Thinking Of A Loyalty Scheme? Try Investing In Your Mobile App Instead

Posted by Hugh Reynolds on January 29th, 2014 at 11:00 am

Everyone wants loyal customers. And businesses of all shapes and sizes are willing to spend a lot of money to get them - or perhaps more accurately ‘create’ them. From the humble coffee shop offering your tenth cup on the house, to the large scale retail chains offering rebates on every purchase, it’s a multi-billion dollar industry,

But there’s more to loyalty than schemes. Ultimately, the more transparent loyalty schemes are little more than a complex way to earn a discount. And whilst financial benefit can certainly drive business (whole companies have been built on that model after all), it isn’t really what we mean when we speak of loyalty.

Here’s the real truth: the single most effective way to generate loyalty is through quality of service. That incorporates many things, but certainly right up there is the feeling that the company concerned treats their customers as individuals, listens to them, and delivers them an experience to match. Another factor is sheer convenience. I might not love Amazon, but their 1 click ordering system (particularly on mobile) means they are likely to enjoy my repeat business for some time to come.

Why The Mobile App Matters

That mention of Amazon brings me to my main point - the transformative effect of the mobile app on the loyalty universe. Here’s the facts: the average smartphone owner (and that’s pretty much all of us these days) checks their phone about 150 times a day and never has it out of arms reach - even when asleep. So ask yourself the question: “as a brand, do I want to be on that screen or not?”

The benefits should be obvious. Whereas the internet enabled an almost frictionless environment in which, as the phrase goes, ‘the competition is a click away’, the mobile app is a very different environment. If a user becomes locked into using a specific app for hailing a taxi, for example, they are unlikely to look elsewhere if the solution to that particular problem stares them in the face every time they look at their phone. That’s why mobile apps are the single defining factor in customer loyalty. If you’re on the phone, success. If you’re not, you’re nowhere.

But even beyond the purely digital business the mobile app can deliver great loyalty benefits. Starbucks is a great example of a bricks and mortar business that has used the mobile app to drive loyalty. Partly that’s by embedding a conventional loyalty scheme in the app itself. But perhaps more importantly it’s through the ability to pay with the phone and essentially keep an account in your pocket. If that app is on your phone - where are you likely to pick up your next double macchiato?

That’s how powerful the app can be when it comes to loyalty. So what is the cost? What does it take to get yourself into this position? Not a huge amount. Lesson one: remember that simply delivering installs isn’t enough. Too many apps are never used. If you want to hold down that position on the smartphone, you need a user experience second to none and to deliver every convenience possible within the app. That means a real focus on retention and maximizing engagement from your app users.
Further, try to treat your app users as individuals. If you are providing content and services uniquely tailored to their needs, you’ll find they’ll keep using your app. Learn from user behaviors, and put in place systems that deliver the experiences and offers that will be relevant to them. Consumers are less likely to turn their back on organizations that demonstrate they understand them. And that means apps that keep getting used - and more business success as a result.

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