Why Mobile Loyalty Programs are Imperative for Small Businesses

mobile-loyalty-program

Mobile Loyalty programs are a time-tested and effective means to help a company increase brand growth and its reputation. It attracts new and old customers alike, and it stimulates them to return again and again.

In the past, a small or resource-limited business could hardly compete with the large rewards programs of big box stores and large companies. Many of us resorted to the archaic punch card/stamp system, where each time a customer visited (and remembered to bring their rewards card), they received a punch or stamp, until they filled the card and received some predetermined reward.

This system, while having all the components of a reward system, lacks convenience and pales in comparison to the reward system of most large companies. Luckily, however, the playing field of loyalty programs is becoming a lot more even.

Thanks to the boom of the mobile age, an increasing number of mobile-reliant consumers are passing on the stamp cards and the bigger rewards programs of large stores and businesses.

In the place of these traditional loyalty programs are mobile-centric offerings that are right at the customer’s fingertips at all times, which means they never have to remember to bring their sandwich club card again. This is helping those small businesses compete in the loyalty program department because these reward systems are easily integrated into a company’s existing mobile app.

Thus, as mobile apps become increasingly more affordable and available, even to small businesses, so are premier loyalty programs.

As our world becomes more and more mobile-driven, there is an increasing number of reasons why building relationships with customers through our mobile apps is imperative to be successful in this realm. Integrating your existing (or in development) app with a loyalty program is a great way to create these relationships, while simultaneously fostering superior brand loyalty and offering customers relevant and valuable rewards on the channel they use the most.

Here is why you need to start thinking about giving up on or combining your traditional, offline loyalty program with a new, mobile-driven one.

  1. Only Mobile Loyalty Programs Offer a Seamless Customer Journey.loyalty-mobileWe have already touched on one of the big reasons that these mobile-driven programs are better than traditional ones— you never have to worry about forgetting your rewards card because it is your mobile phone. Let’s face it, none of us are without our smartphones, ever. But, a lot of stores have had this solved this for some time, by being able to look up a rewards member using a phone number or email address. This certainly enhances the loyalty program’s convenience, but it is not perfect.

    When we talk about a seamless customer journey, the notion of stopping a transaction to give a phone number or e-mail address out doesn’t typically make the conversation.

    Mobile loyalty programs eliminate this cumbersome step; many are sophisticated enough to detect when a purchase has been made and update the customer’s rewards points or automatically apply discounts (whatever the system may be). At a time when customer experience reigns supreme, an end-to-end flawless journey is crucial.

  2. Loyalty Programs are a Time-Tested, Proven Effective Marketing Strategy

    customer-loyalty-programsEach loyalty program is a little bit different than the next, whether that means how the program is structured, the way customers earn rewards or what those incentives are. What remains the same, however, is their positive impact on successfully growing a company.

    Why are loyalty programs so good at boosting growth? The easiest answer is to simply look at the numbers. The following statistics are part of the Bond 2016 Loyalty Report, which tracks trends in loyalty memberships and member satisfaction.

    • The average consumer belongs to 13.4 loyalty programs and actively participates in 6.7
    • 66% of loyalty program members modify their spending to maximize reward points
    • 81% of consumers claim that loyalty programs are responsible for their continued business with brands and 75% believe that these programs are part of their relationship with those brands
    • 73% of consumers feel they are more likely to promote and recommend a brand with good loyalty programs

    When we are talking about improving growth, these are the kind of consumer behaviors we drool over. Spending more, promoting more and staying loyal are all key factors to improving growth and they happen to all be highly affected by a loyalty program.

  3. Growth Overshadows Costs of Starting a Loyalty Program

    costs-loyalty-programWhen you consider all of the impressive stats from reason #2 above, it starts to seem very silly that some organizations shy away from offering a loyalty program. They see it as sinkhole for their possibly limited resources, which could be used on other marketing strategies.

    This, however, is partially flawed logic that undermines the value of loyalty programs. Consider that it is approximately 7 times more expensive to produce a new customer than it is to keep an old one. Thus, what you spend in resources on your loyalty program(s) won’t be a large expensive, considering the returns of a brand loyal customer who is more likely to recommend you to others (let them acquire your new customers for you!).

    It is also important to consider that the cost of a maintaining a mobile loyalty program is small. Once you get the initial work of setting up the program out of the way, the only real continuing expenses you will have is the costs of the rewards you offer. Yet, these costs are often much less than the increased revenue generated by loyal consumers continuing to make purchases in order to reach those rewards.

    There is also some level of app and program maintenance involved (updates to the app and engaging users with new, fresh rewards), but they are also minimal. If your mobile loyalty program is integrated into your company’s broader mobile app, then the cost of maintaining it are going to be absorbed by your mobile development expenses anyways.

  4. Mobile Loyalty Programs Produce Volumes of Consumer Data

    data-driven-loyaltyWith most companies adopting some form of Big Data analytics solution to handle their coffers of data, we can begin to develop some very accurate and insightful discoveries about our customers and their spending habits.

    A mobile loyalty program is a great source of this valuable data and allows us to research the purchasing behaviors of each target demographic. This information is vital towards improving future marketing efforts and understanding the ever-changing wants, needs and desires of our customers. Ultimately, these insights can be leveraged to create the optimal experience for customers and invoke a desired action from them, such as purchasing more.

    From the standpoint of your loyalty program, this type of data can also be looked at to improve your rewards offerings. You can look at the data to determine which incentives are most popular or not and by which audience segment. One incentive may not resonate with millennials, but may be popular amongst older members. You can strategically leverage this information by associating high-value rewards to products that you want to move quickly or to certain days/times when sales are low and need a boost.

  5. Loyalty Programs Enhance Brand Reputation and the Customer Experience

    brand-buildingIn an age where the customer experience is the biggest competitive differentiator, improving that experience, especially in a mobile environment, by offering a loyalty program, is a huge step in the right direction. At the very least, it sets your business apart from those that aren’t willing to adopt a mobile reward program. No one has ever had taken issue with being rewarded for their loyalty. In fact, a lot of consumers today expect it.

    When you offer a loyalty rewards program, consumers see it as a mutually beneficial relationship that recognizes the value of a single person. In other words, it allows the customer to think, “Yes, you are making money off of my business, but you are also going above the typical buyer-seller relationship by providing me with this act of goodwill, in the form of rewards, for my continued loyalty.”

  6. Word-of-Mouth Boosts Customer Base and Brand Reputation

    customer-word-of-mouthWe have discussed the ability of loyalty apps to increase customer growth. Specifically, they are hugely impactful at improving your customer base. These reward programs are not only great at encouraging new and existing customers from continuously shopping with a particular business, but they also can help incentivize those customers to spread the word about your brand.

    Mobile loyalty programs have a strong word-of-mouth nature to them because people like to be on the cutting edge and in the know. Consequently, 73% of the people 18-34 feel that it’s important to hear what others have to say about technology.  If you have an extremely effective and superb program, the group of consumers most likely to use your app and benefit from your rewards is going to tell their friends about your app and its rewards system.

    In the end, you will be attracting customers at a much higher rate, while simultaneously building your brand reputation as a company that places the customer in high regards and rewards their loyalty appropriately. This can encourage more downloads on the app store, higher loyalty memberships and bolster the overall success of your loyalty program.

    keep-customer-retentionThis may go without saying, but the more loyal consumers are to your brand, the less business they will be giving to competitors and the less likely they are to suddenly switch their loyalties. As much as loyalty programs help to encourage continuous shopping, they also greatly reduce the chance of consumers staying loyal.

    Once a member has accrued a lot of reward points, chances are they aren’t going to abandon them. From a customer point of view, those points represent an investment of their time, money and loyalty (yes, loyalty can be a commodity!).

    The only time when customers that engage with a company’s loyalty program are at a high risk of defecting is after they have dumped most or all of their reward points. Thus, capitalizing on the most of their investment. To counteract this potential risk, some marketers have found that offering a member increased reward point gains after a big purchase can help encourage them to re-invest in the loyalty program (example: ‘get more rewards with triple points on your next five purchases). Also, updating your rewards section with fresh selections can also help maintain high loyalty, even after a big point dump.

    Begin Creating A Mobile Loyalty Program

    It’s time to begin weaving your existing, offline loyalty program into your mobile app platform. Your business will grow from engaging in a proven and mutually beneficial relationship with your customers.  A loyalty program will help improve your company growth, boost your brand reputation and customer experience, while acquiring valuable data about your customer’s spending habits and behaviors.

    With 57% of consumers reporting that they would like to engage with their favorite brand’s loyalty programs on their mobile phones, now, more than ever, it is imperative that marketers look at adopting a mobile loyalty program.

Author: bbaker

Brett Baker has over 20 years experience in film, television and video game production. His television work includes special effects animation for " VanPires" (1997) animated series and post production for "Teletubbies" (2001). His video game work includes titles such as William Shatner's "Tekwar" and" ChronoMaster" featuring the voices of Ron Perlman and Lolita Davidovich. His animation studio Exodus Entertainment, was responsible for the animation that resulted in Mattel® being award the master toy license for the Harry Potter® franchise in 2002. He received his M.F.A. in filmmaking in 2004 before going on to work on feature film projects such as "Gringo Wedding" in 2006 and "Get Smart" in 2008. He currently owns and is an animator and designer with his own agency, Axxis 3.