How to Build a Loyalty app for Small Business?
Content:
  • 1. 🤩 Top 6 Reasons to Build a Loyalty app For Small Business
  • 2. 📱 Loyalty App Development: 6 Key Features to Consider
  • 3. 💵 The Cost of Building a Loyalty App
  • 4. ⚙️ Tech Stack for Loyalty App Development
  • 5. 💡 Conclusion
  • Hey there 👋

    Are you an owner of a Small Business without a mobile app? Well, then you’re losing your revenue every single day. Moreover, you literally hand over your potential customers to competitors who have already developed a mobile solution for their business.

    However, Loyalty App development is a good step to get your favored position back. Before we learn what it takes to deliver a mobile solution for your Small Business, let’s take a closer look at all the benefits of having such an application.

    loyalty_points
    Loyalty apps mean a lot to your customers (image by Rajesh)

    P. S. If you already know how it can skyrocket your KPIs, you can jump straight to the “how-to” part.



    🤩 Top 6 Reasons to Build a Loyalty app For Small Business

    In 2018, having a mobile Loyalty Solution for Small Business is a necessity. Many brands have already established their mobile presence and got tremendous benefits. We’ll review their experience as well!



    # 1: Increase Brand Loyalty (if talking in terms of metrics — your retention rate)

    The concept of Brand Loyalty reflects the readiness of the customer to purchase your goods or services repeatedly and regardless of competitors’ actions.

    In other words, Brand Loyalty is a strongly positive feeling towards your brand that turns your one-time customers into long-time ones. And, therefore, increases their LTV (lifetime value).

    starbucks
    Starbucks app is one of the most succesfull cases in the industry (image by Konstantin Zhuck)

    As Kristy Campbell and Jed Williams put it:

    • About 60% of Small Business Owners generate more than 51% of the revenue from long-time customers.
    • It can be 10 times cheaper to retain an existing customer rather than acquire a new one.
    • A small increase in retention of 5% can lead to a 25-100% increase in revenue.

    Let’s see how much money Starbucks makes on Brand Loyalty:

    ☕ Starbucks Case Study ☕
    Facts 📃 Benefits 💰
    Starbucks launched its app back in 2009. Today it is considered one of the most successful cases in the industry.

    This is a Loyalty Reward App with the possibility to make in-app orders.

    Number of Loyalty program members is about 15 million and it grows by 15-20% per year.

    These members represent about 39% of U.S. company-operated sales.
    Despite Starbucks doesn’t provide info on their average ticket, it’s been calculated that on average consumers spend $4 during a visit.

    Given the facts, we can calculate that the loyal Starbucks consumer with the average check generates about $64 (16 x 4) a month. Which is 266% higher than a non-loyal customer who visits Starbucks 6 times a month and generates only $24.

    Loyalty App Development will help you achieve similar results. Pretty inspiring, right?



    # 2: Your audience goes mobile — so should you

    One of the essential marketing rules states this:

    You should be where your audience is.

    Despite there are still some people out there who read newspapers, watch TV and listen to a radio, most of them are moving to the digital space. Google confirms it by saying that today people have 2 times more interactions with brands on mobile than anywhere else. It makes Loyalty App development quite reasonable.

    Moreover, you’re likely to be seen due to the fact that people use mobile apps several times through a day. Actually, according to Statista, about 54% of users behave this way:

    app-uses-per-day

    There’s also a myth that it’s rational to develop a Loyalty App only if your brand is aimed at the younger audience. Yet, if you open any recent researches (for example, this one by Pew Research Center) you’ll find the following stats:

    🗽 U.S. adults who own smartphones
    👦 Ages 18-29 94%
    👩 30-49 89%
    👨 50-64 73%
    👵 65+ 46%

    As you can see, smartphones are widespread in all age groups, so you can easily target your audience regardless of its age.



    # 3: Gather all your content in one place

    Like with any of your products, you develop a Loyalty App to provide some value to your customers. What can it be? Obviously, this is information.

    A mobile application provides you with the possibility to bring together all your content: photos, videos, news, goods & services (for example, a menu), events, hot offers, coupons & discounts etc.

    👗 KappAhl Case Study 👗
    Facts 📃 Benefits 💰
    KappAhl is a Swedish clothes brand that developed a Loyalty App.

    The app was aimed at providing fashion-focused and inspirational content and good bargains.

    The app increased the brand awareness and the revenue of the company. Offers from the app’s inspiration section converted to sales 41% better than emails.

    As you see, keeping useful content around for your customers pushes them to more frequent interactions with your brand and, therefore, makes them fall in love with your business and increases their loyalty.



    # 4: Analyze your audience

    Finally, you can create your own Loyalty App not only to improve the customer experience but also to turn it into a powerful analytical tool. What benefits can you get from this?

    reports
    Analytics can be used to improve your offline metrics as well (image by Ela Kumela)

    Well, you’ll be able to get practically confirmed data about the most popular products & services as well as typical behavioral patterns. It will help you to adjust your business strategy to the needs of your audience and build an even stronger relationship with them.



    # 5: Personalization & Targeting

    You know this better than me: your customers like to feel special. Actually, numerous recent researches are in favor of this idea:

    • 4 of 5 customers (80%) are more likely to do business with a company that provides personalized experiences. (Source: Epsilon)
    • 3 of 4 consumers (76%) say that it’s important to receive personalized offers based on their purchase history. (Source: LoyaltyOne)
    • 2 of 3 Generation X and Savvy Millennial shoppers (67%) would provide retailers with personal information to gain access to a more personalized shopping experience. (Source: RetailMeNot).

    By generating a user-specific experience you’re more likely to offer your customers products & services in the right time and place.

    It also provides new possibilities for targeting — you can send different specific offers to different audiences. For example, if a user often orders pizza, he will be more happy to get special offers regarding this dish, whereas sushi lovers will prefer to get sushi-related notifications.

    🏒 NHL Case Study 🏒
    Facts 📃 Benefits 💰
    The app provides hockey fans with the possibility to watch live streams, content from favorite teams for free or for a paid subscription.

    NHL promotes subscription offers by sending tailored & targeted in-app messaging campaigns based on the personal data of users: their favorite team, current subscription status and country.

    Target messaging campaigns increased sales within specific audience groups. As a result, the targeted approach influenced about 20% of in-app subscriptions.

    Personalization & targeting will help you to build a strong connection with your consumers that will bring you profit in the future.



    # 6: Push notifications and iBeacon

    Push notifications and iBeacon (used to send geo-based push notifications when customers pass by your store) remind users about you and encourage them to be more active consumers. They let you reach customers at any time and place even if they don’t interact with your brand right now.

    push
    Push notifications are a powerful tool to keep your users engaged (image by sarafrbrito)

    Let’s learn how push notifications helped Jumia.

    👕 Jumia Case Study 👕
    Facts 📃 Benefits 💰
    Jumia is a popular African online store with a mostly mobile audience (65%).

    About 25% of all shopping carts (or each 4th) were abandoned daily.

    Jumia replaced poorly performing email-reminders with push notifications that encouraged users to finish the purchase. This solution increased CTR (click-through rate) to 38% and drove 9 times more recovers of abandoned carts.

    So, these were 6 convincing reasons to build a Loyalty App for Small Business. But what are the components of such an application that will allow you achieving brilliant results like in the stats above? That’s what we’re about to find out!

    Read Also Why Create a Mobile App for Your Small Business?



    📱 Loyalty App Development: 6 Key Features to Consider

    A well-built application multiplied by a thought through marketing strategy means incredible ROI in the shortest time. However, what elements does this “well-built app” include?

    We at Stormotion offer the following list:

    1. User Profiles.
    2. Loyalty Block/Reward Opportunities:
      1. Coupons.
      2. Digital Stamps.
      3. Points.
      4. Tiers.
    3. Push Notifications.
    4. News.
    5. In-app Map.
    6. Analytical Tools.

    Let’s review them!



    # 1: User Profiles 👤

    We’ve already figured out that personalization and targeting mean a lot to your mobile Loyalty Solution for Small Business.

    user-profile
    Profiles link users to your brand (image by Qian Yu)

    Since rewards, discounts and other benefits are linked to your customers’ personal activity and interactions with your brand (for example, how often they purchase your services & goods or how much money they spend a month) it’s important to:

    • Link these benefits to a specific person.
    • Don’t lose them somewhere during the user’s journey.

    How will it impact your business?

    User Profiles help to keep this kind of data safe and stored even if the app was deleted for some time or it’s used on several devices. It means that users are more likely to become your repeated customers and increase your sales (remember Starbucks Case Study).

    Moreover, Profiles can be used to analyze the behavior of every specific user and provide him with tailored experience according to his preferences. Thus, your offers have higher chances to reach people who are really interested in them.

    Important tip: consider the recent GDPR. We recommend you store personal data of your users in such a way that you can use it for analytics but keep it anonymous (without linking to specific people). Thus, you’ll be able to send targeted alerts and don’t violate users’ privacy.



    # 2: Loyalty Block 🏆

    This is the heart of your app which brings together all the opportunities, offers and rewards available to your customers. What can they be?

    Coupons

    For your brand’s mobile app, we at Stormotion recommend you to create a separate coupon screen where users will be able to manage this kind of Loyalty Campaigns:

    • See the list of available coupons.
    • See additional info about the offer (if needed) and its expiration date.
    • Coupons are confirmed as used when the shop assistant or cashier scans a QR-code.
    • Used coupons should be clearly marked (for example, recolored in gray) or just disappear.

    After you develop a Loyalty App it will be easy to send new available coupons and keep all the users interested in buying your goods or services.

    coupons
    Coupons are one of the most popular technologies to build brand loyalty (image by hellohello)

    Moreover, you can even save your funds! For example, you won’t need to spend money on printing coupons and distributing them offline somewhere in the city.



    Digital Stamps

    This tool is especially powerful when you want to turn your ordinary customers into repeated ones. Digital Stamps are kind of point system — for specific actions users get “stamps” which are later can be exchanged for rewards and benefits.

    Possible Actions 👈 Possible Rewards 🎁
    Get a Stamp for: Collect X Stamps to:
    ✅ Buying a specific Product or Service. ➡️ Get a free Product or Service.
    ✅ Making any purchase. ➡️ Get an N% discount on your next order.
    ✅ Every $X spent. ➡️ Get a special branded merchandise.

    Stamps encourage your consumers to interact more actively with your brand so as to collect them and get a reward. Moreover, after you create a Loyalty Reward App you can use Digital Stamps to tailor customers’ behavioral patterns.

    For example, let’s imagine that you have a small coffee shop with an average check of $7-8. However, if you will give a Stamp for every $10 dollar spent per order, many people will prefer to spend $2 more so as to get a nice reward after all. At the end of the day you’re likely to notice that the average check is going to increase, too.



    Points

    This Loyalty Reward system is one of the most popular ones. For instance, it’s widely used in the Starbucks app which is known as one of the best cases in the industry. So you’re likely to include it too as you build a Loyalty App for Small Business.

    Moreover, it’s very flexible and can be used not only to establish brand loyalty but also to increase your KPIs.

    points
    Points system is widely used by many popular loyalty apps (image by Guga Bigvava)

    Just like Stamps, points can be assigned for different kinds of activities. In addition to purchases and spending specific amounts of money, you can foster people to share brand-related content on social media or invite their friends to download your app.

    Using this word-of-mouth strategy you can attract even more customers for free!

    Points can also be used as your in-app currency. When users collect enough of them, they can exchange points for discounts, goods, services or merch.



    Tiers

    Finally, you can create a Loyalty Reward App with a tier system. As users collect points, they “level up” and get permanent benefits that become better with every next level.

    For example, you can gradually guide your most dedicated and loyal consumers from a 3% to 10% discount with milestones at 5% and 7%. This is a win-win situation.

    tiers
    Tiers are another strategy that you can use to build brand loyalty (image by Nishta Daya)

    Moreover, it’s a strong gamification tool. People like collecting points and reaching new levels — it makes them as excited as kids, believe our experience.

    Tiers are also great when it comes to retaining already loyal users that are ready to spend more and eventually get even better benefits.



    # 3: Push Notifications & iBeacons 🔔

    If you’re building a loyal audience you need to keep them constantly interested in your brand and product. Push notifications help your company stay in sight with regular alerts that encourage users’ activity.

    push-notifications
    Don't forget about the power of push notifications (image by sarafrbrito)

    Moreover, this feature comes in handy not only when you need to retain the loyalty but also when you’re just building one. How it can work in your Mobile Loyalty Solution for Small Business:

    • You can inform your users about new loyalty campaigns you run — for example, tell them when a new coupon or a hot offer is available.
    • To encourage purchases, you can remind users “to get just X more stamps/points” and collect a reward then.
    • You can link push notifications to the location of your business, so when a customer passes by he will receive an invitation with a special offer.
    • If a user hasn’t interacted with your brand for a while, a nice message to remind him about you can work out.

    Also, pay special attention to targeted messages like in the NHL app case study above. Researches state that users who accept push notifications are 3 times more actively interacting with the brand. So don’t underestimate its power!

    How will it impact your business?

    1. Users will interact with your brand more frequently.
    2. You’re likely to notice an increase in conversions shortly after implementation.
    3. Push notifications usually perform better than other retargeting tools (for example, emails — remember Jumia Case Study). Targeted notifications show even greater results!
    4. iBeacon is a good tool to increase the foot traffic by reaching out to people who just pass by.



    # 4: News 📰

    Content sharing activity should be done on a separate screen — the News screen.

    news
    Feel free to share new offers and valuable content with your users! (image by Abhinav Yadav)

    It’s up to you to decide what kind of content you’re going to share — some valuable industry insights (like in the KappAhl Case Study), your brand announcements (of new stores, services & products) or promote special offers (like seasonal/holiday sales).

    How will it impact your business?

    1. Regular news about adopted innovations and changes in your company build stronger brand engagement.
    2. By informing users about ongoing events and offers you increase the chances that people will take part in your campaigns and actually buy something.
    3. Valuable and interesting content has high chances to be shared on social media and expand your market reach.



    # 5: In-app map 🗺️

    Also, you can include a built-in map that will show the location of your stores and their work hours.

    For an advanced experience that goes beyond an MVP, you can develop in-app navigation that will lead people directly to the door of your store.

    map
    Image by Kuldeep Sharma

    How will it impact your business?

    Integrated into your application map is likely to increase the foot traffic in your stores. It’s a great solution for loyal customers who actively move around the city and want to be sure that they can reach your store from anywhere.



    # 6: Analytical tools 🔬

    Finally, you can create your own Loyalty App and integrate analytical tools that will turn your user stats into valuable data. It, actually, can be anything:

    • Demographics of your audience — their sex, age, family status etc.
    • The most and the least popular products. The most bought products on each day or time of the day (e.g. morning, evening).
    • Typical behavioral patterns. What products are better sold on holidays and weekends, which goods are usually bought together with the product X and so on.

    How will it impact your business?

    1. Analytical tools will let you make data-driven decisions: what products should be improved, what marketing campaigns have higher success than others etc.
    2. You can learn your customers even better to adjust your products & services to their expectations and get higher revenues.
    Read Also [How and Why] Outsource Your Mobile App Development?



    💵 The Cost of Building a Loyalty App

    One of the essential questions that we still haven't raised is the cost of building a loyalty app. As always, our development squad prepared a rough estimate for you that will let you get an idea of how much resources you should have to create a mobile application like this.

    As you can see, it development costs start from $19,600. However, your final expenses can be below or above this figure - so if you want to get an accurate estimate for your project, please, contact us.

    Read Also How to Estimate Software Development Time Accurately?



    ⚙️ Tech Stack for Loyalty App Development

    Finally, there are some tools that can make the development faster & easier. They’re needed to integrate specific features or solve particular issues.

    So, here are a few technologies that your remote team can use to deliver a good mobile product:

    • Facebook Mobile SDKs can be used to establish a fast login process and get access to analytical tools.
    • Firebase SDK is the favorite tool of the Stormotion Squad when it comes to the push notifications development.
    • Voucherify API is a massive tool with big possibilities for Loyalty App development. With its help, you can manage your coupons and campaigns, track custom events etc.
    • MasterCard Personalized Offers API lets you create customized offers and loyalty campaigns for the cardholders.
    • Smile API allows developing customized reward programs.
    Read Also Android vs iOS Development: Which Platform is Better?



    💡 Conclusion

    Loyalty App development is a great solution for your Small Business. It will help you to turn your first-time customers into repeated ones and, eventually, generate a higher revenue.

    Also, here are a few friendly recommendations from Stormotion developers:

    • Be a UI dandy. Check fresh design trends to find out what’s popular now among users.
    • Be consistent. Make sure that the app corresponds to the general mood and style of your brand.
    • Be flexible. Try different kinds of loyalty programs, combine them and think outside the box to get the best outcome.

    Looking for a product team to create your own Loyalty App? We’d be happy to develop an App for your Business and increase Brand Loyalty of your Clients. Just hit the button below!

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