From coupons to frequent flyer programs to VIP cards, loyalty and basically rewarding customers has been around for a long time. It is said that the first form of a loyalty program started in the U.S with a company giving out copper tokens that customers could exchange for merchandise in the store.
Although we have come a long way from copper tokens, loyalty programs have and continue to reward customers for repeat purchases, behavior, feedback and now with digital even certain actions on mobile or web.
These programs should be designed to motivate customers to continue supporting your brand and to help decrease your acquisition costs, since it is know that acquiring new customers is much more expensive than retaining current ones.
You should of course be using the data from your loyalty program to make sure you know how to reward each customer segment.
I would like to also mention that there are some programs that are not so great and do not succeed, but that is more based on the design and strategy of the program and not on Loyalty Programs themselves.
Did someone say Mobile?
To me what is really making today’s loyalty programs more exciting, and potentially much more effective, is not only the amount of data that we are getting ( though you need to be able to act on the data) but, that they can now be delivered via mobile.
We have seen this from apps like Loyalzoo or the Starbucks Rewards app, and also airlines, hotels and retailers are having a go at it. When I helped build our rewards app Twoforone Go, I hired Golden Gekko, a mobile app company that had already built the O2 Priority Moments app, so the process would be smooth, and I would recommend anyone building a robust app to find a good development and strategy partner if they are doing it for the first time.
Now the success of your mobile loyalty program will depend on your approach, so make sure that you have well defined goals, that you have researched and can justify why mobile loyalty would make sense, that your users are actually on mobile and finally that you have a good strategy and are able to execute on that strategy.
If you are able to deliver on this and get your mobile loyalty program right, you can use it as an effective tool to increase revenue and build meaningful customer relationships.
Here are 5 tips worth noting when developing and implementing your mobile loyalty program or when building a loyalty app:
The customer has to come first: Don’t make the mistake of thinking that you know what is best for your customer. There is absolutely no excuse why you would not talk to your customers and get their feedback before you build or design your mobile loyalty app or program. Survey them, interview them, get the UX team involved, look at your database at your analytics and make sure you don’t cut any corners in this step, or you are going to end up asking yourself why your app is not used as you intended it to be used and why you are not reaching your objectives.
Provide Real Value: When you are designing your program remember that It’s not just about giving freebies or giving stuff that your customers don’t want, but more about offering real value and making the reward truly meaningful. By making the points or rewards, as well as the system for getting them, very clear, you will encourage more people to join and stay on, because they will be able to understand the benefits they can aspire to get.
Right Device – Right Market: I had a rough start when I began to work on the first version of our app. It was around 2011 and the market was just not there in terms of adoption and use. And don’t be sold on mobile just because you read a report that says that “X” country has a very high mobile penetration rate. You have to go deeper and see if what you are building is going to get used and how people in those markets actually use their phones. Chatting on a phone is not the same as using and redeeming rewards on an app. Also think about what device is used in your market because mobile is not cheap to build (at least not a good app), so if in your market an OS has 5% penetration it is probably best to not build for it just yet – think ROI!
Engage the Right Way: When we thought about our comms strategy we used actions taken in the app and designed many message sequences, from email to sms to in app messages. We must of had at least a few hundred of these done, since so many different scenarios could occur. I recently went to a presentation here in Singapore where Linkedin shared that they also had hundreds if not maybe thousands of email variations set up with a marketing automation tool, just to make sure they were engaging their customers with the right message at the right time.
Get Feedback: No matter how successful or exiting your program may be, don’t forget that digital and mobile are changing at very fast pace. In addition your customers are getting more and more savvy. Make sure you keep an eye out for trends and for what is happening in mobile. If you listen carefully to both your customers and to the market then you will be able to be proactive in what you do and make the necessary adjustments. Your program cannot be static and if you don’t have the right information then you are going to be left behind and your investment will be lost – just like your loyal customers.
Mobile loyalty programs and apps can be complicated and challenging to design, to launch, to operate and to maintain, because they need to be up-to-date if you want them to deliver measurable results and ROI, but if done right they will delight your customers and drive revenue to your business.