Two Types of Apps to Ensure Customer Loyalty: Which to Choose for Your Business?

Getting and maintaining brand loyalty has never been more important. According to the Meaningful Brands 2019 report by Havas, 77 percent of brands could disappear and no one would care. 

On the other hand, brands can win loyalty by rewarding their customers. In a survey by HelloWorld, 61 percent of respondents stated that the most important way a brand could interact with them was by surprising and rewarding them for being a good customer. Competing for customers’ trust should be among the ultimate goals of a business. 

To win loyalty, brands employ numerous loyalty techniques like incentives, trials, brand ambassadors, rewards, and loyalty programs. 

In our article about luxury brand app development, we talked about how your app can increase customer satisfaction. Apps for enhancing loyalty can be developed for:

- an individual retail business (as a marketplace for daily deals)
- brands (as a brand app)

In this article, we’re going to discuss these two types of apps and various loyalty rewards programs for each in order for you to know how to build a loyalty app.

Loyalty apps for retailers

In-app rewards have a special place in creating customer loyalty and are an effective customer retention strategy. Rewarding users for dedication to your brand through points, gamified rewards programs, and discounts inspires them to come back to you again and again. 

For example, letting customers earn points within a branded mobile app encourages customer loyalty to your product or service. Points can be used as in-app currency that can be collected and exchanged for rewards.

In order to deliver value to your customers, you should know their needs and understand their expectations. These are hard to figure out initially, so you should take some time to perform customer research and analyze user interactions with your app. Loyalty programs only bring meaningful results after you know your customers and how they use your app. Let’s now turn our attention to some of the most efficient loyalty programs.

Starbucks. Starbucks uses stars as in-app points. When users earn enough stars, they get a free drink. To earn stars, users must pay with a registered Starbucks card or a card registered in the Starbucks mobile app. By rewarding frequent customers and letting users send eGifts to friends via email, the Starbucks mobile loyalty app offers great customer service. Recently, Starbucks President and CEO Kevin Johnson announced the continued momentum of Starbucks mobile app rewards program in its earnings call. During the second quarter of 2019, Starbucks expanded its active member base by half a million people (a 13 percent increase) and took the ranks of its active mobile app rewards membership to 16.8 million. 

Starbucks-loyalty-app

ASOS. This UK-based online retailer initially ran an online A-list loyalty scheme, enabling customers to unlock rewards such as birthday discounts, early access to sales, special offers, and events. But in 2018, ASOS moved away from this scheme, announcing that the company would focus on better approaches to reward their loyal customers. ASOS expanded their loyalty program with subscription-based Premier Delivery. According to Marketing Week, the number of Premier customers paying for unlimited next-day delivery was 1.3 million in August 2018 and grew 53 percent during the year.

Chick-fil-A. This American fast food restaurant chain offers a membership program allowing customers to earn points with every purchase. Customers can redeem these points for rewards such as free food and giveaways. To engage in the program, customers need to download the Chick-fil-A mobile app or create an account online. In order to earn points, customers have to make in-store, in-app, or catering purchases from Chick-fil-A. There are three levels of membership based on points earned: Member, Silver Member, and Red Member. Customers become Red Members when they earn 5,000 points within the same year, entitling them to the best rewards such as tickets to VIP events.

Chick-fil-A-app

Marriott Bonvoy. The free Marriott Bonvoy loyalty program offers rewards from more than 6,700 participating hotels in over 130 countries. Membership enables customers to enjoy points toward free nights, a faster booking process, exclusive member rates, and custom booking preferences. In their online Marriott Bonvoy account, customers can look through their points balance, see past and upcoming bookings, and find the best offers. All these perks are available within the mobile app.

Read also: What to Expect from the App Store and Google Play Store When You Launch Your First App

Categories of customer loyalty programs

When launching a loyalty program, the key question is how you'll reward your customers. Most rewards fall into one of three categories: points, tiers, and paid membership. 

Points. Loyalty points programs allow customers to collect points they can redeem for free products/services. Such programs are easy to set up, making this the most common type of loyalty program methodology.

Tiers. Companies such as Arteza and Sephora actively use tiers to increase customer loyalty. Tiers are an excellent way for businesses to get their customers more engaged by gamifying their rewards programs and making them exclusive. Such programs offer different rewards depending on the tier. To get to the next tier, a customer has to pass a milestone. Milestones might be anything from spending a certain amount in a month to making a certain number of lifetime purchases.

Paid loyalty programs. Customers pay a fee to enroll in a paid loyalty program. Such programs provide rapid ROI through membership fees and enable businesses to concentrate on their most engaged customers. Customers who pay for loyalty programs are engaged from the start and keep investing in the brand. Restoration Hardware is an example of a company providing a paid loyalty program. They charge $100 a year for access to discounts and design consultations.

Sephora-app

What actions can you reward customers for?

Let’s outline specific things you might reward your customers for doing:

Reaching spending targets. For instance, when a customer reaches a spending target, they might get 10 percent off their next purchase of $100 or more. Keep in mind that limited-time offers are likely to encourage prompt purchases.

Reaching a target number of purchases. Once a customer reaches a target number of purchases, they qualify for a free item as a gift or receive discounted membership at, for example, the local gym.

Giving feedback about goods or services after free trial. Asking consumers to provide feedback on a new product before you launch gives them a sense of ownership, which may lead to higher sales and positive word-of-mouth recommendations.

Recommendations to friends. Offer your customers discounts and gifts in return for every new customer they bring to you.

Other actions. Allow customers to earn points for multiple actions. These might be viewing product videos, using your mobile app, following and sharing social network content, and subscribing to your blog. We recommend rewarding any valuable signs that a customer is engaging with your brand, as it will result in higher customer loyalty.

Retailer loyalty app functionality 

You can include several cool features during loyalty app development.

Loyalty card management

If an app offers loyalty cards, it should simplify the way users manage them. Starbucks keeps its app connected to existing loyalty cards that are already familiar to customers. Users can pay for a coffee, give a tip, and refill their card via their mobile device.

Location-based pushes

You can use location-based pushes to provide highly targeted offers. For example, the Starbucks app accesses a user’s location and purchase history. When the user passes by a Starbucks coffee shop, they receive an offer.

Search

Geolocation-based search helps users find rewards and coupons for nearby places. Using the Starbucks geolocation feature, for instance, a customer can find the closest Starbucks location, look at its menu, and even place an order to be ready upon arrival.

Payments

Ensuring smooth and fast payment options within a loyalty app is a must. Starbucks provides a one-touch mobile pay system, which makes it easy for users to pay for their coffee and reduces in-store queues. To pay, customers only need to scan an on-screen barcode at the register. 

More than 200 brands use the LevelUp system, which allows businesses to accept mobile transactions using NFC and QR code technology. LevelUp is powered by the Braintree payment gateway. To pay with LevelUp, users scan a QR code displayed on their phone at a LevelUp terminal. Campaigns can be customized for different applications and serve various purposes, from customer acquisition to surprise rewards.

Read also: Stripe or Braintree: What Payment System to Integrate with Your App

Today, engagement strategies have to satisfy the demands of customers that require smooth, real-time experiences. They also need to retain customers of traditional brick-and-mortar stores using differentiated loyalty offerings. We’ve already seen how a loyalty app for retailers can ensure loyalty by means of different rewards. In the next section, we discuss how brand apps can indirectly increase user loyalty.  

Apps for building brand loyalty

Brand apps are a form of brand promotion. They enhance the customers’ experience with a brand. Thereby, brand apps indirectly raise customer loyalty. Approaches to brand promotion vary. The following examples can be a source of valuable insights.

L’Oreal augmented reality try-on apps. There are several L’Oreal beauty apps. For example, Style My Hair helps users try on different hairstyles. In 2018, L’Oreal acquired Modiface, a company that had a hand in building many custom AR beauty apps. Their 70 developers and engineers officially joined the Paris-based cosmetics giant. This acquisition has enabled the makeup empire to promote its huge collection of brands in a high-tech way. By allowing customers to try on their products, L’Oreal saves customers from wasting money on unsuitable cosmetics, strengthening customer loyalty.

IKEA apps for easy shopping. IKEA’s mobile apps have so far been concentrated on simplifying the retail experience. Users can preview furniture in their home through the IKEA Place app, create a shopping list in the IKEA Store app, and even make everyday habits more sustainable thanks to sustainability tips from the IKEA Better Living app. Currently, IKEA is building an app that will enable customers to shop remotely. The new app will also allow users to enter room dimensions to ensure a good fit and select from different styles and “life stages” to narrow choices.

Red Bull Mobile Oman app. Red Bull’s app lets customers check their balances, recharge, and add extra plans for more data and roaming. In addition, the app gives users access to tickets for events like Red Bull Car Park Drift, concerts, films, broadcasts on Red Bull TV, and discounts for merchandise.

Red-Bull-Mobile-Oman

In order to reap the full benefits of customer loyalty software, consumer-facing businesses must create an experience consistent with their brand and tailored to their customers’ specific needs. No matter which type of loyalty app you use, we hope this article will spur you to build your own unique and effective loyalty program.  

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