What Makes Mobile Loyalty Programs Work?

Read Time: 5 - 10 min

When it comes to brands, users have never had more options. And doesn’t it feels like every one of those brands offers some kind of “rewards” program? Maybe some of these are a thinly-veiled excuse to add another email address to the list, but when a company gets it right, you get a 13.3 million-users-strong success story like Starbucks.

 
How Do We Know They Work? The Data, Of Course 


Like every marketer knows, it’s easier to get a customer to come back then to convince a new one to try you out.  Cost of acquisition is the reason behind why we work so hard to build relationships with our customers, and why we reward our most loyal customers. After all, it’s better for your bottom line to maintain your relationship with the person who turns to your brand regularly:
companies that increase retention by 5% saw a 75% increase in profitability.

Loyalty programs are a long-proven tactic to help build these relationships. Between 2008 and 2012, memberships by household increased 10%. Plus, 58% of businesses using a loyalty program saw an uptick in customer satisfaction within a year after implementation.The qualities that determine whether loyalty programs take off--being driven by data/customer behavior, ease of customer use and access--are made even better, thanks to the personalization made possible by mobile tech.

 

Personalization is All About Empathy--and Empathy Builds Loyalty


But the nature of mobile--it’s ability give you a deeper insight into your users as they go about their day and interact with your brand--makes it possible for marketers to create experiences that better serve users, and keep them coming back. Prioritizing your users’ needs is how your brand can show empathy, and build more loyalty with them.  Prioritizing user needs overlaps with creating a more enriching experience. App developers can use gamification, location-based marketing, a robust mobile payments system, and machine learning. (And that’s just to start!)

 

Take Gamification To the Next Level

 

Loyalty programs have long put gamification to work in paper with the classic punch card. (That everyone loses, right? If you’re the exception to the rule, please teach me your ways.) Gamification brings goal-setting and competition (which people tend to love) right into your app experience.


Untappd, an app that helps beer enthusiasts share new finds and opinions, uses gamification to reward longtime users with a badge. On mobile, badges are unlocked and milestones are achieved in real time. If you wanted to reward these users, they could save a special discount or coupon code right in the app.

 

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Location-Based Marketing

 

You want to reward the users you really care about with a truly top-notch experience--and that means a personalized experience. It doesn’t get much more personal than content based on where your user is, right at that moment.

 

Starbucks is the perfect example. As of 2016, their loyalty program, Starbucks Rewards, had 16 million active participants, up 16% from the year before. Many of these participants use the Starbucks app (you can only get stars if you’re using the app or a Starbucks gift card.) Location-based marketing lets users find and order from the nearest Starbucks, so that by the time they arrive, all they need to do is pick up their coffee--and get a little closer to their next reward.

 

Mobile Payments


The growth of mobile payments--predicted to reach $503 billion by 2020--is attributed to mobile loyalty programs in part. Loyalty programs built around an app experience offer customers a clear incentive to purchase via mobile payments, even if they may be typically hesitant to do so. Sweetgreen rewards regular customers with a free salad--but to earn those credits, they have to pay through Sweetgreen’s mobile wallet.

 

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Machine Learning

 

Just like location based marketing, machine learning lets you create a rewards program experience that’s more personalized to  your mobile users. What kind of rewards are better: the ones that you blast out to all your users, regardless of how they buy or interact with your brand, or the ones that are based off their behaviors and the behavior of similar users?

 

Marketers can use machine learning to implement an omni-channel strategy as well. As systems better integrate user data, your app can offer loyalty incentives and rewards based on what’s likely to resonate with your users, rather than a one-size-fits all offer. You won’t get excited about a burger from your favorite sandwich shop if you always order veg, right?

 

So what’s the foundation of a successful loyalty program?

 

Keep it simple.


Even users who really love your brand will lose momentum if they can’t figure out what you’re offering. Despite Chipotle offering one of the best returns for a purchase in the loyalty program game, the complexity of their seasonal program, Chiptopia, is typically one of the reasons cited for its failure to resonate with Chipotle customers.

Here’s Dunks. It’s pretty straightforward: you spend money, earn points, and eventually you’ll get what most of their customers are there for: free coffee.

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Give users the rewards they want.

 

Building loyalty is easy when you’re showing users empathy, and data makes it possible. Target incentives to user behavior and preferences as much as possible.  

 

Make it easy.

 

If you want to drive purchases, you’re going to need a streamlined mobile wallet solution. It’s that simple. Build your own in-house, or take advantage of the popular solutions offered by universal mobile wallets like Apple Pay and Android Pay.

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Athleta’s app makes applying your Gap Inc. rewards and cash when you’re checking out simple.


Loyalty programs are about rewarding your superusers. (And creating more superusers!) What better way to build stronger connections with this audience than with a program designed to serve them when and how they want?

 

Have you made an app part of your rewards strategy?

 

 

The Enterprise Guide to Omni-Channel Marketing

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