with the brand. What do customers appreciate them for? First of all, for quick and easy access to offers. Thanks to mobile apps, customers have instant access to their loyalty account anywhere, anytime.
In addition, customers can keep track of their earned loyalty points, transaction history and available rewards in real time, making it easier for them to manage their benefits.
A mobile app's advantage lies in its ability to leverage native smartphone features. This includes push notifications, which offer instant, always-on communication directly to the user's lock screen – a far more immediate and attention-grabbing method than emails or SMS, which can easily get lost. Apps can also tap into geolocation services, enabling highly relevant, location-based offers or reminders when a customer is near a store, a level of real-time contextual engagement impossible without a dedicated app.
Furthermore, apps facilitate seamless integrations with mobile payment systems (like Apple Pay or Google Pay), turning the phone into a comprehensive loyalty and payment tool. Finally, the app environment provides a dedicated, branded space for rich multimedia content, interactive gamification elements, and advanced personalization driven by machine learning that analyzes in-app behavior. This level of immersive experience and dynamic adaptation simply cannot be replicated by a web browser or simple text messages, making the mobile loyalty app the undisputed champion for deep customer engagement.
Loyalty App Analytical Adventage
Beyond customer-facing benefits, a dedicated mobile app offers significant analytical capabilities. By having an app, you gain a new level of insight into user behavior. You can track how customers interact with your offers in real time, precisely measuring which products they spend more time viewing, what they compare, and what ultimately influences their purchasing decisions. This rich, in-app data provides a detailed understanding of the customer journey, enabling you to refine your strategy, optimize your offers, and tailor the experience with a level of precision that is difficult to achieve through traditional loyalty methods.
Mobile App Loyalty Program Implementation Best Practices
Now that we've explored the crucial role of a mobile app in modern loyalty programs, let's look at the strategic best practices for planning your app initiative. Launching a successful mobile strategy isn't just about developing the tech; it requires a well-thought-out approach from the ground up.
Secure Executive Buy-In
First and foremost, securing executive buy-in is non-negotiable. Leadership support ensures your app initiatives receive the necessary funding and, crucially, are seamlessly coordinated across different departments. Demonstrating significant potential for revenue growth with compelling data will always make a convincing argument. Executive backing helps unify teams across the organization, bridges silos, and fosters genuine collaboration. It can also unlock access to vital resources and significantly accelerate decision-making. Gaining stakeholder consensus early on creates invaluable momentum for your project. You can read more about how to talk to different stakeholders on our blog in the article How to Communicate and Convince Different Stakeholders to a Loyalty Program or Its Changes.
Audit Your Current Loyalty Program's Untapped Potential
Before diving into development, it's vital to conduct a thorough audit of your existing loyalty program's untapped potential. Analyze current metrics like registration rates, active users, reward redemption rates, and transaction frequency to pinpoint key areas for growth. Delve into customer segmentation to identify which groups hold the greatest potential for increased engagement. Benchmark your program against competitors to spot performance gaps and opportunities. Conduct member surveys and focus groups to uncover pain points and gather ideas for exciting new features. From this data, you can formulate theories on how an enhanced app experience can overcome existing challenges and unlock new value.
Create a strong UVP for your loyalty program (if you don't run one)
A loyalty program isn't just about offering discounts; it's about delivering a Unique Value Proposition (UVP) that genuinely resonates with your customers. Before you build a single feature, define what makes your mobile program uniquely valuable. Ask yourself: What core problem does our loyalty program, delivered via an app, solve for customers that our competitors don't, or can't, solve as well?
Perhaps your UVP is about exclusive, app-only access to new products, a frictionless and hyper-personalized in-app shopping experience, or a sense of community fostered through gamified challenges and a mobile social feed. A well-defined UVP will guide every decision you make—from the types of rewards you offer to the app’s design and user interface—ensuring your program isn't just another app on a crowded phone screen but an essential, go-to part of the customer's daily routine.
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Define Clear Goals and Key Results
With insights in hand, the next step is to define clear goals and key results (OKRs). Set specific, measurable targets for key metrics over 6 and 12-month periods. Prioritize the most critical indicators you'll focus on. Ensure these goals are not only realistic but also ambitious enough to truly drive performance. Tailor your Key Performance Indicators (KPIs) to match the maturity level of your current loyalty program.
For instance, compelling goals might include:
- Increasing monthly member visits
- Growing your active member base
- Boosting the 90-day retention rate
- Increasing annual spend per member
Additional examples could involve boosting reward redemptions by 15% or achieving over 50% of transactions through the app. Clear OKRs are instrumental in communicating priorities throughout the organization and aligning all efforts. Understanding these best practices for your mobile app initiative lays the groundwork for a truly successful app launch. Once this solid foundation is built, the next crucial step will be partnering with a team that can help bring your vision to life.
Features to Elevate Your Mobile App Loyalty Program
Once you've established your foundation with a clear strategy, the next step is to elevate the customer experience with compelling and popular in-app features. Modern mobile loyalty programs go far beyond a simple points system; they transform the app into an engaging, multi-purpose tool that customers use daily.
Here are some of effective features gaining traction today:
- Gamification Elements: Turn routine purchases into an exciting game. Features like a "Shake-to-Win" for a special offer, digital scratch cards, or even daily login streaks can boost engagement and make the experience feel fun and rewarding.
- Shopping & Offers: Integrate digital flyers or weekly ads directly into the app, allowing customers to easily browse promotions. This feature can be further enhanced by offering app-exclusive deals that create a sense of special access.
- Receipt and Purchase History: Provide a digital wallet where customers can store receipts and track their past purchases. This not only offers convenience but also helps you gather valuable data on customer spending habits.
- In-App Purchases: Enable a seamless shopping experience directly within the app. Whether it's ordering ahead for pickup or making a purchase for home delivery, this functionality adds immense value and convenience.
- Interactive Contests & Lotteries: Drive excitement with regular lotteries or exclusive contests that give loyal members a chance to win significant prizes. This encourages frequent app usage and generates buzz.
- Personalized Content: Go beyond simple offers by using customer data to deliver highly relevant product recommendations, personalized challenges, or tailored content that builds a stronger relationship.
Customer Concerns
In the past, the limitation in joining another loyalty program was the capacity of the wallet and the number of compartments that hold plastic cards. Today, it’s the capacity of a smartphone and the space to install another app. As more companies introduce their own loyalty apps, customers may find themselves overwhelmed by the number of installed programs, which can lead to disorganization and loss of motivation to use them. Mobile loyalty programs can also contribute to the information overload effect. The constant bombardment of in-app notifications and offers can lead to confusion and a decline in customer engagement. Effective communication requires subtlety and the ability to deliver content that is truly valuable to the recipient.
Another concern that comes to mind is the issue of data sharing and security. Mobile apps often require access to a variety of personal information, and some customers may be wary of sharing their data fearing potential privacy breaches. The rising number of data misuse incidents is increasing consumer awareness of this issue, while also heightening the fear of joining yet another loyalty program.
The technological barriers of the recipients are also an aspect to look at before launching a loyalty program on a mobile app. Not all customers have modern smartphones or are familiar with technology, which can be a barrier to using loyalty apps. It is necessary to research the target audience before launching a mobile app so as not to significantly limit the potential reach of the program.
Loyalty Application – Summary
In today’s world, a mobile app is no longer just an “extra option” but a “necessity” if you want to gain and maintain customer interest. However, it is important to remember that such an application must be followed by quality. In this era of high competition in the mobile app market, a customer without a good reason is unlikely to install another app on his phone. By offering the customer a well-thought-out, easy-to-use app, we can influence not only sales, but also evoke positive emotions toward the brand. Mobile apps are constantly being improved, making it likely that the spectrum of their possibilities is still ahead of us. However, it is worth remembering that an app is only one of many points of contact with the customer, and the key is to offer an equal experience at each stage of the customer’s purchase path.
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