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Developing Digital Loyalty Apps

Check your wallet, open your smartphone, jingle your keychain. There’s a high chance that you have a membership savings card buried in your wallet, an app on your smartphone to track purchases and discounts, as well as a punch card on your keychain marking repeated purchases over time. These rewards and memberships offered by preferred businesses are not only popular but expected as a tool to establish consumer loyalty with the hope of brand advocacy. Customers expect some kind of personalized connection with companies, and a loyalty program offers an opportunity to personalize at scale.

Nearly 90% of businesses offer some kind of customer loyalty program because these programs increase revenue and customer retention. 84% of customers decide to stay with a brand that offers some kind of incentivized program. Spending behaviors change because of earned rewards or points, so the decision to offer a rewards program is popular for many businesses. Ultimately, it costs less to retain customers than acquire new ones, so establishing loyalty programs is a strong way to increase sales, retain existing customers, and build advocacy.

There is no one way to structure a loyalty program, and with innovative methods to connect with consumers, there is no limit to creativity in building a unique reward program. Traditionally, programs were categorized into four distinct categories:

  • Paid Loyalty Programs
  • Points Based Loyalty
  • Tier Program
  • Value Based Loyalty Program

Regardless of the style of loyalty program, consumers enjoy the benefit of discounts, sales, or early access to products or services.

Paid loyalty programs offer members benefits with either a one-time or ongoing participation fee. These kinds of programs need to establish proof-of-value to procure participants, where it’s clearly communicated that the benefits from participation outweigh the fee. Advantages of fee-based loyalty programs include personalized experiences and special members-only content. These interactions are valuable with higher engagement levels, and a continuous stream of new content fueled by customer conversations.

Points-based programs are by far the most common type of loyalty program. As customers accumulate points, they are eligible to redeem these points for discounts, cash back or even special perks. Businesses are creative in how these points are awarded, where posting on social media, leaving product reviews, having a birthday registered or creating gamification tactics earn rewards points.

Tiered programs establish different levels of rewards based on rank. Customer spending or engagement metrics determine these ranks, which in turn determine rewards. Having these tiered rewards creates goals for members, where increasing rank increases the desirability of reward.

Value based programs offer a different kind of connection to consumers, where selected charities or social programs benefit from a customer’s spending. Electing to contribute to the charity of choice tends to foster a deeper connection to a business when members can contribute to a cause that aligns with personal values.

Companies thinking about starting a rewards program should consult the experts first: customers. Running a poll or sending a survey is an excellent way to see what will resonate with customers before committing to a rewards program.

Every business today is competing to earn customer trust, and by creating a loyalty program, alongside excellent customer experience, companies will enjoy increased retention and improved customer lifetime value.

To learn more about how Junction Creative Solutions’ (Junction) results-driven approach to growing a business can design an effective loyalty program for you, call 678-686-1125 today.