How app Customer Loyalty Programs Increase Customer Retention and Drive Revenue (with Examples)
It’s common knowledge in the retail world that mobile customer loyalty and reward programs work wonders to keep customers coming back time and time again. If you look at almost any major retailer, you’ll find a reward or loyalty program tied to their growth strategy. In this post, we go over why these programs are successful along with examples of some of the best mobile customer loyalty apps on the market such as Starbucks and NikePlus.
Quick mobile loyalty stats:
- 90% of companies have some type of customer loyalty program
- 84% of consumers say they’re more likely to stick with a brand that has a loyalty program
- 79% of consumers say being able to unlock exclusive benefits makes them loyal.
- 66% of consumers say the ability to earn rewards changes their spending behavior
- 49% of consumers say they’ve spent more after joining a loyalty program
- 47% of consumers said they are motivated to be loyal by becoming part of a like-minded community
Benefits of mobile customer loyalty programs
- Retain and engage customers better: Gamification through points and achievements keeps people coming back to the app time and time again. Ultimately, when people are more engaged beyond the point of purchase, they’re more likely to stick around.
- Save money and resources: It costs far more for companies to acquire new customers than it does to sell to an existing one. Brands save money by increasing retention and activating their current customers for repeat purchases.
- Increase the number of referrals: Killing two birds with one stone, companies can reward customers for referring friends. This keeps the current customer happy and engaged while the brands gain a new customer at a much lower cost.
- Higher spending: Mobile customers are consistently the highest-spending customers. By fostering loyalty with this audience, you further increase spending among them.
Mobile loyalty experiences are more successful
Since reward members tend to spend more, it’s critical to foster relationships with this select group of customers. Here’s why those customers like the mobile app loyalty experience.
- Convenient and accessible: Brands are just a tap away at all times. Customers can also instantly see their loyalty status or points at any time with mobile reward programs. They can watch these metrics change in real-time, providing instant gratification with each purchase.
- Fun: The gamification of earning points and achieving milestones gets customers to come back to check their status again and again. Adding a bit of competition to your mobile experience will engage customers and drive retention.
- Rewarding: Brands can offer personalized deals, treats on birthdays, and recognition for anniversaries.
Examples of world-class mobile customer loyalty programs
In summary, the Nike+ app offers the following in their loyalty program: exclusivity, community, personalization, and a seamlessly connected multi-channel experience.
Some of the perks include:
- Browse and shop
- Exclusive shopping access
- Free shipping
- Early access to sales
- Personalization services (such as custom-designed shoes)
- Product testing
- Exclusive offers with partners (such as Apple Music, ClassPass, and Mindspace)
- Barcode scanning
“NikePlus members who shop via our mobile apps spend 3x the amount that guests spend on Nike.com,” Adam Sussman, CDO Nike (Source).
We can’t talk about rewards programs if we didn’t mention Starbucks. Forever the leader in this space, Starbucks is the ultimate example of a successful mobile rewards program. From their calling all reward program customers “members” to providing points for every dollar spent, Starbucks accumulates thousands of loyal, active, and satisfied app customers. So much so that Starbucks attributed 40 percent of its overall sales to the Starbucks Rewards program. In addition, app users are 5.6 times more likely to visit a physical Starbucks store every day.
One of the biggest draws of the Starbucks app is the ability to order ahead and skip the line. This ties into one of the reasons why reward programs are so compelling. When people feel like they’re part of the “in crowd” or have some sense of exclusivity, superiority, etc. they become hooked.
- Mobile order and pay functionality
- Tiered rewards system through collecting points
- Free products with accumulated points
- Currency neutral
- Games with rewards
Honorable mention mobile customer loyalty programs
- Free shipping
- 5% back in rewards on every purchase
- Points for donating
- Birthday gift
- Cash for points
- Barnes & Noble
- Store location finder
- Browse and shop
- VIP Program
- Store pickup
- Traditional point system
- Integrates with the website and stores (including retail stores within larger department stores)
- Great user interface
In conclusion, it’s evident that loyalty programs in mobile apps play a crucial role in enhancing customer retention and, consequently, boosting revenue.
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