Why brands need to adopt a mobile loyalty program

Nowadays, brand loyalty amongst customers is on the decline due to intense competition and a plethora of choices. While loyalty programs are a great way to increase brand loyalty, most brands still treat their rewards program as an excuse to get an email address instead of adding value to the customer. But when a business gets their mobile loyalty program right, they get a 13.3 million-user-strong success story like Starbucks.

I am sure you would have heard the old adage – ‘It’s is easier to get an old customer to come back than to ask a new customer to transact with you’. This is a retention strategy that every marketer worth his salt knows. This high acquisition cost is the primary factor why brands need to build relationships with existing customers and reward them. As for reason for adopting a mobile loyalty  program, here are they :

Benefits of a mobile loyalty program

Loyalty programs encourage customers to align themselves with the values of your company and this could be a wonderful opportunity for you to build a long-term relationship with your customers and nurture them.
Howard Schultz, Starbucks’ CEO, once said, “If people believe they share values with a company, they will stay loyal to the brand.” Given below are a list of benefits that a mobile loyalty program offers.

  • Understanding customers

Understanding customers’ behaviour and buying habits will lead to an understanding of customers’ needs, which will help you to be at the right place at the right time; that is to say, you can offer them the right offers at the right time. You can keep your customers engaged by sending them messages at just the right time along with other communication such as push notifications and newsletters that will keep them informed about special promotions and discounts. This will also benefit the business through higher sales and conversion. A mobile app-based loyalty program also fosters a larger number of brand advocates who bring in a higher percentage of profitability and revenue compared to an average customer

  • Drive Mobile Payments

It is predicted that mobile payments will reach $503 billion by the year 2020 and this is partly due to mobile loyalty programs. Loyalty programs encourage customers to make purchases through mobile-based apps, even if they are reluctant to do so, in the beginning. Sweetgreen offers a free salad to its customers, but to earn this reward they first need to pay through Sweetgreen’s mobile wallet.

  • Staying ahead of the competition

Irrespective of how good or superior your products and services are, there will always be competitors lurking all around to pry your customers away. A good way to stay ahead of the competition is to create a differentiating niche for the brand. Ultimately, even when your competitors copy your product, your differentiators, like an effective mobile rewards program and an impeccable customer service is what will help you stand out and keep you beyond your competitors’ reach.Think smart, identify your advantages and leverage innovations to provide customers with an irresistible loyalty program.

  • Becoming the market leader

The best way to stay ahead of the competition is to become a market leader or a thought leader and by setting trends. If you raise the bar for the quality of your products and services and set standards for others to follow, you will not only survive in today’s customer-centric environment but also remain on the top.

“We shape our technologies and thereafter our tools shape us,” observation made by Marshal McLuhan, one of the most recognized experts in the field of communication studies, is accurate now more than ever, with 93% of business leaders worldwide saying technology has changed customer expectations in the past five to ten years.

A great customer loyalty program helps you create a moat around your brand and prevent your existing customers from jumping ship.

  • Convenience

Customers love loyalty programs and their benefits but gone are the days of carrying around plastic loyalty cards. Cards are lost easily, they aren’t practical for carrying around in a wallet and tracking redemptions can be difficult for business owners.
86% of marketers ranked mobile loyalty campaigns as very effective or effective, even if there are many who doubt them. In addition, 72% of consumers like better access to rewards and the ability to redeem their rewards more easily on a mobile loyalty platform(78%).

  • Boosts sales

A loyalty program can affect current and future customers. Sending the right offer to a current customer can generate recurring purchases (as in the Kohl’s example, where customers who are members of the loyalty program spend $80 more than those who are not) or it can attract potential customers and convert them into regular customers.

  • Reduced operational costs

Mobile loyalty programs are easier to maintain as compared to traditional loyalty programs. Offers can be changed instantaneously and sent to all users within seconds. The time spent is less and it works out to be economical than paper-based loyalty programs.

  • Acces to rich data

Analyzing, tracking and interpreting customer data is very important if you want to communicate the right messages and offers to your customers. Customers are more likely to use loyalty programs if the program is simple, easy to understand, and if the offers are exciting and relevant to them. Furthermore, brands that allocate 20% or more of their budgets to customer loyalty get a better understanding of their customers.

In order to find out what customers want, you need to decide which metrics to use and track the goals that you want to achieve. Every business has different methodologies and strategies to reach their targets and how to achieve them.
If you want to leave a strong initial impact on your customers, the number of app downloads is the best way to measure your success. If your goal is to get users to keep using the app, the percentage of active or returning users will give you an insight into your strategy’s success. In order to attract user attention, keep promoting specific feeds in the app and by keeping track of the most popular pages in your app, you can decide whether to change the contents of the app or to continue with the same content. It is also crucial to understand which pages are the most attractive to customers.

You might want to track the purchasing habits of your customers, the amount that they spend and how they deal with redemption. Based on the information collected, you can redesign your current campaign or create a new one for the future. You might also want your business to be a huge success on social media and go viral; in that case, analyzing and tracking the engagement metric for social media might be a good idea.

Loyalty

 

How to implement a mobile loyalty program?

The use of mobiles has changed the name of the game for loyalty programs; especially when it comes to creating more ROI.

Research shows “that customers who actively engage with brands and their loyalty programs make 90 per cent more frequent purchases, spend 60 per cent more in each transaction and are five times more likely to choose the brand in the future.”

A good example of this is Kohl’s. Members of the company’s mobile loyalty program are spending $80 more per transaction than those who are not. Mobile reward programs are also known to engage the younger generation a lot better compared to traditional card-based loyalty programs. Mobiles drive loyalty more than any other platform because they meet the needs of its members in the most convenient way.

Mobiles capture information such as location data, consumer preferences, app usage, attributes, purchase history like frequency, spend and more. Marketers drive customers back to the brand backed up by such rich and user-specific data, thereby ensuring an engaging and personalized customer experience.

The first step towards designing an effective mobile loyalty program is to understand what your customers want. Loyalty marketing expert Howard Schneider says, “Savvy and strategic companies are now looking beyond these reward programs to delight, create and retain loyal customers. They are looking to solve customers’ problems and soothe pain points.”

You can get to understand customer behaviour through conducting user interviews, focus groups, competitive research and third-party integration research. Your web analytics and sales metrics will give you more information on conversions. Look at past data to find out what worked and what did not. You want to make sure the program is a win-win situation for both your customers and your business.

If you build a mobile app on top of existing systems, you can manage sales entirely on the app (For example, purchasing food on the app, scheduling service appointments etc.), while using your existing back-end systems (For example, printing a ticket in the kitchen to managing operations).“Mobile will ultimately be the way you provision most of your services. The way I like to put it is, the answer should always be mobile first. You should always put your best team on your mobile app,” says Eric Schmidt, Executive Chairman for Alphabet, Inc.

Best mobile loyalty programs

Best Buy, Walgreens and Sephora are examples of brands that use mobile loyalty programs as the centrepiece of their mobile strategies. Marketers from every sector have worked hard in building loyalty, from using social media to educate consumers about mobile payments. They are using mobile apps not only during the holiday season but also in building long-term relationships with old and new consumers.Here are examples of well-executed mobile loyalty campaigns:

  • Best Buy’s omnichannel approach to mobile loyalty programs

Best Buy redesigned its reward program with a more comprehensive omnichannel mobile loyalty offering, as a way to increase footfalls to their showrooms. The big box retailer’s My Best Buy loyalty program replaces the previous Reward Zone and works well with the company’s iPhone and Android applications. Consumers that use the app within a certain area around a store receive points that are credited to their member accounts. In exchange for downloading and using the app, members are offered exclusive deals. Best Buy’s customers are increasingly turning to mobiles to differentiate loyalty programs with an in-store incentive.

  • Cosi’s social-focused mobile loyalty program

In order to increase loyalty and drive foot traffic, the fast-casual chain Cosi ran a campaign that emphasized the use of mobiles and social media, as a part of a huge multichannel program. As a part of this program, Cosi ran social and mobile display ads to attract consumers and offer them the chance to win prizes and unlock offers. The chain created a desktop as well as a mobile web experience for the campaign with the latter being geared towards social-focused such as posting pictures on Instagram. It is quite common these days to offer rewards for purchases on mobiles, but what is unique about Cosi’s program is that the brand is encouraging social actions, which is predominately taking place via mobile devices.

  • Cumberland Farms’ payment integrated mobile loyalty program

In the last couple of years, convenience store chain Cumberland Farms has moved into mobile territory in a big way to smoothen out its payment process. The brand expanded its program with an app that opens up a checking account, in order to trigger payments. In addition to cutting down on the amount of time that consumers spend on getting gas, the mobile program also saves consumers 10 cents for each gallon bought, thereby encouraging repeat refuelling and driving the adoption of mobile payments. Cumberland Farms has also added mobile coupons to its mobile app as a way to integrate rewards into its mobile payment offering, thus encouraging their customers to go the digital way.

Vishakha Sen
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